 But it's important to recognize that Siemens is one of the great technology companies in the world. And in Washington there's a lot of discussion about policy and energy. But if you're not going to discuss technology, markets, regulation, really capital formation, these serious aspects, you can't have a serious conversation about energy policy. And Siemens is a company which has been very active all over the world. It has a market capitalization in excess of $100 billion. It's been a leader in the energy space, but in a number of other spaces as well, including healthcare, industrial sector and infrastructure and city sector. So it is a great global company. It's also a great American company. It has over 60,000 employees in the United States. So it's a very, very substantial company. And Joe Kaiser knows this company and this business very well. He's been with the company for over 30 years. And he ran strategy. He was chief financial officer. He spent six years in California in San Jose and their operations there from 1994 to 2000. So he runs, this is a global executive who runs a global company in some of the most advanced technology in the world. And so for CSIS we couldn't be more pleased to have him here. And so I will turn it over to our ever dynamic Frank Verastro and Joe. I know you have some words. Welcome. Thank you. Joe, you can speak. Thank you very much. Thank you very much for this very nice introduction. I don't have to have that too often, but I'll be happy to come back on this one. And it's true I lived in the United States for six years, 1994 till 2000 in the middle of the Silicon Valley. And it was a really great experience. It was a time when the bubble was building up. No one knew it was a bubble, but then eventually when everyone knew about it, it was too late. And it was a great place to be at and since then I'm a big 49er fan. I know they're having a big season this time, but people said when I was in the Silicon Valley, every company which builds a new headquarter, you better sell the stock. And maybe this is also true in sports. So I don't know, we'll see how it's going to go. I don't know about the redskins. I might want to stay away from that topic. But still. Ladies and gentlemen, there are even more important matters than sports. And this is obviously also about energy infrastructure and how to develop an economy going forward. And this is something which our company has been doing, trying for more than 167 years. Energy infrastructure, industrial automation, as well as healthcare. And if it goes to energy, which is kind of the beginning of everything. If an economy starts existing, developing, this is about energy. That's the first thing which any country, any society needs to have. And even this great, mystic, wonderful Silicon Valley gets pretty dark at night if there is no energy. That's always important if you talk about digitalization, software and everything else. It is about energy and this is where everything starts. And I just do believe that this is a very important moment in the evolution of global economy. Because we do see those tectonic shifts if it comes to energy across the world. That's something I really would like to talk about today. I'll give you a sense of what the electrification company in the world sees in terms of energy dynamics and complexity. And how we keep up with them. You know, Siemens kind of has a tech quarter in Germany. And if it comes to energy policy in Germany, there's a lot to talk about and there's a lot to learn from. And in that process, I'll kind of extend the more global perspective on the energy bait here in the United States. And if it goes to Siemens, this is really doable. In 1847 Siemens was founded in Berlin at a garage. So the typical thing where you found the company becomes successful. And today we operate in 212 countries in the world. 212 countries in the world with more than 350,000 employees and more than 60,000 people in the United States. When I was in the Silicon Valley, already representing Siemens, and I introduced myself and said, well, I'm broke for Siemens. And I said, okay, and you could tell that no one had a clue about what this company was all about. And people sometimes told me, oh, you have that big matters factory? And I said, well, actually, not really. Not really, but we do this and this and this. And I said, oh, well, I know that one. So sometimes it's all about brand. But then again, if we talk B2B, engineers to engineers, experts to experts, you know, our brand is very well known all across the world. And if I have to explain, you know, what my company is all about, I used to say we're born in Germany, we have been raised in Europe, but now we are home in the global world. You really are. And this depth of global experience, particularly, but of course not limited to the energy sector, has taught us that the global economy can really change at incredible speed and have significant impact if the energy agenda is not going to be set right. It's not going to be set right. The international energy agencies predict that more than half of the global increase of energy is being needed to fuel tomorrow's world. And we should never forget if we complain about falling oil prices or things like that, energy is an important matter of developing a global society. The question then obviously is, the question really is, how do we generate this more energy? How do we generate it more efficiently? How do we generate it more sustainably? And last but not least, how do we generate it more affordably? More affordably. And all three need to come together at one point. And in Germany, there's even the second quarter, where I'm from, has been tackling that question for years. And the outcome was the so-called German Energiewende, the transition of energy, which basically started with eliminating the nuclear program. By 2022, we