German Industry Goes To See Uncle Putin

Wolf Richter's picture

Wolf Richter

President Barak Obama went to Belgium – a trip planned long ago but repurposed since the Crimean debacle – to meet with European leaders, commemorate the 100th anniversary of World War I, draw iffy parallels between then and now, and announce that more sanctions against Russia were being concocted and would soon be forthcoming, even if Russia made no additional moves on the Ukraine. The EU and the US must not sit on their hands as Russia pursues "the old way of doing things," he said. "That message would be heard not just in Europe but in Asia and the Americas, in Africa and the Middle East."

Russian President Vladimir Putin might have had a field day listening to the speech. But he was busy. He was at his official residence in Novo-Ogaryovo near Moscow, meeting with German industry tycoons, including Joe Kaeser, CEO of multinational engineering conglomerate Siemens. It wasn’t an emergency response to the current sanctions spiral but had been planned during their last meeting in October.

That meeting in October must have been Kaeser’s first meeting as CEO with Putin. Saturday night, July 27, 2013, Kaeser’s predecessor had been unceremoniously sacked. There was no immediate successor. Eventually, the board settled on Kaeser who was CFO at the time and has been with Siemens his entire working life. And he didn’t wait long to go see Uncle Putin.

Which shows how connected German industry and Putin are. Regular powwows are de rigueur.

So this time, Kaeser explained to Putin that Siemens, which had already invested €800 million in Russia, wanted to continue its “long-term involvement and localization strategy," a Siemens spokesman said. The company is of the opinion "that we should not let the conversation break off even if it is perhaps difficult politically at the moment." So it would continue to produce in Russia and help industrialize the country.

"We have built relations with Russia on the basis of long-term prospects and trust," Kaeser said, according to Russian news agency, Itar-Tass. When questioned about the possible consequences for Siemens due to its cooperation with Russia, given the sanctions, he said, “Siemens and I personally do not feel any pressure from the federal authorities,” which had known about the visit. “And certainly there has been no pressure when the chief executive of Germany’s leading company, cooperating with Russia for 160 years, comes to meet the Russian president.”

Kaeser also met with Gazprom CEO Alexei Miller, the Siemens spokesman confirmed. Despite any sanctions, both sides favored continuing with the strategic partnership agreement they'd inked in 2011. Gazprom is currently threatening to turn off the natural gas tap for the Ukraine. Unless the Ukraine pays up, it could run out of gas in two or three months.

Siemens, which employs more than 3,500 people in Russia, partners with state-owned Russian Railways – whose president Vladimir Yakunin is on the US sanctions blacklist – to provide high-speed trains. It’s involved in energy projects and numerous other activities in Russia. Siemens isn’t alone. About 6,200 German companies were trading with Russia. The bilateral trade volume was over €76 billion in 2013. German companies have invested €20 billion in Russia, and about 300,000 jobs in Germany depend on this economic relationship. A sanctions-spiral could have “unforeseen consequences,” said the president of the German Association of Exporters, Anton Börner. It would be tough for Germany but “life threatening” for Russia. And there’d be a political price to pay as well, he warned [read.... German Exporters Fire Warning Shot About Russia “Sanction-Spiral,” Banks At Risk].

The intricate and convoluted connections between Germany and Russia can exude a peculiar aroma. Gerhard Schröder, Chancellor from 1998 to 2005, had moved heaven and earth to push Germany into a deal on the Nord Stream sub-sea gas pipeline from Russia to Germany via the Baltic Sea. It was signed in October 2005, shortly before Angela Merkel kicked him out of office. Without waiting to take a breath, he joined Nord Stream AG as Chairman of the Board of Directors.

Gazprom owns a controlling 51% of Nord Stream. The remaining 49% are owned by German mega-utility E.on, German chemical company BASF, and Gasunie, a Dutch natural gas infrastructure company. With Schröder’s infinite foresight, the Nord Stream system vastly increased Germany’s dependence on Russian natural gas.

Gazprom Chairman Alexei Miller, whom our Siemens hero Kaeser also met while in Moscow, is Deputy Chairman of the Board of Nord Stream, right next to Putin’s buddy Schröder. It’s good to have Schröder on board to bring all these people together.

Chancellor Merkel is getting the message, apparently. She has been forceful and very vocal in condemning Putin's actions, but on Wednesday, she commented in Berlin that the West “has not reached a stage that implies the imposition of economic sanctions” on Russia. “And I hope we will be able to avoid it,” she said. “I am not interested in escalation. On the contrary, I am working on de-escalation of the situation.” Clearly, she forgot to check with President Obama recently.

Alas, it doesn’t take long for Russian humor to tear into the pronouncements of American politicians. Read.... Putin Playing Chess (Hilarious Picture, Russian Point of View)

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Ghordius's picture

"The intricate and convoluted connections between Germany and Russia can exude a peculiar aroma."

as usual, testosterone pit finds all things european quite smelly

what is wrong with those guys? those "convoluted connections" are business ties between two countries. you know, people that produce something and then trade with each other. some 6'000 joint ventures, among other things like cars and gas. and a lot of real investments in productive ventures

View From Germany's picture

"...people that produce something and then trade with each other..." - no chance here, I guess you lost Mr. Richter already with the first half of that sentence... :)

Philalethian's picture


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Coldfire's picture

Trade means peace. The USG is on the wrong side of history here.

kurt's picture

Hey! What's new. Everybody needs ovens.

