Siemens Energy is bailing out furniture despite a vulnerability in its Spanish subsidiary Gamesa

MadridSiemens Energy begins its fiscal year (October 2023 to September 2024) with a furniture rescue despite the critical state of its Spanish subsidiary Gamesa. During the first quarter of the year, that is, between October and December of last year, the German group achieved 1,582 million euros, despite the losses recorded by Gamesa (426 million euros during this period), as the company announced on Wednesday morning.

The result of Siemens Energy, the energy arm of the German Siemens Group, represents a balloon of oxygen for the company when compared to the result of the same period of the previous fiscal year, when it announced losses amounting to 384 million euros. In fact, although it left the red numbers behind, it is worth noting that the gains are mainly explained by the sale of an 18% stake in the Indian subsidiary of Siemens Energy to Siemens AG.

Since the marriage between Siemens and Gamesa took place in 2018, when they merged, the problems have not stopped and its Spanish subsidiary, which is based in Zamudio (Biscay), has become a stone in the shoe of the German company. The reason is a crisis derived from the components with which Gamesa, which specializes in the production of wind turbines, manufactures turbines. Windmills, which led to failed models. All this means that the company of Basque origin ended the previous fiscal year with losses of more than 4,000 million euros, sending a billion-dollar rescue plan flying over the Basque company.

Waiting for aid

Although the rescue itself has not yet materialized, at the end of 2023 the German and Spanish governments promised public assistance to Biscayan. These are subsidies that could be life-saving if you take into account that Siemens Energy forecast on Wednesday that it expects Gamesa to once again end the financial year with losses: 2,000 million euros.

The aid provided by the German government has been translated into general guarantees worth 7.5 billion euros, and the aid provided by the Spanish government has not yet been finalized. The Ministry of Industry expected that it is working on a possible line of bank guarantees so that Gamesa can sign new contracts abroad and thus revive its production of wind turbines. Navy Or marine (currently selling windmills on land or on the beach hanging). “[Les subvencions espanyoles] “It is a work in progress, but we see the support of the Spanish government as positive,” Siemens Energy CEO Christian Brunch stressed during the Davos Economic Forum held in Switzerland at the end of January. “We need to restore market confidence,” Brunch said.

For trade unions, the desirable scenario is for Siemens Energy to take over the repair of machinery to make the wind turbines defect-free again, although this might involve closing the plants for a period of time. In any case, the unions demanded “all aid.” [públiques] “It must be linked to job guarantees.”