are going to be out of nuclear. That's what the plan is for today. And the plan was that we're going to shift to renewable energy, solar and wind. And this plan is really ambitious because we do want to have about 40 to 45 percent of our energy being generated by renewable energy. And that's quite an admirable goal. But also a goal that has now been Germany fighting for a very lonely revolution, as high natural gas prices in Germany lead to an increase in coal imports, since this energy transition began. As a result, a country that had all the ingredients to be a leader in the energy transition, is finding now itself left with a lot and with a massive issue on how to finance this energy going forward. It's a very, very costly bill. The energy, the renewable energy being produced in Germany in 2013, was reimbursed with 23 billion Euro cost. The price for that energy being produced with renewables at the Leipzig energy exchange was 3 billion. So 20 billion of subsidies per year guaranteed for 20 years. Makes it 400 billion Euro subsidy for an industrial country like no one else in the world. Situation today, as we can see it from obviously far away, is that the United States situation is much different indeed. There is no country, there is no country in the world which has a greater opportunity for affordable, reliable and sustainable energy generation than the United States. There's no one in the world which has all that ingredients for that what we can do. Now if I look at the United States, the way energy can be produced at what cost, at what price, this is going to be fostering the next revolution of industrialization in this country. That's what it's going to do. If you only get 50% right of what you can do, this is the most prosperous, the most effective economy in the world. How come? As I said energy is important and it's the start of everything else. And this energy agenda, if you really pull it through, the cheap gas, the industrial conditions, they will trigger a lot of companies to come to this country and build the next manufacturing. And the energy agenda, the re-industrialization of this country will make sure that a lot of people here in this country who not only love German cars but also can afford them again. So where do you think, where do you think those German cars are being built? In Stuttgart or in Munich or in Wolfsburg? No, they're going to be built in this country. And this is what the industrial revolution in this country is going to be all about. Now bringing jobs back from Mexico or China into the United States is about building on the opportunity this country can offer with reliable, affordable, and sustainable energy. That's the baseline. The next topic obviously is about infrastructure. That's very important. That has been the German issue all along with the energy agenda. They have had their opportunities but there was a lack of infrastructure and the power today still needs to be transported from place A to place B. There is no wireless transport of power. It's got to be transported from place A to place B and from what I hear, you know, about high noon today there will be a vote about the Keystone pipeline. This is also about infrastructure. This is about transporting energy to the place that it's needed. We like it a lot of course because we've been supporting it out of those reasons that infrastructure matters to transport energy from place A to place B. We have about 350 million order tickets in there so we really like it but not because of our economic advantage. We believe energy and infrastructure needs to come together to create an industrial footprint for this country to make it even better and even stronger as it is today already. There is a huge potential out of those areas and the United States is once again the place to be. Not just because of those beautiful areas from Alaska to Hawaii to Florida and everywhere else it is the place to be because an economy to prosper needs a good legal system, stable and reliable economic system but that's energy and infrastructure and everything else will come. It's almost like, you know, this movie, build it and it will come and to say it in a different way, build the infrastructure and it will come because everyone wants to take advantage of those areas and those things you have here in the States and there is actually a very interesting German proverb and that proverb says, aus einem Stein ist es schwer, Öl zu pressen. So the rough translation says, you can't squeeze oil out of a stone. Yes, you can. Yes, you can. And it seems that some proverbs weren't made to last. And German companies are surely taking notice and in 2014 alone, German investments in the United States will be at up to 65 billion US dollars, 65 billion alone in 2014 so you can definitely see, you know, it's worthwhile going that extra mile. It's worthwhile providing energy infrastructure at an affordable, sustainable and reliable place. This is everything what it takes to be successful and that's why we are here, not just since 2014 but more than 100 years in this country and we are continuing to invest in this economy. We just have announced that we are going to acquire Resurrent which I believe is the premium brand for oil and gas equipment based in Houston, Texas and this is gearing towards fortifying our business in North America. And we have been relocating our Siemens energy headquarters to Houston. It's the first time in Siemens history after 167 years that a German company-based managing board member is outside Germany. It's in Houston and that's where you better be. If you are going with gas, if you are going re-industrialization, this is the place to be. And sometimes I'm being asked why did you do that? Why did you do that? And even from high officials in my government who sometimes think this is, you know, I let them down because I moved their tech