NEW YORK -- The head of Siemens AG's U.S. business said he expects profit and revenue at the unit to rise about 15% this year, a pace that again could put the U.S. ahead of Germany as the engineering giant's biggest market by sales.
"We will be the largest entity that Siemens has," said George Nolen, chief executive of Siemens's U.S. subsidiary. Last year the company had sales of $18.25 billion (€13.62 billion) in the U.S. The company doesn't disclose the profit of its U.S. subsidiary.
Munich-based Siemens recently has taken a more aggressive approach toward the U.S. market. During a restructuring phase a few years ago, management shuttered or sold many unprofitable units. Now, with its home German market in a sustained decline, the U.S. has become Siemens's primary source of growth.
Last year the U.S. accounted for about 18% of Siemens's €75 billion in revenue. A few years ago, the U.S. was Siemens's biggest market, but a decline of more than 30% in the value of the U.S. dollar against the euro has reduced the contribution from the U.S. business in recent years. Even with the weak dollar, however, Mr. Nolen said he expects the U.S. to overtake Germany in the near term.
Mr. Nolen said he saw particular growth potential in government contracts, an area the company long neglected in the U.S. In Siemens's core infrastructure businesses -- such as medical equipment, building technologies, communications and power -- government contracts account for up to 20% of the overall U.S. market for infrastructure services and Mr. Nolen said his goal was to raise the company's share from its current 15% of Siemens's total U.S. sales.
Siemens has scored some recent successes in that regard, including a contract awarded last week to provide maintenance for most of the U.S. Transportation Security Administration's security screening equipment at 450 commercial airports. The deal's initial value is $47 million, but it could be more lucrative if the government exercises four one-year extension options.
Mr. Nolen said that for Siemens's future, winning the U.S. government's confidence to carry out a task essential to the nation's security was more important than the money. "We showed that we were the only ones who could rally these services," he said.
Mr. Nolen said the company's medical division was driving the company's U.S. growth. Its automation and drives business, which makes equipment and software for factories, also was doing well, he said.
Growth should come from the company's automotive division, which supplies components for General Motors Corp. and DaimlerChrysler AG among others, Mr. Nolen said. The business has become a strong participant in the U.S. car-parts industry with sales of $2.5 billion and is on the lookout for acquisitions, he said.
Siemens's fixed-line telecommunications division still is struggling, but Mr. Nolen said he was hopeful that new technologies, such as Internet telephony, would help it recover.
