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SIEMENS MEDICAL SYSTEMS RESTRUCTURING WILL CREATE FIVE GROUPS

This article was originally published in The Gray Sheet

Executive Summary

SIEMENS MEDICAL SYSTEMS RESTRUCTURING WILL CREATE FIVE GROUPS of the firm's hospital-based businesses. Each of the groups will contain the manufacturing, research and development, sales, and service operations for a specific product area. Siemens believes it "can add value" for customers "by more effectively bringing resources together," Siemens Medical Systems President and CEO Robert MacKinnon said in a press release announcing the reorganization. During the first phase of the reorganization, effective April 1, the Electromedical Group and the Ultrasound Group were established. The Electromedical Group is comprised of three previous operations: Danvers, Massachusetts-based Siemens Medical Electronics, which is the R&D, manufacturing, and worldwide marketing headquarters for Siemens' patient monitoring systems business; Piscataway, New Jersey-based Siemens Medical Systems' Patient Care Systems Division, a sales and service organization for patient monitoring products; and the Schaumberg, Illinois- based Elema-Schonander Life Support Systems Division, which markets and services ventilator and respiratory products. The Electromedical Group is headquartered in Danvers and directed by Vice President Alan Olhoeft, formerly Siemens Medical Electronics' chief operating officer. Siemens says that some downsizing will be associated with the consolidation, but that it will occur primarily through early retirement and attrition. The Ultrasound Group is the new name for Siemens Quantum, which is Siemens' consolidated ultrasound business. In mid-1992, Siemens overhauled the organizational structure of its ultrasound- related activities, bringing together manufacturing and R&D operations and sales and service headquarters in Issaquah, Washington ("The Gray Sheet" June 29, 1992, p. 7). Lothar Koob, formerly president and chief executive officer of Siemens Quantum, has been named vice president of the Ultrasound Group, which employs 700 people worldwide. Implementation of Phase II of the restructuring, which the firm expects to occur by the end of September, will bring into operation three additional Siemens Medical Systems groups. Siemens Medical Systems expects that Hoffman Estates, Illinois-based Siemens Gammasonics and its attendant sales and marketing organizations, also based in Hoffman Estates, will form a nuclear medicine group. Siemens Gammasonics currently employs between 800 and 900 people who are involved in R&D, manufacturing and administration. Siemens Medical Laboratories, Siemens' Concord, California- based linear accelerator business, is expected to be merged with its sales and marketing arm, currently located in Iselin, New Jersey, to form a radiation therapy products group. The remaining diagnostic imaging systems divisions of Siemens will form a fifth group, which may be known as the Medical Engineering Group. Siemens Medical Systems subsidiaries with products that are not solely targeted at hospitals will continue to operate outside the group structure. The businesses include: Siemens Hearing Instruments; Siemens Infusion Systems; Siemens Pacesetter; the Pelton & Crane Company, a dental business; and Burdick Corporation, which markets diagnostic products such as electrocardiograms and stress tests. Siemens Pacesetter, however, is undergoing a management change. Former Siemens Pacesetter President and Chief Operating Officer Brian Mann has been named chief scientist. The firm says that it is not actively seeking to fill the president or chief operating officer posts. Chairman and CEO Guenter Jaensch is overseeing day-to-day operations at Siemens Pacesetter. In addition, Vice President of Manufacturing David Morley is adding the title of vice president of operations. Barry Forwand, who was director of northeastern regional operations, has been named vice president of North American sales.

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