April 15 (Bloomberg) -- Barbara Kux spent four years making Ford Motor Co. one of the best-selling brands in eastern Europe and wringing savings from its operations across the continent. Siemens AG is counting on her to reproduce that success.

“She really transformed Ford’s presence in eastern Europe,” said Nick Scheele, who was the automaker’s president when she left the company in 2003. Kux, 55, consulted him before taking the job overhauling Siemens’s supply chain in November. “She’s very disciplined, very intellectually rigorous. For women to succeed in old traditional businesses such as Ford or Siemens, they have to be noticeably better.”

The challenge for the first female board member in Siemens’s 161-year history is to help meet profit targets that haven’t been lowered since the global recession decimated demand for the company’s factory machinery and lighting. Europe’s biggest engineering company forecasts at least 8 billion euros ($11 billion) in earnings from its main businesses, while 18 analysts surveyed by Bloomberg predict 7.05 billion euros.

“The world economy was in a very different place when Siemens gave guidance in July 2008,” said Andreas Willi, a London-based analyst at JPMorgan who estimates profit at the industry, energy and health-care divisions at 6.6 billion euros. “While Siemens was quite cautious on the economy early on, it still got surprised by the sharp decline in its Automation, Drives and Lighting businesses.”

Suppliers Targeted

Chief Executive Officer Peter Loescher says he brought Kux onto the board at “just the right moment” as Siemens seeks to save money through grouping purchases together and increasing supplies from lower-cost countries. Kux already predicted that she will reduce the number of suppliers by 20 percent this year from the current 370,000.

Kux, who declined to be interviewed, presents her plans to overhaul Siemens’s 42 billion-euro global purchasing costs on April 29 when the company reports second-quarter results.

Her history suggests she has a good chance of success. Kux comes to Munich-based Siemens from Royal Philips NV, where she helped save 1 billion euros by slashing suppliers by 60 percent and shifting purchasing to lower-cost countries. She achieved those savings when controlling a 17.9 billion-euro budget at the Dutch electronics maker, less than half of what she manages at Siemens. Philips got 47 percent of global supplies from countries with lower wages last year.

“When she wants something, she’ll get it,” said Harry Holzheu, a communication coach who said he trained Kux when she was at Swiss engineer ABB Ltd. “She’s a whirlwind, she sweeps people along with her. They get infected by this zest for action that’s impossible to resist.”

Billions in Savings

Analysts predict that Siemens will target 2 billion euros in gross savings, according to the median of 10 estimates in a Bloomberg survey. At least half of that will be given up to customers through lower prices or eroded by cost inflation, said Peter Reilly, a London-based analyst at Deutsche Bank AG. So- called “sector profit” from the three main divisions fell 2 percent in the year through September to 6.52 billion euros, after missing fourth-quarter estimates.

“I’m not so excited about the program,” said Michael Bahlmann, a Hamburg-based analyst at MM Warburg & Co. “They probably can generate savings. It’s a laudable effort. But it remains to be seen whether it’s more marketing or shows that they are really serious.”

Siemens has lost 31 percent in Frankfurt trading in the last 12 months, compared with a 30 percent decline in Germany’s benchmark DAX Index. U.S. rival General Electric Co. has dropped 63 percent during that period, compared with a 36 percent decline in the Dow Jones Industrial Average.

‘Key Driver’

Savings from the supply chain will be “a key driver for securing 2010 targets,” Chief Financial Officer Joe Kaeser said at an April 1 investor conference in New York. Siemens currently makes only one-fifth of purchases in low-cost countries. Kux’s team includes Richard Hausmann, head of the company’s operations in China.

“She’ll listen to suppliers, to clients, to a wide variety of people, and that’s critical,” according to Frank Brown, dean of INSEAD business school in Fontainebleau, France, where Kux earned a Masters of Business Administration with distinction. “You don’t get to the top of procurement at major organizations without being a good team player and a good negotiator.”

Siemens’s suppliers include computer-device maker Semtech Corp. as well as software company TTI Team Telecom International Ltd., which gets 6.3 percent of its revenue from the German company, according to data compiled by business relationship Web site Connexiti.com.

Nestle, ABB

Kux started her career in 1978 at Nestle SA as a marketing manager and moved to Dusseldorf for McKinsey & Co., to ABB in Zurich and then back to Nestle as president for Poland. In 1999, she joined Ford as director of central European sales and then Philips four years later. Fortune Magazine named her one of the 50 most powerful women in business in 2007.

“She’s absorbed the fact that you have to be multicultural in today’s global business,” said Ford’s Scheele. “It’s not enough just to speak the language, you have to be able to absorb the culture.”

During her time in eastern Europe in the 1990s, she encouraged a focus on local brands like Polish mayonnaise and chicken-stock maker Winiary and Czech confectioner Orion, said Wolfgang Reichenberger, a former Nestle chief financial officer who’s known Kux since the 1980s. Those brands became fashionable again as the initial enthusiasm over Western labels faded.

“She tries to keep the big picture in mind and not get lost in details,” Reichenberger said. “She creates value that’s sustainable and not just short-term.”

Kux kicked off her savings efforts in January by hosting two days of meetings and workshops with more than 100 supply chain managers where they agreed on milestones and duties. Udo Niehage, head of the company’s power transmission unit, said she meets regularly with division chiefs.

“Ms. Kux comes from outside, so she’s not tied down to well-trodden paths,” Niehage said. “She’s very agile. There’s a lot of energy there. She comes with new and fresh ideas. I was very positively surprised.”

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net.

Last Updated: April 14, 2009 19:04 EDT