quarter out. This is not about letting anyone down in policy or in government. This is about going where our customers are. This is about going where innovation happens. How should I convince my customers that we have the world-largest and most efficient gas turbine? If my own country doesn't buy it, doesn't use it. How can I be innovative? If the customers I have in Germany, the utilities which got wiped out in their business model have other things to worry about than innovation. So I could go to Florida Light and Power. I go to utilities here because they are innovative. They are good in what they do. A company can only be as innovative as their customers are. So this is about innovation. It is about demand and those are the key factors for success. And that's what we do, what we've got to do because I have more to lose than an election. I have more to lose than an election. If you look at the natural gas prices here in the country, just hitting the $3 line if I'm informed correctly, that's a massive opportunity. It is a massive opportunity. The price of wind is at an all-time low, down 35%. The cost of solar is down 60% in 2011. And the internal forecasts show that energy demand and decentralized energy is going to double in the next year still up to 2030. And that distributed energy is going to be making up one-third, one-third of the United States economy. And that is really, really important. And you know, if we talk about keystone, if we talk about pipelines, if we talk about environmental and safety concerns, I do appreciate that those things do pose challenges to the United States. But I'm not here that didn't come to weigh in on those debates. This is a decision and a debate the American people have to make. And we're really prepared for any outcome as a company. But I do believe, I really do believe that infrastructure, transporting energy, making good conditions available for anyone in the industry, in this country is a massive enabler for the generations to come to be very, very successful. And that's, I believe, what is really important. And we can not only help in infrastructure and energy. We can also help to make that infrastructure and energy much more efficient. And this is about automation. And this is about what a digital age will bring in a modern industry, not in media, not in consumer, but in industrial world. And this new industrial revolution is called Industry 4.0. That's how we call it. In Germany, people call it Internet of Things. We call it Industry 4.0. This is about a leaner, a more efficient and a software-driven high-tech production. And that will transform the industry landscape also in power. And that's why we are investing in the United States and we continue to invest also in the years to come. We have invested 25 billion, 25 billion US dollars in the United States in the last 15 years. And this is only the beginning. This is only the beginning. Because we can automate and we can help in almost all parts of the value chain if it comes to energy, infrastructure, or industrial automation. And our experience in innovation, like everything that happens after the oil or the natural gas is extracted. How it's transported, how it's being converted to liquefied natural gas and how it's going to be connected across the supply chain of this world. And this is, ladies and gentlemen, this is what we can do. This is where Siemens Canon will have an impact on the future of this industry and the future of this country. We do believe, I do believe that the United States energy transformation is a once-in-a-lifetime moment. It is a once-in-a-lifetime moment. And I really invite every one of you to come over and see how we did it in Germany and do exactly the opposite. It was not the intent which went wrong. It was the execution which went wrong. The intent to step out of nuclear energy. I believe it's the right thing to do. This is not about the residual risk that some can blow up. I don't mean that. There is no tsunami in the river Rhine. There is no earthquake somewhere else in Germany. That's fine. It's not a residual risk, but it is a moral obligation for the human modern civilization that we do not leave 230 generations behind with a nuclear waste which is nowhere to go. That's the moral issue. That's the moral hazard on nuclear energy because we've got no clue, we've got no idea and no solution how to store the nuclear waste for the next 23,000 years. At least not store it safely. So that's the trickling in the end why I believe a human society has an obligation not to leave 23,000 years waste behind for the generations to come. So that was okay. And I truly do support that. But the way to do it is to be different from the generalized high-tech economy which is the most highly industrialized country in the world. And that was wrong and that's what we need to fix. And I really do urge you, don't go down that path. It could be devastating for the single biggest economy in the world, for the proudest country in the world which is only in the beginning for an even better world to come. With that, I thank you very much and I'm happy to take your questions. Excellent, Joe. Thank you so much. So let me say just for starters that I actually had the opportunity to meet and see Joe in operation down at the CERA conference this past March. And I was so taken with him because in addition to his ability to be a CEO and focus on the details of business operations he could also step back and talk about what this means in a global climate a changing atmosphere with technology and geopolitics and finances moving around so quickly. And he had the ability and the candor to move between those two worlds and I thought it would be a great opportunity to actually bring him here and you did not disappoint. Increasingly we need in Washington to see the perspective of other folks from outside of Washington. And