Siemens to Form Joint Business Initiatives
With Yazaki
Joint ventures to develop, manufacture, and sell
advanced vehicle electrical systems
REGENSBURG, Germany, March 26 Siemens Automotive AG
(Regensburg, Germany) and the Yazaki Corp. (Tokyo) are forming a worldwide
cooperative initiative in electrical systems for passenger vehicles. Dr.
Franz Wressnigg, President of Siemens Automotive AG, described the joint
initiatives as an important step in Siemens' strategic reorientation of its
vehicle electrical distribution systems business: "We intend to concentrate on
electrical distribution electronics and systems, while Yazaki will take the
lead in this alliance in the production of wiring harnesses," said Wressnigg.
The agreement with Yazaki involves two joint ventures for the sale,
program management and development of vehicle electrical/electronic systems,
for the combined global Siemens and Yazaki business at Ford Motor Co., BMW and
Renault. A third joint venture will be dedicated to the manufacture of
vehicle wiring harnesses. The transaction still requires regulatory and other
approvals.
The first two joint ventures, which will be based in Germany and the
United States, are designed specifically to be formed for the development and
sale of vehicle electrical/electronic distribution systems. Yazaki and
Siemens both have an equal stake in the joint ventures. A managing board
consisting of six members, with equal representation from both companies, will
oversee the two joint ventures where both companies have equal stakes.
The contract also comprises a third joint venture for the manufacture of
vehicle wiring harnesses in which Yazaki is to have a 75 percent share, to
Siemens' 25 percent. This joint venture, based in Germany, will include
Siemens' manufacturing locations in Slovakia, the Czech Republic, Lithuania,
India, Turkey and Brazil. The manufacturing joint venture provides for a
total of about 5,000 employees. Financial details of the transaction were not
disclosed.
The synergies generated by the Siemens and Yazaki worldwide cooperation in
vehicle electrical distribution systems lie in combining Yazaki's and Siemens'
electronics, system know-how and manufacturing technologies. "This joint
initiative allows us (Siemens) to apply our strategy of focusing on the
development, manufacture and sale of electrical distribution electronics and
systems, and further expands our position as one of the world's leading
suppliers," said Wressnigg. This strong partnership will result in excellent
customer satisfaction for the business already under development, as well as
positioning the joint venture as a strong competitor for future electrical
distribution systems business. Through its partnership with Siemens, Yazaki
can further expand its position as the world's largest independent
manufacturer of vehicle electrical systems, and in particular strengthen its
presence in the European marketplace.
Siemens will contribute engineering centers from its Regensburg, Brake
(Germany), Toulouse (France) and Detroit area operations to the
electrical/electronic systems joint ventures to be based in Regensburg and
Detroit. Yazaki will provide engineering proficiency from its Detroit and
European area operations. By pooling their activities in engineering, sales,
program management, quality and logistics the two companies will hold a strong
position in the emerging market for the integration of vehicle electrical and
electronic systems, which are increasingly in demand with vehicle
manufacturers.
The proportion of control electronics in a vehicle electrical distribution
system varies depending on the model, but currently represents about 20 and 25
percent of manufacturing costs. Siemens is to provide the electrical
distribution electronics for the system joint venture and Yazaki will
contribute the vehicle wiring harness and components. Siemens Automotive
presently is one of the world's leading producers of vehicle
electrical/electronic controls and supplies approximately two million
Intelligent Switching Units per year to the international automotive industry.
The third joint venture, for the manufacture of vehicle wiring harnesses,
is to be based in Cologne and Regensburg. Siemens will incorporate into this
holding company the manufacturing plants of Michalovce (Slovakia), Plzen
(Czech Republic), Klaipeda (Lithuania), Chennai (India), Mudanya (Turkey) and
Irati/Bahia (Brazil). At these locations, a total workforce of about 5,000 is
predominantly employed in the manufacture of vehicle wiring harnesses. These
Siemens plants recorded aggregated sales (derived from the manufacture of
electrical systems) of approximately $214 million in fiscal year 1999/2000.
The remaining manufacturing locations for vehicle electrical systems owned
by Siemens Automotive AG are not affected by the agreement. Negotiations are
currently under way with another company concerning the plants in Stribro
(Czech Republic), Seixal (Portugal), Brussels (Belgium) and Puebla (Mexico).
The 7,000 employees at these plants are predominantly dedicated to the
manufacture of vehicle wiring harnesses.
Yazaki Corporation is a global leader in the development and manufacturing
of vehicle power and data solutions and is continually researching and
developing advanced electronic technologies for the automotive sector. Yazaki
produces virtually every component associated with electrical distribution
systems, including instrumentation, switches, junction blocks, connector
systems, electronics and advanced technology. Worldwide, the company employs
more than 100,000 people in 31 countries, 1,400 of whom are based in the
company's North American operation and research center in Canton, Mich. More
information can be found at http://www.yazaki-na.com .
Siemens Automotive AG is a tier-one supplier of automotive and electrical-
electronic systems and components with applications covering gasoline and
diesel powertrain systems, safety and chassis systems, body electronics,
electric motor drives and driver information systems. Worldwide sales in
fiscal year 1999/2000 totaled $3.7 billion. Siemens Automotive is a wholly
owned company of Siemens AG. For more information, please visit
http://www.siemensauto.com .
Siemens AG, headquartered in Berlin/Munich, is a leading global
electronics and engineering company, employing over 447,000 people in 193
countries, with worldwide sales in excess of $74 billion in fiscal 2000
(10/1/99 - 9/30/00). The United States is Siemens' largest market, where it
employs over 73,000 and recorded sales of more than $17 billion in fiscal
2000.
This release contains forward-looking statements based on beliefs of
Siemens' management. Such statements reflect the company's current views with
respect to future events and are subject to risks and uncertainties. Many
factors could cause the actual results to be materially different, including,
among others, changes in general economic and business conditions, changes in
currency exchange rates and interest rates, introduction of competing
products, lack of acceptance of new products or services and changes in
business strategy. Siemens does not intend or assume any obligation to update
these forward-looking statements.
