Setting the Course for the Future

The Founding of Siemens AG

October 1, 1966, was a historic date for Siemens – the day when today’s Siemens AG was founded, and thus the course was set for the future. The merger of Siemens & Halske AG, Siemens-Schuckertwerke AG and Siemens-Reiniger-Werke AG to form a single company established new structures for a more flexible, more agile corporation that was ready to meet the challenges of a new era. 

Technology, markets, taxes – Reasons for the merger 

The reasons for merging the three parts of the company and for the associated restructuring were technical, organizational and economic in nature. Technological progress in the reconstruction years since the end of World War II was increasingly blurring the lines between telecommunications, measurement technology and control technology on one hand, and power engineering on the other. What was more, increasing numbers of customers in these traditional Siemens markets were showing an interest in getting systems solutions from a single source. A similar trend was also emerging in business activities at Siemens-Reiniger-Werke. Throughout Siemens, both development and manufacturing repeatedly found themselves duplicating one another’s efforts, especially in measurement technology. Furthermore, as new technologies advanced, there was a need for the company to achieve a sharper focus in applying its research and development capacities. The merger and the accompanying reorganization were designed to accommodate these developments. 

 

Nevertheless, the deciding incentive for founding Siemens AG ultimately came from changes in German stock corporation law that took effect at the beginning of 1966. For the first time, the new laws included specific provisions governing corporate groups. To avoid the excessive administrative and fiscal burdens that would have resulted, the three parent companies merged to form Siemens AG on October 1, 1966. 

“Bringing things together that belong together” – Tasks are redistributed 

Ernst von Siemens, who headed the company at the time, hoped, through the legal and organizational merger of the three companies – Siemens & Halske, Siemens-Schuckerwerke and Siemens-Reiniger-Werke – to ensure leadership unity and continuity for his tradition-steeped electrical firm.

 

As early as the beginning of February 1966, he explained to the Managing Board members and the executive directors from the companies that were to merge that the new organizational form was “a better match for the company, which is constantly growing and changing in structure. Due to the rapid advances being made in electrical engineering, a steady influx of new areas of application is leading to new tasks. Merging into a single company will make it easier for us to perform these tasks in a way that makes sense and will allow us to bring things together that belong together.

Clear boundaries, greater autonomy – The reorganization of Siemens AG

In keeping with this goal, by 1969, the key areas of work at Siemens AG were divided into six clearly differentiated, largely independent operating Groups: the Components (B) and Data Systems (D) Groups emerged nearly unchanged from the previous structures, while the Power Engineering (E), Electrical Installations (I) and Telecommunications (N) Groups were created from scratch. Siemens-Reiniger-Werke began operating as the Medical Engineering (Med) Group. To ensure consistent management throughout the electrical engineering company, all topics of fundamental importance across the organization were brought together in five Central Departments: Business Administration (ZB), Finance (ZF), Personnel (ZP), Technology (ZT), and Sales and Marketing (ZV). These were joined by Regional Offices within Germany and by the Siemens Corporations (subsidiaries) outside Germany. The framework for collaboration among all the various parts of the company was defined in what was known as the Grundordnung (the Code of Policy of the Siemens Group).

If our company – while still respecting the tradition that has made us so great – can make the necessary changes without undue delay, then I have no doubt that we will also be able to master the great challenges that we will face in the future.
Ernst von Siemens, 1966

Ready for the future – A new identity for the entire company 

In conjunction with the merger that founded Siemens AG, a new identity was developed for the company overall. As early as the fall of 1965, top management had decided that effective October 1, 1966, the current range of company marks would be replaced with a single trademark. As had been the case previously, the future umbrella mark would consist of the word mark SIEMENS and the S&H monogram that had been in use since 1899. But now the electrical engineering company’s oldest trademark no longer stood for the company Siemens & Halske, but rather for the “House of Siemens” (abbreviated HS). 

 

 

The founding of Siemens AG, the new corporate structure and a uniform Corporate Identity equipped Siemens for the tumultuous technological transformation ahead, especially due to semiconductor and computer technology and increasingly globalized markets. It would make the company more agile in responding to what its customers wanted around the world, and uniform branding would sharpen the Siemens profile against its global competitors. Thus the course was set for the future, and this historic company was given the general outlines that are still visible today – in an era of far-reaching upheavals that once again face Siemens with major challenges.

 

 

 

 

 

Sabine Dittler | Dr. Frank Wittendorfer

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Further information on this topic

Further reading

  • Ernst von Siemens, Blazing a trail for Siemens AG, in: Siemens Historical Institute (ed.): Shaping the Future – The Siemens Entrepreneurs 1847–2018, Berlin 2018, pp. 177–202
  • Gerd Tacke, Ein Beitrag zur Geschichte der Siemens AG. Der Weg zum Weltunternehmen, Berlin / Munich 1976 (in German only)