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In the 1880s, the German economy expanded dramatically, and Siemens & Halske began to encounter competition in the rapidly growing power-engineering market. Companies in the high-voltage sector also started to globalize. Innovative market strategies financed via the capital market gave these rivals significant advantages. Family-owned Siemens & Halske came increasingly under pressure.
Carl von Siemens had long argued that the electrical engineering company should be transformed into a stock corporation in order to gain the financial flexibility it needed to survive in this fierce competitive arena. However, Werner von Siemens rejected the idea. He insisted that his family remain the company’s sole owner.
In 1897, five years after the death of Werner von Siemens, the new company management transformed Siemens & Halske into a stock corporation in order to expand its capital base over the long term and ensure its competitiveness. Initially, the shares remained almost exclusively in the hands of the family. The new company’s articles of association also aimed to prevent any significant outside influence.
Sigmund Schuckert founded a precision engineering workshop in Nuremberg, Germany, in 1873. Under the name Elektrizitäts-Aktiengesellschaft vorm. Schuckert & Co. (EAG), his company was a leader in heavy-current technology at the turn of the century. By 1900, EAG had built 120 power plants all across Europe.
The capital-intensive construction and operation of power plants exceeded the company’s financial resources. In addition, cost and competitive pressures in the German electrical engineering industry mounted at the beginning of the 20th century. Like many other companies in its industry, EAG was plunged into crisis.
As part of the new consolidation process, Siemens & Halske’s heavy-current engineering businesses were merged with EAG in March 1903 to form Siemens-Schuckertwerke GmbH. The former competitor EAG contributed its production facilities in Nuremberg and all its branch offices and sales offices to the new company.
From now on, Siemens’ operations were distributed across two parent organizations: Siemens & Halske served the low-voltage market while the newly founded Siemens-Schuckertwerke was active in the market for high-voltage systems.
At the beginning of the 20th century, a number of Siemens production facilities had their own small, location-specific laboratories that conducted application-related research independently of one another. To secure the company’s ability to maintain a solid footing in technology and innovation over the long term, a central laboratory was established in 1905. Chemist Werner Bolton headed this laboratory, which was the forerunner of today’s Corporate Technology research department.
After Bolton’s death in 1912, Hans Gerdien was appointed to head the company’s Physical and Chemical Laboratory. He developed a concept for continuing the development of centralized research activities. His plan called for constructing a new building to house a total of seven laboratories, each with its own experimental facilities. In the process, some “progress work” was to be taken away from the location-specific laboratories, while basic research was to be protected from the influence of day-to-day business and from the individual facilities’ short-term commercial interests. In the spring of 1914, the Managing Board approved Gerdien’s proposals. The groundbreaking ceremony for the new Central Laboratory took place in 1916.
Beginning in 1885, the dramatic development of the high-voltage business led to rapid growth at Siemens & Halske, making it imperative that the company expand its manufacturing facilities. However, surrounding buildings made it impossible to expand the company’s existing locations on Markgrafenstrasse in Berlin and in the city’s Charlottenburg suburb.
In 1897, Siemens & Halske purchased a largely undeveloped tract of land northwest of Berlin. In the years that followed, this site was continuously enlarged through additional purchases. The company gradually consolidated nearly all its operations at this location. In 1914, under the name Siemensstadt (Siemens City), the campus was officially recognized as a locality within what was then the city of Spandau, Germany.
In addition to industrial facilities, Siemens constructed housing and recreational facilities for its employees at Siemensstadt and supported the construction of municipal infrastructure. The planning and expansion of the campus was coordinated by Carl Dihlmann in close collaboration with Karl Janisch, head of the Siemens Bauabteilung (Construction Department). The buildings erected by Janish and his successor Hans Hertlein, who was appointed chief architect in 1915, decisively shaped the company location.
Like many other companies in its industry, Siemens was involved in armaments production during World War I. Despite difficulties in making the transition and a scarcity of raw materials, the electrical engineering company quickly adjusted its manufacturing program to wartime requirements. Nevertheless, delivery bottlenecks and limitations on exports caused revenue to decline in civil manufacturing and on foreign markets.
During the war years – in addition to electrical engineering military equipment such as spotlights and equipment for warships and telephone and telegraph materials – the company manufactured goods normally produced by other industries. These activities ranged from the production of grenade fuses and machine-gun parts to the manufacturing of combustion engines for airplanes and automobiles.
Siemens was active in the aircraft market and designed its own biplanes as early as 1909. After 1914, the company expanded airplane and engine development and created the air-cooled radial engine, an ultrahigh performance power unit. Toward the end of the war, the company was also building large airplanes with up to six engines.
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