News

posted on 14 July 2008 08:36

The Fujitsu Siemens Computers business may shut down in months if Siemens fails to sell its stake to Fujitsu.

Reuters and other sources report that Siemens is offering Fujitsu its half share in the Fujitsu Siemens Computers (FSC) joint venture as it struggles to reshape its group business and cut losses. Siemens has just announced a more than 17,000 headcount reduction. It has also recently gone through a substantial bribery scandal resulting in fines and job losses at the highest level.

FSC was created in 1999 with Siemens bringing in its then Siemens Nixdorf subsidiary into the 50:50 joint venture with Japan's Fujitsu.

The FSC JV contract runs out in the autumn of this year and will be automatically renewed for five years unless either party decides not. Under the JV contract terms a party wishing to end the contract has to offer its share to the other. Siemens executives have already travelled to Japan to do this, according to reports.

The Financial Times Deutschland claims that neither party will want to be solely responsible for FSC, which has 10,500 employees and manufactures a full line of notebooks, desktops, servers, mainframes and storage products, amongst which is the highly-regarded CentricStor virtual tape line. It also has a services business.

FSC has lost market share over the past few years and the Siemens CEO, Peter Loescher, has said that it is a weak performer. The weak dollar makes imported US IT products cheaper and that is exacerbating the problem for Loescher. FSC CEO Bernd Bischoff has said that FSC had an unsatisfactory second quarter because of this.

The current quarter does not look any better and the full year results may be worse than hoped for.

FSC was not immediately able to comment on this story.

^{[Chris Mellor.]}