Despite a report that emerged in the Financial Times Germany this fall that Siemens wanted out of the Nokia Siemens Networks venture, Nokia and Siemens sent a letter to their customers late last week that they are not abandoning their stake in the joint venture.
"We continue to support investment in the future of the company, both in terms of expenditure and potential acquisitions and partnerships," Siemens Chief Financial Officer Joe Kaeser and Nokia Chief Executive Olli-Pekka Kallasvuo said in a letter dated Dec. 9.
What's fueled ongoing questions around Nokia's and Siemens' commitment to the venture is that both companies reported large writedowns related to the joint venture. Nokia reported a $1.35 billion writedown of its stake in NSN, while Siemens' writedown totaled $2.39 billion.
An exit out of the venture should not be all that surprising given the venture's lackluster financial performance. After earnings slid to $4.1 billion in Q3 09, Rajeev Suri, who had replaced Simon Beresford-Wylie as NSN's CEO in September, decided that the company would have to cut 5,760 jobs as part of a broad restructuring and cost-cutting program. Along with cutting costs, Suri said late last month that the focus of the company should be on upping its marketshare.
For more:
- Reuters has this article
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