1847: The company’s founding
Werner von Siemens laid the foundation for today’s Siemens AG in 1847 with his design for the pointer telegraph. The 30-year-old inventor hit upon an idea for substantially improving the electric telegraph developed by Charles Wheatstone and William Fothergill Cooke.
Together with precision mechanic Johann Georg Halske, he established the telegraph construction company “Telegraphen-Bauanstalt von Siemens & Halske” to manufacture his new device. The 10-man company began operation on October 12, 1847, in a building in a back courtyard in Berlin.
In 1848, the young company won a contract to build Europe’s first long-distance telegraph line. Extending largely underground from Berlin to Frankfurt, the roughly 670-kilometer link went into operation in February 1849. In March, the Frankfurt Parliament elected Friedrich Wilhelm IV German Emperor. Thanks to the new communications technology, the news from Frankfurt reached Berlin in just one hour.
After 1853: The Russian state telegraph network and the establishment of a subsidiary
In 1853, the Russian government awarded Siemens & Halske a contract to construct a telegraph line from Warsaw to Russia’s border with Prussia. After the line was built, further contracts followed. The company opened a construction office in St. Petersburg headed by Carl von Siemens and immediately began work on the roughly 9,000-kilometer Russian state telegraph network. Two years later, Siemens & Halske also won a contract to provide maintenance services for the Russian telegraph lines.
In 1855, the construction office in St. Petersburg was converted into an independent subsidiary. Werner von Siemens appointed his younger brother Carl head of the company in recognition of his contribution to the business’s positive development.
Success in Russia generated tremendous momentum for the Berlin-based company. By 1856, Siemens & Halske had 330 employees, two-thirds of whom worked in Russia. At times, the export rate reached as high as 80 percent.
After 1858: The founding of an independent English subsidiary
Siemens & Halske showed interest in tapping new foreign markets at an early stage. Only three years after the company was founded, a sales office was opened in England, where William Siemens, a younger brother of the company’s founder, was employed as an agent. In 1858, the London office was converted into an independent company – Siemens, Halske & Co. – headed by William Siemens.
For a long time, operations at Siemens & Halske’s London subsidiary focused primarily on the market for submarine cables. To avoid dependence on the quality and prices of English cable suppliers, the English company opened its own cable plant in Woolwich near London in 1863.
1858: The company’s first profit-sharing scheme
The desire to motivate and retain highly qualified employees over the long term induced Werner von Siemens to introduce a profit-sharing scheme in 1858. Beginning in 1866, managers also benefited from the company’s business success through stock-taking bonuses.