Siemens Gamesa Chief Executive Jochen Eickholt expressed his profound shock over the extent of quality problems discovered in the components of their onshore wind turbines. In a press conference held earlier today, Eickholt revealed that an ongoing review of the Siemens Gamesa fleet, initiated earlier this year, had revealed more issues with turbine components than originally anticipated. Specifically, he pointed out problems with bearings, rotor blades, and what he referred to as “legacy turbines.”
Eickholt stated, “The result of the current review will be much worse than even I would have thought possible. This is a disappointing, a bitter setback. The quality problems go well beyond what had been known hitherto, in particular in onshore.” He further emphasized that these quality problems extended beyond known failure rates and included “new forms” of failures, noting that the issues were associated not only with specific components but also with suppliers.
Addressing the challenges ahead, Eickholt acknowledged that resolving these problems would be time-consuming and come at a significant cost. He estimated the cost to exceed €1 billion, spread out over multiple years.
During an analysts call conducted on the same morning, Siemens Energy CEO Christian Bruch echoed Eickholt's sentiments, stating that the setback was “more severe than I thought possible.” Bruch anticipates that Siemens Gamesa will experience higher losses this year and will take longer to achieve a satisfactory level of profitability.
Bruch also emphasized the need for urgent remediation of the corporate culture within Siemens Gamesa. He admitted that too many issues had been ignored or overlooked, asserting, “We will use the fact that we will soon own 100% of Siemens Gamesa to drive this change so that it will become a reliable contributor to Siemens Energy's results.”
In response to the recent developments, both CEOs held press conferences and investor calls. The news broke on Thursday night that Siemens Energy had withdrawn profit guidance for Siemens Gamesa, as the troubled manufacturer's onshore unit is expected to incur additional costs of over €1 billion associated with the identified quality problems.