August's picture

Now, about Breslau....

RECISION's picture

a trip planned long ago but repurposed since the Crimean debacle – to... draw iffy parallels between then and now.


Hahaha :-D

MeelionDollerBogus's picture

Let them be eat Sauerborscht!

ThisTimeIsDifferent's picture

As George Kennan said: the new cold war started with the NATO membership of Poland.

Once Mr. Richter is done with licking the arse of the FPI neocons he might get around to explaining the benefits of Turkish NATO membership:

walküre's picture

Russia could join NATO. Why the fuck not?

Freddie's picture

Why would they want to join?   Who in NATO has a real army besides the USA (destroyed by stupid wars), Poland and Germany?  Germany will only fight if invaded.  NATO is a paper tiger.  Russia has ICBMs plus very good anti aircraft, ship and tank missiles.   NATO can only fight against small countries.

Reptil's picture

hmmm I think there's been a shift of power from the nation states towards the corporations.
I'm not sure Germany is on board with the american interests. The dutch government (and those that tell it what to do) is. So is the Troika and the European Commission.
NATO as well. A vehicle for corporate, not so much national interests. Of course it's never been, but now less than before.
I'm not so sure it's a paper tiger. It's more shifty, more unpredictable.

walküre's picture

Exactly. So why worry when Poland joined the "paper tiger" NATO? What is Russia so afraid of? This is 21st century stuff. Cold war supposedly long behind us. Unless of course Russia never ended the Cold War and has had ulterior motives all along. See, Putin has been President for a very long time. It's a concern how much he has derailed the democratic process in Russia.

silvermail's picture

"Russia could join NATO. Why the fuck not?"

Because Russia does not enter into omitted clubs.

walküre's picture

Heil Putin!

Siemens did deals with Hitler. Why wouldn't they arrange themselves with Putin. Old is new, new is old.


Heil Putin!

(better be safe than sorry, better be early than gulaged)

silvermail's picture

Heil Merkel!

Siemens did deals with Hitler. Why wouldn't they arrange themselves with Merkel. Old is new, new is old.


Heil Merkel!

(better be safe than sorry, better be early than gulaged)

walküre's picture

When is the last time Merkel had the Bundeswehr march into a neighbouring country? Uhm, never!

Merkel is looking weak lately. She should take off her shirt and shake those useless tits in Putin's face!

That visual alone will scare those Russkies into submission!

0b1knob's picture

Bundeswehr in other countries:

1995- on Bosnia

1999- on Kosovo

2001 Macedonia

2003- on Afghanistan

Of course none of those are neighbouring countries and they didn't directly march there.

walküre's picture

As part of a larger coalition and under UN command or with the blessing of the UN. I know, the UN is largely irrelevant - until it is relevant. Say, what has Russia accomplished in terms of peacekeeping or nation building? Nevemind what the results were. A failed attempt is still better than no attempt at all or worse yet, a bombing back to the stone ages and leaving the country in shambles (Georgia).

bilejones's picture

They even sell in the US, so clearly no criminal is too vile.

basho's picture

so did ibm, ford, and the bushes. get off your f**ckin' pulpit and read some history

walküre's picture

Don't lecture me! This is all old crap. Are we in the 21st or the 20th century? I'm really not sure anymore.

Heil Putin!

silvermail's picture

Don't lecture me! This is all old crap. Are we in the 21st or the 20th century? I'm really not sure anymore.

Heil Merkel!

walküre's picture

stale, you're not original

ebworthen's picture

If Russia gets VW to license a plant in St. Petersburg and build the old V.W. Bug I'm moving there, and buying one in Rubles.

Fíréan's picture

Avtotor make part and  full cycle assembly of BMW, Cadillac and Chevrolet .Volkswagen and Ford are also located. and Chrysler under licence.

swiss chick's picture

I was wondering what would happen after Crimea, Germany, europe, I think its time to think of  an exit strategy!!!!!!

Sokhmate's picture

One fo the boards in the linked image is wrong.

Mad Muppet's picture

More proof that the US is a paper tiger, at least politically.

0b1knob's picture

US is not a paper tiger.

Choomboy is a big pussy however.

TahoeBilly2012's picture

Well let's see...our Dual Citizen International bankster cabal seems to have a small problem now don't they.  Jim Willie nailed this 5 years ago, Germany turning East. Desperation is setting in in the West.

agent default's picture

US is an insolvent tiger.  It fails even at the paper game.

walküre's picture

Backed by 8000 tons of gold until proven otherwise! More nukes than anyone, more Navy and AF than anyone. That's backing. Appreciated or not, that is reality.

In a world where everyone tends to behave like an asshole, you just want to be the best asshole or be the best friend of the best asshole.

Putin is not the best, sorry. Neither is Obama, but at least we know for sure Obama is not in charge.

Whatchamacallit's picture

"Backed by 8000 tons of gold" ... maybe, maybe not. As you said, until proven otherwise. However, until proven otherwise, the US cannot show diddledy-squat.

nowhereman's picture

Yeah, swing that big dick, why don'tcha

Mad Muppet's picture

Obama does what he's told to do...or what he's allowed to do. Thinking of him as the vice-dictator would be more correct. He has bosses, and does their bidding.

Mad Muppet's picture

damned repost...wish there were a delete button.


Mad Muppet's picture

obligatory computer confusion repost. Apologies.

Buck Johnson's picture

That picture is so correct in what is going on with the west and Putin.