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New Siemens Gamesa CEO seeks harmony at struggling wind turbine maker

New Siemens Gamesa CEO seeks harmony at struggling wind turbine maker

A model of a wind turbine with the Siemens Gamesa logo is displayed outside the annual general shareholders meeting in Zamudio, Spain, June 20, 2017. REUTERS/Vincent West

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MADRID, March 24 (Reuters) – The new chief executive of Siemens Gamesa (SGREN.MC) aims to fix glitches at the wind turbine business that contributed to profit-sapping delays just as soaring materials and logistics costs ate into margins across the sector.

Speaking after a shareholder meeting on Thursday, 24 days into his new role, Jochen Eickholt told a news conference that he had found “singing together does not fully function in various areas of our business and that is what needs to be improved on”.

Global ambitions to phase out fossil fuels have stoked voracious demand for wind power generators, but their manufacturers, including Danish market leader Vestas (VWS.CO) have been squeezed by higher costs after government subsidies for development became increasingly unfashionable.

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Eickholt, a Siemens AG (SIEGn.DE) veteran, took the top job at Siemens Gamesa after the company suffered a series of losses it blamed on supply chain disruptions linked to COVID-19, high raw material costs, and problems developing an onshore turbine. read more

On Thursday he said some of the problems had been internal.

“Some of what went wrong was clearly in our process landscape where there was the introduction of delays to an unbearable extent,” he said on Thursday.

“If you look at the art – if you wish – of how to develop a product, that is delayed to an unacceptable extent and that is what we need to work on.”

High costs for energy, commodities and logistics may now be compounded by Russia’s invasion of Ukraine, he said.

Parent company Siemens Energy is exploring ways to take more control, including possibly buying the 33% stake it does not already own, sources have told Reuters, as the turbine maker’s profit warnings have weighed on its own financial projections. read more

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Reporting by Isla Binnie; Editing by Toby Chopra

Our Standards: The Thomson Reuters Trust Principles.

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