At the end of March 1949, in light of the uncertain political situation in postwar Berlin, the Siemens management decided to transfer the headquarters of Siemens & Halske AG to Munich and those of Siemens-Schuckertwerke AG to Erlangen as of April 1. Berlin remained the second headquarters location of both companies. This decision was preceded by several years of intense disagreement, when those against moving reasoned that Siemens could never regain its former status without Berlin.
Escaping from destruction – From Berlin to the southern part of Germany
Siemens was founded in Berlin in 1847. For decades, the German metropolis was the center of the electrical engineering company’s operations – despite its numerous agencies, branch offices, technical bureaus and production locations abroad. In the 1930s, Carl Friedrich von Siemens, who headed the company at the time, was nevertheless against the further development of the Siemensstadt location in Berlin because of growing transportation and logistical difficulties. He began expanding the company in the structurally weak regions of Thuringia and Franconia instead. During World War II, around 600 locations were established outside Berlin – initially in order to increase capacity and later because of the growing number of air raids on Berlin. From the late fall of 1944, top management also began talking about transferring company headquarters.
“Management in exile” as a survival strategy – Siemens is decentralized
Through contact with Sweden, it had become known that the Allies planned to split Germany up. Berlin would be in the Russian zone, occupied by Russian troops. The Siemens management in western and southern Germany reacted to this information by setting up so-called Gruppenleitungen (group directorates). This decentralization of management was designed to guarantee the firm’s ability to take action and its chances of survival beyond the end of the war. In February 1945, Ernst von Siemens took over the group directorate of Siemens & Halske (S&H), including all department units located in the western part of Germany and the corporate departments run jointly with Siemens-Schuckertwerke (SSW). Munich was designated as the headquarters of the group directorate since the American occupation zone was expected to offer businesses the best development opportunities. In addition, the company was no stranger to the Bavarian capital, because S&H had been operating the Isaria-Zählerwerke AG telecommunications factory there since 1927.
Three group directorates were formed from the factories and sales offices of SSW. They were set up in Hof and Mülheim an der Ruhr, with the activities in Hof being subsequently moved to Erlangen. Around 20 managers in all were transferred to the western part of Germany. Late in the summer of 1945, Siemens was in effect divided in two. The group directorates, whose corporate functions were comparable to managing board tasks, were now located in the western zones, where they acted on their own authority. The managers who remained in Berlin were responsible solely for business in the municipal area and the Soviet-occupied zone.
From the standpoint of tradition, Berlin was the clear choice for the headquarters. But what is tradition? It is all too often confused with habit. In this case, we had to create something new from the spirit of the old.Ernst von Siemens, 1978
Dispute over Berlin or Munich – Traditionalists versus modernizers
In November 1946, the measures introduced before the end of the war were approved by the Supervisory Board and the Managing Board. Nevertheless, major internal disputes subsequently arose, threatening the company’s unity. The so-called traditionalists continued to see the future of the company in Berlin – the old center of the German electrical industry – while their opponents recognized that it was essential to move the headquarters. The situation escalated in November 1947, when the powers of the group directorate heads were cut back, leaving them with a purely representative function, and an Interzonaler Vorstandsausschuss (inter-zone management committee) was established. In August 1948, the Supervisory Board in Berlin relieved the heads of the group directorates of their responsibilities.
In light of the prevailing political and economic events, this decision proved to be untenable. The transformation of Bizonia into Trizonia (the addition of the French occupation zone to the American and British zones), the failure of the Soviet-occupied zone to introduce a currency and economic reform, and the imminent establishment of the Federal Republic of Germany paved the way for a forward-looking decision that went down in Siemens history as the Starnberger Friede (Peace of Starnberg). As a result, the two parent companies once more came under joint management.