Top Manager in Discussion: Dale A. Martin, CEO of Siemens Zrt.
Dale A. Martin has been at the helm of Siemens Zrt. for just over a year. We spoke to him about the focus of his work, what he has achieved thus far and about the developments of the Hungarian Siemens Regional Company.
What particular strategic tasks were you assigned in this position?
My general responsibility naturally is to represent Siemens in Hungary. My specific task this year was the integration of two Siemens firms under the roof of the Regional Company. Siemens has been present in Hungary for more than 120 years and still plays an important role in the country’s modernisation. My personal goal is to maintain that longstanding tradition and to provide Siemens’ sustainable solutions to our Hungarian customers.
What does the integration involve?
The integration of the transformer factory was legally completed on 1 April 2011. Siemens Er?m?technika Kft. will also be legally integrated from 1 October. I am sure that Siemens Hungary will carry greater weight in Central and Eastern Europe by taking advantage of such synergies. The integration enables a more efficient market presence and increases the attractiveness of jobs at Siemens in Hungary.
What is the new structure like?
From the beginning of our new business year, i.e. from 1 October, our Regional Company will encompass four sectors: energy, industry, healthcare, and infrastructure and cities as the latest sector. One of the functions of Siemens’ new worldwide structure is to enable infrastructure and cities to get more of a boost. Cities and their infrastructure development are an important growth market for us and one in which Siemens offers solutions for environmentally aware modernisation with its leading, innovative technologies.
In which of the four sectors do you have production capacities in Hungary?
In three of them – and nearly all are present in Budapest, which is of course advantageous for the imminent integration. In the energy sector there are the two factories for distribution transformers that I have mentioned. Blades are produced in the latter factory, which are then mounted in large turbine nozzle rings, which we partially also produce here. Finally we also produce software in Hungary for the industrial and healthcare sectors.
How are your employees distributed between the individual areas?
In total we employ more than 2,000 people. Roughly a quarter of them work in the transformer factory and another quarter in the turbine blade factory. More than a quarter work in distribution for Hungary, together with central functions, and the ‘manpower hubs’. The remaining 500 employees work for our software companies PSE and Evosoft. The manpower hubs serve the international market, for example through the installation and commissioning of wind-power stations, which are among the many capabilities that I am proud of.
How is your balance of trade?
In our last business year Siemens Zrt. imported goods and services worth EUR 244 million. The largest import to Hungary recently was the turbine for the new E.ON power station in Göny?. During the same period we exported close to the same value, namely EUR 227 million, so exports and imports almost balanced each other out. In the past business year Siemens purchased goods and services in Hungary worth EUR 138 million, and Siemens Hungary aims to use even more products from Hungary. To that end in March we organised a so-called "global value sourcing day" in Budapest and were the first ‘Siemens’ country in Europe to do so. We invited both our current suppliers and potential partners to inform them about how they can qualify to be international suppliers to Siemens. We also outlined the opportunities that Siemens can offer Hungarian SMEs. The result has been impressive: just three months after that event the worldwide purchasing of Siemens in Hungary has increased substantially.
How much importance do you attach to the topic of corruption?
The international corruption cases at Siemens were settled at the end of 2008. In parallel with investigating cases from the past we introduced a very stringent monitoring system, the "compliance programme". Our worldwide payment system, for example, has a central clearing house. Today we cannot make any transfers that are not centrally checked. Siemens has placed great importance on creating a complex software structure that works internationally. However, we also deal on another level with corruption prevention worldwide. In consultation with the World Bank, Siemens AG gives USD 100 million to support projects increasing public awareness about transparency and the fight against corruption, including one at the Central European University in Budapest. As you can see, the topic of combating corruption is a complex one that we take seriously. Siemens is determined to be a leading company worldwide in terms of transparency and compliance. In spring our leadership practices gained international recognition. The international Hays Group studied 1,800 companies. Siemens attained fourth place worldwide, making it the most successful European company.
How does your business development look?
In terms of the private sector we hope that we will gain new orders thanks to the large automobile investments. We are also anticipating new projects in the fields of building automation, energy distribution and factory automation.
Have you already received concrete orders from automobile investors and what is the situation regarding orders from the public sector?
Yes, we have received concrete orders such as from Daimler for the new factory in Kecskemét. Alongside supplying products and systems we won a high-tech maintenance contract for the paint shop. In the case of orders from the public sector we face the same situation as everyone else. The challenge is financing but Hungary has the possibility of EU subsidies.
What about other infrastructure projects?
In June we managed to win an important project: we will supply safety devices to the stretch of track between Budapest-Kelenföld and Székesfehérvár belonging to the Pan-European Rail Corridor 5. Components for the project with a volume of more than EUR 50 million and completion date of 2013 will come from Budapest as well as the factories in Wallis and Braunschweig.
What about the healthcare and energy sectors?
In healthcare it is not yet possible to foresee clearly when the relevant tenders will be announced, but we are always ready to make use of our capabilities and are confident that we will be able to be involved in many projects. In terms of the energy sector our turnover is sure to decline somewhat after the successful completion of the significant Göny? project. The enthusiasm for investment in this sector is rather muted at present but we anticipate that there will be further large projects in Hungary.
How would you describe your approach?
Instead of a single slogan I would list three points: healthy development in a cooperative and ethical manner, whereby "ethical" includes being above reproach in terms of corruption. "Ethical" also refers to supplying products and services of proper quality on time. Naturally both our margin and market coverage should also be ethical. And finally it is also important to me that all that should take place in as environmentally friendly a way as possible.
What do you understand by "cooperatively" exactly?
I am committed to promoting closer cooperation both externally and internally. Externally it is a question of working together even more closely with our customers. Internally the individual areas and employees, such as the technical and commercial staff, should cooperate even better in the interests of our customers. By "cooperatively" I also mean the best possible integration of our companies. There are also some international aspects to that. I would like Siemens Zrt.’s cooperation with the cluster head office in Vienna for Central and Eastern Europe to be stepped up. Here I hope I can provide some advantages given that I was employed by Siemens Austria just under 20 years ago.
And what do you mean by "healthy development"?
What I mean is sustainable, continual growth. That includes doing my best to bring more capacities to Hungary to create additional interesting positions at Siemens Hungary requiring specialist skills. Global development of low-loss transformers, for example, is based in our transformer factory. Development is also very important when it comes to our software activities.
How satisfied are you with what you have achieved in the past year?
We have made good progress with integration. Of course there are still some areas where there is room for improvement. Our ‘customer days’ and our ‘net promoter score’ show that some improvements have been felt. Overall I am convinced that the orientation of Siemens Hungary as a growing, ethical company is the right one. Now we are hoping for a general upturn on the Hungarian market and that public sector demand will pick up.
For Dale A. Martin – born in 1957 in Pennsylvania, he studied in Vienna and Taiwan and is an American and Austrian citizen – Hungary is anything but terra incognita. From 1992 to 1995 he was CFO of the then Siemens Telefongyár Kft. (Siemens telephone factory) in Hungary. He went on to hold the position of CFO for Siemens Rt. and Magyar Kábelm?vek Rt. (Hungarian Cable Works), which then belonged to Siemens, until 1999. The fact that he belongs to the few expat business leaders who speak Hungarian along with world languages – he even speaks some Chinese – is not unrelated to the fact that three of his grandparents were Hungarian and that Martin has a Hungarian wife. He worked in the Far East in Taiwan, Hong Kong and Tokyo; his last position was CFO of Siemens in Slovakia.