Siemens Bribes Leave Von Pierer Unbowed in CEO Memoir: Books

The cover jacket of the Heinrich von Pierer autobiography "Gipfel-Stuerme" (Summit Storms). Von Pierer, the former chief executive of Siemens AG, left the company after a corruption scandal that erupted in 2006. Source: Econ Verlag via Bloomberg

He dined with Nicolas Sarkozy of France, was invited to join German Chancellor Angela Merkel’s cabinet, and once addressed the United Nations Security Council.

As chief executive and chairman of Siemens AG, Heinrich Von Pierer penetrated the top echelons of world decision-makers.

Then his career was shattered by a corruption scandal that engulfed Europe’s largest engineering company in 2006, as we’re reminded by von Pierer’s long-awaited autobiography, “Gipfel-Stuerme” (“Summit Storms”). Overnight, the toast of corporate Germany became corporate toast.

For decades, Munich-based Siemens paid kickbacks and bribes to win contracts in places including Russia, Bangladesh, Venezuela and Nigeria, according to investigations in more than a dozen countries. The company, whose workforce of 400,000 dwarfs the population of Bonn, agreed in 2008 to pay $1.6 billion to settle probes in the U.S. and Germany.

Von Pierer was charged with no crime and paid 5 million euros ($6.8 million) to Siemens to settle its civil claims against him. His memoir has just reached bookstores, in time for his 70th birthday yesterday.

The book recounts von Pierer’s rapid ascent to the top of Siemens, whose products range from high-speed trains to hearing aids, and his even swifter fall from grace. It also aims to restore his rightful legacy as the man who steered Siemens through an era of breathtaking change and transformed the company from a national giant into a global powerhouse.

Limited Sympathy

It’s hard not to empathize with von Pierer when he describes how, a year after his resignation as chairman, he received a letter from Siemens asking him to stay away from the company’s offices. His secretary was reassigned; his personal files were packed into boxes and sent to his home in Erlangen, north of Nuremberg. This was after 38 years of devoted service to Siemens.

Yet my sympathy was checked by his response to the investigations and their consequences. He gets defensive, blames everyone else for his misfortune, and seems averse to soul-searching, Germany’s great national pastime.

Von Pierer casts himself as the victim of a media “big game hunt” (yes, some of the coverage was inaccurate and unfair), and says prosecutors included elements in their settlement that he disagreed with (yes, they were tough, though that’s their job, and he did sign the document).

Pleading Ignorance

Throughout, he evades the big questions. How could such scandalous practices have arisen? What was it about the Siemens corporate culture that encouraged some executives to think bribery was OK? Von Pierer pleads ignorance in his defense.

“In what way should I have taken responsibility for events that I didn’t know about?” he asks. He says he only learned much of the detail through the press. If so, why?

The furthest von Pierer goes toward expressing regret is to quote himself at the January 2007 shareholders’ meeting, where he said he was “personally disappointed” with what had happened. Just disappointed -- not outraged or scandalized.

His book does contain some memorable anecdotes: His first banana, handed to him by a U.S. soldier in the postwar years, tasted disgusting because he didn’t know he had to peel it. As for his entrée to Siemens, it came through a drunken high-school graduation party.

That night, von Pierer jumped naked into a private pool and, after the homeowner phoned the police, fled through a barbed-wire fence. Covered in cuts and gashes, he landed in a hospital for two weeks. When he returned, on crutches, to apologize, the owner -- Siemens’s future personnel director -- told him to get in touch after university.

Ship’s Captain

A former Bavarian junior tennis champion, von Pierer comes across in these pages as a decent, humane manager with a strong sense of responsibility for his staff, long-term vision, deep commitment, an excellent grasp of complex technology and sharp negotiating skills. Yet decent, competent, even visionary managers can still mess up.

He often uses nautical imagery in his book, likening Siemens to a ship and himself to its captain. He guided that vessel safely through turbulent times, making many wise -- if unfashionable -- decisions. During the dotcom boom, for example, he ignored analysts’ advice to focus on communications, avoiding the fate of peers with similarly venerable pedigrees such as Marconi Communications Ltd.

Yet he missed the iceberg on the horizon and sailed straight into it. The ship will survive, with a few dents.

Von Pierer had to go.

“Gipfel-Stuerme: Die Autobiographie” is published by Econ Verlag (432 pages, 24.99 euros). There are, as yet, no plans for an English translation.

(Catherine Hickley writes for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are her own.)

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