Fujitsu Siemens tie-up under threat

Fujitsu and Siemens failed to sign an agreement that would merge their European PC operations into a single company, according to German business magazine Wirtschaftswoche. In a report to be published tomorrow, the magazine claims the companies were due to sign a contract on 2 August, but that did not happen. Instead, both of them fell out over who will take charge of the joint venture. The battle is between Winfried Hoffmann, Fujitsu Europe's German boss, and Robert Hoog, head of Siemens' computer systems division. Hoffmann wants the job himself, but Hoog has the backing of Siemens CEO Heinrich von Pierer. Hoffmann has threatened to quit if he is passed over, Wirtschaftswoche claims. The combined operation -- Fujistu Siemens -- is due to commence trading on 1 October, so the two principals have a little time yet to come to an agreement. The deal was announced back in June -- we predicted it back in May -- after a Siemens' attempt to get into bed with Acer failed. So could the Fujitsu plan go the same way? Possibly, but since the whole deal is a way of providing Siemens with a way of getting out of the PC business, it's in the German giant's interest to keep Fujitsu sweet, and that will almost certainly ensure Hoffmann gets the job after all. Other issues are emerging too. Back in June, Fujitsu UK MD Brian Taylor said the merger would not involve any redundancies since the organisational change would be "relatively minor". However, Wirtschaftswoche cited industry analysts who believe that the two companies' combined workforce of 9600 people (1,600 from Fujitsu, 8000 from Siemens) will have to be cut by up to 30 per cent. ®