There is an opposition between Siemens and BenQ Mobile because of the last-mentioned insolvency. Siemens AG’s executives delay huge pay raises to help German workers stranded by BenQ. An original deal between Siemens and BenQ Mobile was about divesting a non-performing business unit, as well as BenQ had pledged to maintain Siemens’ German production sites.
Last year BenQ got Siemens’ handset unit in an agreement that came with $500 million cash.
As Klaus Kleinfeld, Siemens Chairman declared that at Siemens senior managers would postpone for 1 year 30% pay raises in order to contribute about $6.4 million to a fund to help 3,000 German workers who are likely to lose jobs as a result of BenQ’s mobile phone troubles.
A “drop in the ocean” action as was described by Germany’s IG Metall is rather symbolic, as the amount of postponed executive compensation would provide about $2,000 each to benched BenQ employees. The pay will be added to a Siemens-created fund which will provide workers a total of $45 million in assistance—about $15,000 each.
In Germany the public, labour leaders and politicians showed its recognition of a clamour created by Siemens’ management action over an insolvency that could eliminate thousands of German jobs. As German press reported that the Chancellor Angela Merkel even telephoned Kleinfeld to tell him Siemens had “special responsibility” to the stranded employees. Also the company announced that ex-German BenQ employees will be treated as internal applicants for 2,000 existing openings at Siemens in Germany.