with all the discussions that we're having with the EU and talking about sanctions is the global's marketplace. As we look at this energy revolution to keep in mind that this is an evolution it's an iteration of different changes that we've seen in the energy market but it's substantial and it's big and it's different and we need to take advantage of the opportunity at the same time that we manage economic performance and environmental stewardship and safety and you touched on all those points so that was absolutely terrific. For starters I think I'm going to borrow a bit from Robin's introduction so the fact that you're a truly global company you're in 200 countries Middle East, Asia, Latin America obviously Germany and Europe and now in the United States how do you plan and see the differences where you want your investment to go? You talked about governance in a legal system you talked about low cost energy but these are big ticket bets that you have to make on a daily basis so how do you go about that process? Well there are big ticket bets to make because obviously in those areas you're at like energy and infrastructure it takes a long time and I just came in from Boston last night but I did have investors conferences there are sell side people talking about Siemens they give a lot of unearthed advices how I should run the company and they said how can you possibly now acquire a restaurant when all prices go down and the cycle of oil and gas is going to come to an end and I said look I can because I'm not in for a quarter I'm in for the next generation of this company and I did take that job last year, just about a year ago not because of money not because of being a powerful CEO with some some power which is nothing but given for a period of time it was about that I want this company to be a better company for the next generation because this is what ownership culture is all about that's what we owe our next generation every owner of a company every owner of a small business who have gotten that business from his or her father has a very natural very natural desire to give it away in a better shape to the next generation and that's what we own to our people to our employees, that's what we own to our country that's just what makes the difference in the end and I call it ownership culture that's what I want my company to be act as if that was your own company and if I do it differently please act as if that was your own country and then all of a sudden politics moves to states, men and states, women because politics is about majority of votes for a limited period of time and states, men and states women do the right thing even though they lose the job everything which made Germany the most powerful country in Europe for the last 10 years is being based on chance to shredder's agenda 2010 he lost the job he didn't get reelected but he did the right things and I tell you something in 10 or 20 years from now when the history books are being written about who were great leaders in Germany there's not going to be something in there how often people have got reelected it's in there what people did for their country and that's why it is so important that you seek the dialogue together government industry leaders of companies to make their country and the society work and that's why we go out and talk and sometimes people say look why don't you just take care of your company rather than do big debates in Washington which you better go home and take care of your business but then who needs to let people know if not the ones who go around all places as you mentioned Middle East and elsewhere and we have been investing in this country here in the United States because we believe this is the place to be for the next generations there is no such thing out there as the biggest economy in the world right people who spend money privately and publicly and people who have got technology and have a very stable political system with hardly any geopolitical impact on the country and if sometimes you know boardrooms talk about strategy CEOs lay out their big strategy about things it's very often forgotten that there is also geopolitical aspects which play a role in strategy we have to put your resources to work and I'd rather have my 10 billion euro or yours dollars spend on acquisitions and on businesses in a country which is safe which knows how to defend itself which is inherently an innovative country and innovation is not always about technology of course it is about technology but innovation is also about the ability to stand up if you've fallen down stand up if you've fallen down try it again, better this time move on and in Europe today or Germany or Europe anywhere the greatest hit is the Silicon Valley people heard about digitalization internet of things, Google and Facebook and what have you and everyone wants to go to Silicon Valley take a flight to San Francisco drive down one on one south which is not exactly nice take a U-turn in San Jose and go up 280 and fly home and they said I've seen the Silicon Valley it's all great, we've got to do the same thing in Germany or in France or in Switzerland they should have taken Highway 1 up north would be much nicer than 280 but still they've seen nothing except that they try to copy something which you can't copy not about copying the Silicon Valley it's about understanding it and then we need to move and see what does it take in Germany if you've found a business and you fell, you need to go to the church you're going to be taken out of business for a lifetime your reputation is completely gone you can't go up in the football game anymore because that guy went bankrupt it's that guy by the way that guy someone else went bankrupt and it's over so innovation is a cultural thing not just technology it's about letting people fail in the best interest of what they've been