Siemen's CEO Loesher replaced by CFO Joe Kaeser

After letting go of Peter Loescher as CEO of German engineering giant Siemens, the company has decided to name its current CFO Joe Kaeser, a 33-year company veteran, as its new boss.

Kaeser, who has served as the company's CFO for seven years, now faces the challenge of whipping into shape a lumbering conglomerate with $104 billion of annual sales and products ranging from gas turbines to high-speed trains and ultrasound machines, according to report published by Reuters. Analysts say he has an understanding of its business and culture that was lacking in Loescher, an Austrian who was the first external recruit ever to run the company. He is expected to formulate a long-term strategy for Siemens, shed non-core units like those making hearing aids or healthcare software, and return control of the firm's far-flung businesses to top management, it added.

Loescher was asked to leave recently, i.e. four years before the end of his contract following a series of profit warnings. He was quoted in a German daily Sueddeutsche Zeitung saying, "I have a contract until 2017 and Siemens more than ever needs a captain." He was not the kind of person to abandon ship, he added. However, the company's supervisory board chaired by Gerhard Cromme decided to put him ashore.

Kaeser stated in a news conference yesterday at Siemens head quarters, "Whether we have 12 percent or only 10 percent in the end is not the only relevant aspect. What is really important is that we close the profitability gap with competitors and that all measures are structurally goal-oriented beyond 2014".