Kaeser expected to restore calm at Siemens Siemens Kremlinologists looking for the moment when chief executive Peter Loescher's star began to wane, and another began its ascendancy, point to a press conference in Berlin in November. On that occasion, Siemens" chief executive unveiled a €6bn cost-cutting plan accompanied by an ambitious and ultimately unsuccessful target to raise profit margins by 2.5 percentage points by 2014. Joe Kaeser, chief financial officer, who is on Wednesday expected to be anointed as Siemens" new chief executive following a meeting of the supervisory board, caused a minor furore by arriving at the Berlin press event minus his trademark moustache. When asked by the Financial Times about the makeover, he said that if the capital markets wished to interpret the move as a sign of a new beginning at Siemens, this was in the company's best interests. Mr Kaeser's enjoyment of the limelight, straight talking and grasp of granular detail have long caused him to be seen as a possible Siemens chief executive-in-waiting. His opportunity came late on Saturday when Siemens released a statement saying it would "decide on the early departure" of the chief executive and replace Mr Loescher with a member of the current management board. Mr Kaeser's chief task, if he is confirmed, will be to restore calm after a calamitous few days in which Siemens" management and supervisory board fought a bitter power struggle in the harsh glare of the media. Mr Loescher opposed Thursday's profit warning announcement because he considered it premature but was overruled by other members of the board, people close to the company said. Parts of the German media therefore interpreted the unusually brief ad hoc statement that caused Siemens shares to plunge as bordering on a coup. Whatever the explanation, the bad blood needs to be quickly removed if the German engineering company is to refocus on outperforming competitors such as General Electric. Following a spate of profit warnings, setting and meeting achievable earnings goals will also be important. "The most important thing is for calm to be restored," said Daniela Bergdolt of the DSW shareholder association, echoing similar comments made this week by chancellor Angela Merkel's spokesman. One big unknown remains the future of Gerhard Cromme, Siemens" chairman. Mr Cromme was forced to step down as chairman of ThyssenKrupp in March after the company made huge losses on overseas steel projects under his watch. The abrupt and unseemly manner of Mr Loescher's departure has cast Mr Cromme in a poor light as it is the job of any supervisory board chairman to manage a chief executive transition smoothly. Analysts welcomed news of Mr Kaeser's appointment as they consider him a safe pair of hands whose 33 years of experience at Siemens give him an unrivalled insight into a complex industrial conglomerate, whose products range from express trains to gas turbines and industrial automation equipment. Ben Uglow at Morgan Stanley told clients: "We believe that his skill set, ie a breadth and knowledge of the operational details at Siemens, as well as a genuine desire to create value for shareholders, is relatively unique." Mr Kaeser was one of the few senior executives to survive Siemens" massive 2007 corruption scandal. He is considered a shrewd and highly adept political operator with a deep network of contacts at the company. Although he cannot fully disassociate himself from the problems under Mr Loescher's tenure, Mr Kaeser was privately critical of Siemens" deteriorating profit margins and slow pace of cost-cutting, people close to him said. Profitable growth and improving return on capital employed is therefore likely to be a key priority, but he will not be able to cure Siemens" problems overnight. The Munich-based company is facing headwinds from the global economy and increased competition; its industrial automation business is exposed to a slowdown in Chinese demand and its profitable gas turbines are finding fewer buyers in Europe as US shale gas has displaced cheap supplies of coal to Europe. Mr Loescher's goal to boost revenues to €100bn by an unspecified time in the future (compared with €78.3bn last year) will doubtless be put on the backburner as Mr Kaeser is thought not to have been convinced of its rationale. The future of Siemens" infrastructure and cities division - a collection of low-margin businesses bundled together during Mr Loescher's tenure - also looks in doubt as analysts say the chief financial officer was never convinced by the strategy. But Siemens" habit of booking costly charges related to businesses such as solar, German express trains and offshore wind farm grid connections will take time and careful management to overcome. "Project execution must be brought under control," Ingo-Martin Schachel at Commerzbank told clients, adding that improving project risk management should be "very high" on Mr Kaeser's agenda. Although Mr Kaeser is seen as a friend of the capital markets, he must operate within the constraints of any Siemens chief executive by retaining the support of workers, whose representatives make up half of Siemens" supervisory board. That means there is not much scope to deepen Siemens" cost-cutting programme about which workers are already very angry because it will trigger thousands of job cuts. Similarly, Siemens" strategy to divest non-core units such as its stake in Nokia Siemens Networks and its postal and parcel sorting unit will probably continue but analysts do not expect a significant ramping up of these efforts. "Over time, we would like to see the portfolio narrowing further but we would expect Siemens to focus on the completion of the already announced disposals first," said Andreas Willi at JPMorgan. Instead, Mr Kaeser is widely expected to offer investors a palliative by announcing a share buyback in coming weeks - a trick he also pulled off a year ago when Siemens announced a €3bn share buyback programme. Mr Willi said that given the limited near-term earnings upside potential Siemens "may use its strong balance sheet for a moderate buyback" or to distribute the proceeds of the NSN disposal.