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Siemens plans restructuring and capacity adjustments in two divisions

Layoffs due to operational reasons still to be avoided

Restructuring and capacity adjustments are planned for the near future at two divisions of Siemens? Industry Sector. In connection with an upcoming change in technology at Low Voltage Motors, plans call for reorganizing the production structure at this business segment of the Drive Technologies Division. Due to an ongoing slump in volume in the key mechanical engineering market, an adjustment of the Division?s production capacity is also planned. As a result, by the end of 2012, a total of roughly 840 jobs at the Division?s location in Bad Neustadt an der Saale (Germany) are to be cut and some 1,200 retained from the location?s current total workforce of slightly more than 2,000. At the Division?s Erlangen (Germany) location, some 300 further jobs are to be eliminated. At the Industry Solutions Division, the workforce in Germany is to be reduced by around 850 due to declining market volume. These plans were presented today to the Committee for Economic Policy of Siemens AG. Consultations with the relevant employee representatives will begin immediately. „We intend to honor our pledge to make workforce-related adjustments as far as possible without layoffs for operational reasons. We?ve achieved this up until now by using a wide variety of measures ? even in cases where the adjustments were considerably more extensive. Therefore, I?m convinced that the employee and employer sides will be successful this time as well,? said Siemens? Chief Human Resources Officer Siegfried Russwurm.

Siemens? Drive Technologies Division currently manufactures standard low-power low-voltage motors for the European market primarily in Mohelnice (Czech Republic) and, to a much lesser extent, in Bad Neustadt (Germany). The introduction of the next-generation of energy-efficient motors will make it necessary to invest in assembly lines and bundle production at one location. As a result, 640 jobs at the Drive Technologies Division in Bad Neustadt will be eliminated over approximately the next two and a half years due to structural factors. „As of 2011, we will primarily be offering standard motors in the new energy-efficiency IE2 class and above. By bundling our manufacturing activities in Mohelnice, we intend to actively promote technological change and to gear our structures to the future,? said Klaus Helmrich, CEO of the Drive Technologies Division.

In this context, plans call for making the Bad Neustadt location an innovation and technology center, for instance for synchronous motors and mechatronic products and solutions, by building on the development and manufacture of high-grade servo motors and machine tools and production machines already located there. However, this business has also been affected by a massive decline in orders in the mechanical engineering area. As a result, in the medium term, there will be a further surplus capacity of around 200 positions due to cyclical factors. At the partner facility on Frauenauracher Street in Erlangen, where the electronics for the motors are produced, there will likewise be a surplus capacity of some 300 positions due to cyclical factors.

The Industry Solutions Division, which implements projects with partners in the steel, cement and paper industries, among others, expects its capacity utilization to reach its lowest point in 2011. „Investment activity in the construction of new systems is still cautious in our markets, especially in Germany. This factor is compounded by weakness in the service and modernization businesses. As a result, we have a total surplus capacity of around 850 positions distributed across several locations in Germany. We?re tackling this challenge at an early stage while also strengthening our local sales activities in order to remain competitive on a long-term basis. Together with the employee representatives, we will now develop solutions for reducing capacity in the short and medium term,? explained Jens Wegmann, CEO of the Industry Solutions Division.

Siemens intends to minimize the social impact of the planned workforce reductions to the greatest extent possible. As in the past, the company will use all means at its disposal for this purpose. These include the voluntary termination of employment contracts, the expiration of limited-term contracts, the reduction of temporary contracts, the exchange of personnel between locations and reduced working hours.

The Siemens Industry Sector (Erlangen, Germany) is the worldwide leading supplier of environmentally friendly production, transportation, building and lighting technologies. With integrated automation technologies and comprehensive industry-specific solutions, Siemens increases the productivity, efficiency and flexibility of its customers in the fields of industry and infrastructure. The Sector consists of six divisions: Building Technologies, Drive Technologies, Industry Automation, Industry Solutions, Mobility und Osram. With around 207,000 employees worldwide Siemens Industry achieved in fiscal year 2009 total sales of approximately ?35 billion. http://www.siemens.com/industry

The Siemens Drive Technologies Division (Nuremberg, Germany) is the world’s leading supplier of products and services for production machinery and machine tools. This includes standard products but also encompasses industry-specific control and drive solutions. Integrated technologies along the entire drive train with electrical and mechanical components offer highest potential to reduce energy consumption in industrial plants. The services provided by the Division include mechatronics support in addition to online services for web-based fault management and preventive maintenance. With around 36,000 employees worldwide (September 30), Siemens Drive Technologies achieved total sales of ?7.5 billion in fiscal year 2009. www.siemens.com/drivetechnologies

The Siemens Industry Solutions Division (Erlangen, Germany) is one of the world’s leading solution and service providers for industrial and infrastructure facilities comprising the business activities of Siemens VAI Metals Technologies, Water Technologies and Industrial Technologies. Activities include engineering and installation, operation and service for the entire life cycle. A wide-ranging portfolio of environmental solutions helps industrial companies to use energy, water and equipment efficiently, reduce emissions and comply with environmental guidelines. With around 31,000 employees worldwide (September 30), Siemens Industry Solutions posted sales of ?6.8 billion in fiscal year 2009.

This document contains forward-looking statements and information ? that is, statements related to future, not past, events. These statements may be identified by words such as „expects,? „looks forward to,? „anticipates,? „intends,? „plans,? „believes,? „seeks,? „estimates,? „will,? „project? or words of similar meaning. Such statements are based on the current expectations and certain assumptions of Siemens? management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens? control, affect Siemens? operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For Siemens, particular uncertainties arise, among others, from changes in general economic and business conditions (including margin developments in major business areas and recessionary trends); the possibility that customers may delay the conversion of booked orders into revenue or that prices will decline as a result of continued adverse market conditions to a greater extent than currently anticipated by Siemens? management; developments in the financial markets, including fluctuations in interest and exchange rates, commodity and equity prices, debt prices (credit spreads) and financial assets generally; continued volatility and a further deterioration of the capital markets; a worsening in the conditions of the credit business and, in particular, additional uncertainties arising out of the subprime, financial market and liquidity crises; future financial performance of major industries that Siemens serves, including, without limitation, the Sectors Industry, Energy and Healthcare; the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies; a lack of acceptance of new products or services by customers targeted by Siemens; changes in business strategy; the outcome of pending investigations and legal proceedings and actions resulting from the findings of these investigations; the potential impact of such investigations and proceedings on Siemens? ongoing business including its relationships with governments and other customers; the potential impact of such matters on Siemens? financial statements; as well as various other factors. More detailed information about certain of the risk factors affecting Siemens is contained throughout this report and in Siemens? other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC?s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

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