Phil Totaro, Joel Saxum and Allen Hall discuss the latest Reuters news article regarding Siemens Gamesa shuttering sales offices and factories. What are the upcoming risks to Siemens Gamesa, and does the company have the financial resources to weather the upcoming headwinds?



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News Flash 10-16-23



Allen Hall: I'm Allen Hall, president of Weather Guard Lightning Tech, and I'm here with the founder and CEO of Intelstor, Phil Totaro, and the Chief Commercial Officer of Weather Guard Lightning Tech, Joel Saxum. And this is your News Flash.



Big Reuters report from Siemens Energy where they're considering shutting down some of the Siemens Gamesa factories and sales offices as part of a review aimed at reducing losses at the company. There's been a number of discussions about this across the internet over the last couple of days. The plants have not been defined yet.



The sales offices have not been defined yet as what ones would likely go. However, it does put a lot of countries on end as there are a number of plants across the world that Siemens Gamesa has invested a good amount of time and money into. And although no final decisions have been made yet, we feel like and the news is from different sources that by early November or mid November, they are going to have this plant identified. And Phi, this is causing a little bit of upset in the marketplace in terms of the stock, but also in terms of the wind energy community as to where Siemens Energy and Siemens Gamesa is headed. There's a lot of moving parts at the moment. How fast does Siemens Gamesa and Siemens Energy need to move to right this ship?



Philip Totaro: Fairly fast. And the reality of this is there's a few different implications. First is that they probably want to be able to announce something in November at their Capital Markets Day event so watch out for that. The second aspect of this is, okay, obviously there's a significant amount of investment in Denmark and in Spain.



And unfortunately, those are likely to potentially both or, there's been talk in the past about potentially Spain might get shut down or outsourced a lot more than the resources that they have in Denmark, which was the legacy Siemens. And the legacy of the company, everything that's core to Siemens in Germany and Denmark is something I think they want to keep hold of.



There are companies in Asia, that includes Chinese wind turbine OEMs and now Indian wind turbine OEMs like Adani Group and others, who are trying to get a bigger foothold in the West. Does this present an opportunity for them to dive in to a factory that's already got overhead cranes, it's already got molds, it's already got other things?



Allen Hall: Now, Joel, with the closing of sales offices, that does not bode well for the future, right? You always want to have sales in action for next four or five years. That's when you'd be booking orders out that far. If Siemens Gamesa limits their sales staff, doesn't that just hurt their future tremendously? It seems like that's a very short sighted approach to a longer term problem.



Why the move on the sales side?



Joel Saxum: In the article it states they operate 79 sites, including sales and service offices, R& D centers, as well as 15 factories to produce blades and nacelles. But a sales office is one thing that you could save a little bit of capital on, to be honest with you, Allen.