Almost exactly a year ago, Siemens confirmed its acquisition of Invensys Rail, and at the time we said we thought it was a good merger for both parties. A year on, are those expectations really being met?
With any corporate acquisition there are always fears of job losses, and there is no question that there have been cuts at Invensys Rail. Ascertaining the precise figure is challenging, but it appears that the majority of those job losses were in administration and management functions duplicated at Siemens rather than in the critical engineering and design posts that represented so much of Invensys Rail’s strength.
Any expectations of a ‘smash and grab’ raid by Siemens on Invensys Rail’s product range and intellectual property remain unrealised too. Recruitment across Siemens’ Mobility and Logisitics division is, we are told, rising in key markets, though the ongoing shortage of signalling engineers (an issue we shall be looking at very soon in more detail) remains a challenge. Furthermore, in Spain, where the Dimetronic operation was vastly bigger than Siemens’ own presence in Iberia, it’s Siemens’ operation which has been absorbed into the Invensys Rail one – quite the opposite of most takovers.
Siemens continues to win signalling deals, and with Westrace interlockings planned for countries such as Kazakhstan where Invensys Rail had little if any market presence, the synergies expected from the product ranges and key markets of both companies may well be coming to fruition.
The integration of Invensys Rail into Siemens remains a huge challenge for both companies, and realistically it’s likely to be 18 months to two years after the acquisition that major results will be clear. Nonetheless, it appears so far that the merger is proving broadly successful.
The challenge for Siemens is now to make the most of its signalling division’s vastly expanded scale.