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Siemens executives yesterday agreed to put off a 30% pay rise for a year and contribute the €5m (£3.4m) to a €35m fund to retrain some of the 3,000 employees threatened with redundancy at its stricken former mobile phone business.
The German technology group has suffered a torrent of abuse from politicians and trade unions since Taiwan's BenQ, which took over the loss-making mobile unit last year, pulled the plug and filed for its insolvency on Friday.

The fresh bout of criticism - emanating from as high up as chancellor Angela Merkel who made private calls to Klaus Kleinfeld, chief executive of Siemens - intensified the outrage already expressed at the scale of the pay increases, the first for three years.
Germany, a social market economy and self-styled egalitarian, classless society, is increasingly concerned at the growing gap between boardroom and shopfloor pay. Union leaders accused Siemens, which is shedding thousands of posts, of being "the epitome of rapacious capitalism".

Mr Kleinfeld, pictured at the weekend under the caption "The Ruinator", earned €3.3m in 2005 and his management board €28m, but consultants recommended the 30% hikes - approved by the supervisory board - to bring remuneration closer to that in other Dax-30 companies.

The board's decision was greeted by Ms Merkel's spokesman, politicians and union leaders as a first, but insufficient, step. Siemens also agreed to consider rehiring BenQ employees.

Mr Kleinfeld hit back at accusations Siemens had got rid of the loss-making mobile unit knowing it would be insolvent. "We find BenQ's behaviour reprehensible and will help all we can," he said. "Any declaration that we had casually assumed BenQ Mobile's bankruptcy in Germany is a monstrous calumny."

David Gow in Brussels
Tuesday October 3, 2006
The Guardian

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