It’s prosaic for capitalists and traumatic for real people: 3,000 jobs look set to go in Germany as Taiwan’s BenQ pulls the plug on the German arm of what was once known as ‘Siemens Mobile’. In June last year, BenQ acquired Siemens Mobile for nothing, bar its debt (click here).

At the time, BenQ chairman and ceo KY Lee commented: "with the acquisition of Siemens’s mobile phones business, we are rapidly approaching our goal to become one of the world’s leading players in the mobile phone industry. Our expansion strategy will be strongly supported by this deal, as we can rely on a global organisation with excellent employees, a well-established blue-chip customer base in the mobile business and a strong brand with high impact.”

Few believed that statement at the time but it now enters the realm of the fairy tale. On Thursday of last week, the truth became clear. “To stem unsustainable losses at BenQ's mobile operations, BenQ Corporation's board of directors convened today and resolved to discontinue capital injection into BenQ Mobile GmbH & Co OHG, its German mobile phone subsidiary. The subsidiary is considering filing for insolvency protection”.

It added: “BenQ Mobile GmbH & Co OHG's operations in Germany, including Munich, Bocholt and Kamp-Lintfort may be affected. Other subsidiaries in Brazil and other locations are reviewing their financial position. BenQ will continue its branded mobile business in selected markets leveraging its existing R&D and manufacturing operations in Asia.”

"Since October 2005, we have committed and invested an inordinate amount of capital and resources into our German mobile phone subsidiary. We have worked alongside our German colleagues from the beginning and were able to achieve quite a number of milestones," expressed KY Lee, BenQ Corporation Chairman. "Despite the progress achieved in reducing cost and expenses, widening losses have made this very painful decision unavoidable," continued Mr. Lee.

The Berlin/Bonn government of Angela Merkel is unlikely to let up to 5,000 jobs go down the toilet without a struggle. Yet since Siemens has already sold its German mobile phone workforce down the river, there seems little logic in suggesting that BenQ should push it back up the other way, against the tide.

BenQ still speaks of “the company's unwavering commitment to its branded business and focus on providing integrated manufacturing services.” That does not translate into German, it seems.

In a quick straw poll, two of the four of my friends who had heard of Siemens Mobile said ‘Real Madrid’. The other two said ‘good mobiles’. Four out of ten. And who had heard of BenQ? One friend thought it was a DIY store (B&Q?); the rest had never heard of it. Apart from one who said ‘Real Madrid’. For the record, I asked his name. He said, “Real Madrid”.
Jim Chalmers