trying to do and learn from it and move on there's a lot of stuff which needs to be considered and that's about the United States it's about culture standing up if you have fallen down and try better again and people talk a lot about this industrial revolution industry 4.0 internet of things and everyone says well, it's got to be Germany because Germany has an industrial base and it's all cool and the BMWs and the Mercedes and Siemens of course and others look who's got the biggest potential to revolutionize the industrial world it's the United States it's the United States not because of a high industrial base which in a way is it's about something else it's about software it is about semiconductor it is about the re-industrialization which is being triggered by energy and infrastructure and if you folks get that ball together this is a recipe which no one else has in the whole world no one has because digitalization is about software and about semiconductors first and foremost and it's applying them to the industrial world that's what it is nothing more and nothing less it is about the internet and the internet is not a internet and the internet is very simple the internet is very, very simple the internet does something in industrial revolution in this industry 4.0 which it has done since the beginning it cuts out the weak points the weak elements of the value chain elements of the value chain which do not add any value to anything are being cut out that's what the internet is all about and this is also going to be applied to energy and infrastructure so as I said earlier if you folks only get 50% right of what you can do this really is the country which will show the way on industrialization infrastructure and energy but then make sure that the right decisions are being made so for us we've gone from a period the last 40 years in this country where the situation of scarcity energy was a liability for us the laws that we enact in the 70s certainly I'm not sure that they need a major overhaul or throw the baby out with the bathwater but they need to be revisited everything from exports to Jones Act to taxation and incentives we're also running into because of the scale and the scope of this revolution these above ground issues that you talked to so the reliability public attitudes that we're talking about when you discuss electricity to a lot of consumers they want to buy the wall that has the outlets because that's where they get their electricity from that works when they plug in but there's so much more than that that goes on behind the scenes and you were talking about the football game the Monday night football game that the sealers just played and the notion that the power outage what the impact of that means and it brings it home you got the economics right you got the business plan right but if the infrastructure isn't put in place and maintained and the policy is not right you don't get the outcome you get the suboptimal outcomes that's very true, that's why I was going on about energy and infrastructure being tied together even the German energy agenda after all with all the subsidy and things like that it's the biggest issue today is that they don't bring because of a lack of the grid because I mean Germany is not much bigger than Ohio in terms of square miles but then again in the north we have wind in the south there is solar many people in Germany say it makes as much sense to do solar energy in Germany like growing pineapples in Alaska which is a truth to it I'm not against solar but you need to have a lot of sun in order to be somehow somehow meaningful in energy but then again we've got it now and it doesn't make any sense to complain and complain and complain we need to find solutions to it and the solution is we need to connect the dots we need to connect the wind energy in the north with the solar energy in the south because just rumors has it that if the sun doesn't shine there is a lot of wind right and if the sun shines usually the weather is nice then obviously the wind is somewhat limited so we need to bring that together and the issue in Germany too is that we do not have a natural correlation between supply and demand which is different in other countries if you go to the south when the sun shines and it gets really hot what do you need right so you have a natural correlation between supply and demand because the sun makes the climate hot so you need to cool the air and you have a natural correlation so it always depends I'm not against solar please don't get me wrong I'm not against wind absolutely not I'm not against renewable energy all I'm saying is we need to connect the dots together so that it makes sense so it's about infrastructure the more we go into renewables the more we move from monosourcing of energy to multi-sourcing of energy so what do I mean monosourcing is this big huge power plant 1100 megawatts or 1500 megawatts then you have got this thick of wires to go out from the power station to a substation and then the energy gets distributed to your house, to the curb to industrial applications and of course the old world in a new world with more and more renewable energies and the freedom of decentralized energy you've got multi-sourcing you've got power from solar you've got power from wind you've got power from biomass you've got power from nuclear energy and everything goes into the grid but solar only if the sun is shining wind only if the wind is blowing so someone needs to manage that grid because everything goes in the same time it makes boom and there is no football game because there is no power so that's why this is so important to connect the dots between energy generation and distribution it's very important if you have only one right not the other doesn't do any good so I guess that's why it's so important to have if you talk energy policy in a country