In a process that will involve an unspecified number of job cuts, Siemens – one of the few German companies with any real presence in Argentina – plans to re-tailor its operations to the new economic realities there.
Down and out in Buenos Aires
Siemens AG announced on Monday that it will make job cuts in its Argentinian operations following the country's economic collapse.
A day after Argentina's devaluation of the peso by 29%, Siemens spokesman Peter Gottal said that the diversified technology and engineering company would be reviewing its personnel levels in the South American country and would tailor them to the current situation.
"We aim to raise the proportion of our total business accounted for by our services operations, to take advantage of the high margins that these produce, and will continue our restructuring with job cuts," Gottal said.
Siemens' workforce is currently around 3,000-strong, making it one of the country's largest German employers.
According to the spokesman, a "not insignificant" number of cuts were made in the Argentinian workforce last year as part of a restructuring program, but the company has not yet given any indication how many positions will be cut this time around.
According to its own estimates, Siemens generated sales revenue of 383 million euro in its financial year to 30 September, and it incurred a net loss of ten million euro.
The spokesman was not prepared to comment on how the peso's devaluation would affect the company's results for the current financial year.
It seems that the handful of major German companies active in Argentina plan to scale back their activities rather than abandon them altogether or undertake the kind of major closures announced by Italian autos giant Fiat.
DaimlerChrysler, for example, which assembles the Sprinter transporter in Argentina, plans to make up for the decline in demand on the Argentinian market with increased exports to Brazil.
When Argentina was seen as one of the major growth markets, German companies were criticized for missing the boat and losing out to Italian and Spanish rivals.
Now, according to Rainer Perau, Latin America expert of Germany's DIHT federation of chambers of trade and industry, "German companies have not only missed out on the opportunities but on the crisis."
But Helga Krämer of the Ibero-American Association believes that German firms will still miss out as a result of their lack of interest in Argentina.
She said whether it's telecommunications equipment that's required or trains for the underground system, Argentina will continue to be reliant upon imports from Europe.