‘Job cuts could boost populism’

GERMANY’S economics minister urged Siemens AG on Friday to rethink planned job cuts and said job losses, particularly in economically weaker areas of the former East Germany, could spur an increase in right-wing populism.

Siemens may cut thousands of jobs as part of plans to overhaul its power and gas business, which is struggling with lower worldwide demand for large electricity- generating turbines, a person familiar with the plans told Reuters last week. Up to 11 work sites could be shut down.

The minister, Brigitte Zypries, told Siemens chief executive Joe Kaeser in a letter published by Bild newspaper that job losses in the former communist east could have negative consequences.

Discontent

“It is particularly critical when locations in structurally weak regions – for instance in eastern Germany – are up for discussion,” she told the Siemens executive. “It can fuel discontent and doubts and could have political fallout as we saw in the parliamentary election.”

The government has no legal authority to prevent private companies from carrying out layoffs, but it has other ways to pressure firms, including through corporate policies and reviews of export licences.

In the case of Siemens, Berlin is currently examining how two Siemens gas turbines sold for use in Russia turned up in Crimea, a region subject to EU sanctions.

Siemens spokesperson Philipp Encz declined to comment on the letter. He said that while several proposals were under discussion with labour, no decisions had been made on job cuts or plant closures.

Juergen Kerner, a senior official at union IG Metall and a member of the Siemens’ supervisory board, said reports the company could close up to 11 facilities had spooked workers and hundreds had already staged protests in Erfurt, Goerlitz, Leipzig and Erlangen. – Reuters