it's also about how to bring it from the source to where demand happens very important and everything else will fall in place over time so we have a big infrastructure project going on here at CSIS we call it delivering the goods because you can't get the resources to the places you need it without that middle piece I'm going to pick up on two things you said one is that you're into automation and digitalization standardization is you start moving to multiple fuels and integrating them into assistance is really important but also finding fuel sources that can be peak and base load like natural gas is a perfect fuel so can you talk a little bit about the benefits of natural gas and why in Houston for example you talked about how Siemens is going to invest 9 billion euros in the United States and by God you've done it I said that right yeah you did say that okay fine you said that and you followed through more important sometimes even deliver yeah I remember I said okay now this is the place to be and we will show and someone was asking me what you mean I said we are going to invest about 9 billion in the next 12 to 15 months and it was funny when I went to the audience to the big room where I did the speech I went by the restaurant and I said you got a billion 9 billion at the time because it is a real premium brand and the way to go into the unconventional oil and gas was always important to us not because we are going to the drilling and the fracking and pumping and that because this is about electrifying the oil and gas industry today we have a lot of hydraulics technologies and things like that at some point in time they are not going to be efficient anymore and we need to electrify the sub-secret and this type of stuff and that's why we did it and that's why we believe this has been a very good acquisition in the long term we have been here for the quarter or the year and look in the United States all the roads lead to gas gas is clean it's very reliable it's here far away from any geopolitical crisis and it will stay here and it can be exported or not it is a decision the United States people can make in time they can change it if they need it and and that's why we have been investing into the natural gas here I don't know where that's coming from it seems it comes closer it stopped it stopped now so I mean natural gas is clean it's reliable and it can be changed the world because it's all over the place and here's the technology to make some meaningful out of it and I think one of your comments about how you used to have a sales force here that actually sold things but now you've moved to manufacturing processes close to the source and what advantage that means to that's always something I believe one needs to consider if you produce chocolate bars it doesn't really matter where you produce debuts you know you do a nice marketing thing with a few ads and then you sell milk or something or whatever or Hirschle and then that's it no one cares where those chocolate bars being made if you go into businesses like energy or infrastructure even healthcare you go with societal matters semi-public type of taxpayer sort of money so you better also do some to the society which you want to make money from and that's why manufacturing engineering needs to be localized in the old days it was about say well we build a manufacturing plant and then that's it this was the old word of localizing today's world of localizing is manufacturing plant is clear but you also do engineering you know local R&D that's today's world to most world is also localizing manufacturing it's very important there's got to be a local decision maker you've got the CEO right in the front row which I expect him to be Alex Spiegel our CEO here in the United States he's got to have decision power if he goes to Rix or anyone you know in New Orleans Gas he needs to say okay deal handshake there's not about 5000 pages of legal documents there's about say you and I and if you don't have this you're not meeting the CEOs of your customers you meet the purchasing people and that's the last place you want to be at so that's why localizing you know of decision power is so important and we continue to do that we've got 60,000 people we continue to build jobs here in the States and you bring technology to where we are good at and that's what we're going to do you know honestly if a company which does not provide value to society shouldn't exist are you truly to believe that if you don't provide value to society you shouldn't exist as a company because what for and leave it better than the way you found it what for and that's very important and if you want to provide value to society you better be where society is and of course we are not we are not in for for non-profit that's a fact but it's about giving and taking and that's why we are here that's why we continue to be here that's why we continue to build up our resources in this beautiful country I want to raise the discussion at 30,000 foot level so you're a advocate of global trade and of free trade agreements like TTIP can you talk about why that's so important and bridging the gap between what you said about globalization globalization in essence is about redistribution of wealth mostly between developed economies to developing economies that's what globalization is about it's like you have a bottle here which is full got a bottle here which is empty and there is a connector in between there is a connector there is a plug globalization means you remove this plug and then the full bottle becomes half and the empty bottle becomes also half that's the redistribution of wealth by globalization so someone wins and someone loses and the question is what do the losers do to prevent that from happening what do the losers do to fill it up again developed economies are the losers per definition so what is it that we