MUNICH (Reuters) -Siemens Energy’s management board has set up a task force to establish the scope of deepening problems at its crisis-ridden wind turbine division, including quality issues at its two most recent onshore platforms, two supervisory board sources said.
The investigation into the problems, which were unveiled in June and caused Siemens Energy’s shares to plunge by 37%, is flanked by a separate special committee consisting of members of Siemens Energy’s supervisory board, the sources said.
One key question it will deal with is why Siemens Energy’s leadership failed to spot the issues during the due diligence process ahead of its recent takeover of the remaining stake in the troubled division, Siemens Gamesa, the people said.
While the supervisory board continues to back both Siemens Energy CEO Christian Bruch and Siemens Gamesa CEO Jochen Eickholt, that could change should the investigation show that management should have noticed the problems during due diligence, the people said.
The latest problems caused Siemens Energy, in which Siemens AG still owns a direct 25.1% stake following a spin-off in 2020, to withdraw its 2023 profit outlook and flag more than 1 billion euros in costs to fix quality issues.
“A stage has been reached where there is agreement that this must be the last profit warning. Otherwise something has to change,” one of the people said.
Both committees will be able to draw on external advisors to gauge the full impact of the issues, which apart from the quality issues include potential design flaws and two possible loss-making offshore wind turbine agreements, the people said.
The quality problems in onshore are limited to Siemens Gamesa’s 5.X and 4.X platforms, the people said, allaying fears that the group’s total installed fleet of around 63,000 turbines could be affected.
Most of the problems, which include fault rates, are being observed at the 5.X turbine, of which 800 have been built so far, with 100 having been delivered to clients.
Consultancy DNV certified Siemens Gamesa’s turbine design during the due diligence process, the people said.
A spokesperson for DNV denied this, saying: “DNV did not certify the Siemens Gamesa’s turbine design.”
Siemens Energy declined to comment.
Siemens Energy also made efforts in recent months to help former parent Siemens reduce its stake via a sale to new investors, the people said, adding this process had been put on ice for the time being in light of the most recent profit warning.
(Reporting by Christoph SteitzEditing by Alexandra Hudson, Editing by Louise Heavens)