can fill it up with that's about innovation and global trade share what we are good at and that's why we need to have a global free trade so and look what we can do together in the developed world to help the developing world to be successful without us losing our life standards our living standards and that's why we need to work together in those areas and this is not about the United States and Europe against China not absolutely not this is about having informing a union which provides safe secure economic trade because the evil is elsewhere those are the ones who do not want to live in peace and offer freedom to their society so if I being asked about TTIP a lot in Europe say well how can we do that the United States gets so powerful not just as a military but also as an economic union with shell gas and everything and googles and what have you so how can we potentially be a partner which is on the same footage we just need to be good that's all and it's without the United States there would not be a unified Germany which has happened to have the 25 years anniversary of the fall of the war in Berlin next weekend Saturday Sunday I was there and it was 25 years ago unfortunately I was in Malaysia at the time working for the company and if you see all that it would not have been possible without the United States France United UK do you think those two countries wanted to have a strong on Germany? maybe not but the difference was the United States that was the difference and this is something also to think about if you talk about trade and the safe economic environment it is much more about trade it is about creating an economic zone of people and societies which share the same values and share the same need to be successful by innovation and that's why I believe this is a real good thing not just whether there's chicken up being enriched with chloride or not, who the hell cares this is about something else something much bigger and if you see how the world develops there are 40 geopolitical crises being named today by the United Nations 4-0 so someone needs to do something about it and form a unified and a safe place to do business and to do trade and that would Europe and the United States would be all about if combined together into such a unit both really methods so is that the way this world is heading where you've got international good actors, bad actors different groups, emerging economies new players, old players and new roles when you look at our institutions a lot of which are post World War II they don't include a lot of the new players that are coming into the fore so is it bilateral and multilateral trade agreements and other alliances that's stitching of the the world together I think so I think that that nations need to become stronger by working together to defend and defeat the ones who don't want to play by the rules right I mean sanctions is one thing and it's very important but then if you have an economic power formed you know this will be the regulation to deal with all the others so therefore I think this is much more than just trading a little bit without taxes and income and income duties it's more about creating a powerful economic world which shares the same rules and values to go after the ones who don't want to play by it I believe this is another way above and beyond military power to help the world to become a better world because if you see those geopolitical crisis or some of them developing think about for example the whole topic of the radical Islamic state which we see happening in Syria and Iraq I'm not sure whether the western world is really prepared with its usual way of going after things right, it's the asymmetric in the future so we need to form something different it is also about economic power you know which is much more efficient I guess than having a few aircraft carriers or jets to be sent and do a few things and then you fly back home and then what it forms again and so that's why I believe we need to think about what will the modern the future way of crisis will be looking like and how can we defend it is that still with troops and spend blood? I don't know and why always the United States honestly I mean it's great and good enough that your country makes this difference in the world but the question is can you always do that you've got a lot on your plate too and so the question is really shouldn't there be a different power economic power which helps the others understand that without joining the rules they're going to be stuck they have a problem they're going to be economically isolated you talked a lot about sustainability and corporate responsibility and leaving the world better than you found it so when you look at the beginnings of shapings for Paris in 2015 and the climate announcement between the United States and China how do you view that from your perspective? well if it worked it would be a big step forward as far as I understand there is a 10% in China includes also nuclear power counting as non CO2 the devil is always in the details yeah well but still so I think it's a good start and everyone who's been to China recently knows exactly it's a good start but then again executing is the other matter and we'll see how it goes and there's a lot about still coal fired power plants where we can do a lot to help to reduce CO2 emissions that brings it back to gas I mean gas is so clean so efficient gas turbines today have about 61, 62% efficiency which is huge and so therefore there's a lot of technology out there which we know how to do it to help the climate become a better shape again okay and we like to have this be participatory before I turn this over to the audience I have one other question and this goes back to a previous incarnation so at one point in Siemens you were the global strategy officer that looked out and looked at the big trends with the next big issue that we haven't really recognized yet well since we have recognized it we probably don't know that's Robin's line I mean what we have what I believe we have not fully understood yet what will the what will the growing penetration of digitalization to the industrial world this is not yet clear we've seen what it does to the society if you look at the Google's the Facebook's the Twitter's and the likes in terms of communication the question is what will it do what will it do to the industrial world and the reason I'm mentioning that is the world is used to territorial legislation the world is used to tangible things it's easy if you look at the internet, the digitalization it's an exterritorial matter can be anywhere in the world if you're Singapore or anywhere you can talk to anyone anywhere at any time so all of a sudden you're putting the whole matter a notch above geographical boundaries and then the question is how do we deal with it what exactly does that mean that's a real topic because think about information security think about technology ownership IPR intellectual property think about data who owns the data who is allowed to do stuff with data and how much and how about data being stored somewhere your data about use it my data is yours what exactly does that mean and this definitely will require the world to step up to provide the regulation for the industrial framework for such a thing and I guess that's something which we need to look at and always understand how do we connect from the virtual world to the real world how does that go need rules of the road here because I mean electric power will never be supplied over the internet but maybe it can be bought over the internet so how do you deal with that and a million other things this is something we need to understand because that's different paradigm shift and that will definitely change the world a lot excellent okay speaking about reliability we try to get people in and out on time especially when we have guests like Joe so let me do this we'll take three questions from the audience and the simple rules here are identify yourself and your affiliation wait for the microphone and then to the extent that you can pose your question in the form of a question which is always easier to address okay we'll take one on this side one all the way in the backs here and then we'll come back here hi Chris Knight with Argus Media so there are some similarities between EPA's Clean Power Plan and the energy issues in Germany you described do you think that the Clean Power Plan would put the country on the wrong track like you described or do they strike the right balance which power plan the Clean Power Plan is the 111D where we're facing up the use of coal but if you want to just we'll take that one go ahead Sarah Leandra Bernstein, Ria Novosti I'd like to ask just with EU and Russian relations so tense right now how that impacts your outlook on the European Union's energy calculus and then also how your company has been directly affected by these tier 3 sanctions okay and we had a third question right here hi my name is Alice Weidinger I had a question I just first wanted to commend you for your interest in and Siemens work in renewable energy but my question was if you look at the IEA and the UN and the problems they're dealing with now a lot more attention is being put on climate change as opposed to problems with nuclear waste so my question is why is Siemens focusing on their renewable programs replacing nuclear programs as opposed to forms of energy with much greater negative externalities like coal, oil and gas okay okay sure let me maybe start with the last one I mean we've got we talk about energy generation we've got the full plate of what we can do we have steam steam turbines so we can do clean coal we have high efficient gas turbines we are the world leader offshore wind we are far the biggest install base so the thing is we can do everything which is necessary to be doing but in each and any of those areas we can help to bring the CO2 emission down if it went our way we would have love to have all clean energy affordable, reliable and cost effective so it would be perfectly great but then the world is in different places in Indonesia which got nothing but coal so what are they going to do burn the coal to generate electricity and have their society develop and prosper so it's a very important task to help them install clean coal rather than have the current CO2 emission standards so that's why it's not about doing clean energy only so we can help in each and any of the areas in the United States 40% of its energy demand supplied by coal fired power plants if that switches to gas it's a massive reduction of CO2 emission massive reduction so we can bring the CO2 emissions down also in conventional energy so why don't we continue on nuclear first of all there is hardly any market in the European environment secondly we believe the issue of unsolved waste treatment is just a moral issue we should not continue be doing we actually look into how we can help you know finding solutions that the worst nuclear waste which has 23,000 years to be safe again reduced to a small period of time so we've got every single weekend on the map so it's not that we would only go for oil and gas you can also oil and gas you know do much more efficient in terms of CO2 so if everyone brings down CO2 emission in their constituencies it's going to be a big progress so then Russia I mean some of you everyone knows I was visiting President Putin in February right after the Crimea issue it was a big debate why to do it and what and the reason why I did go was because there was a meeting schedule since November and I promised to be there and I went and said because I wanted to help them industrialize the country that's the only one thing they would get really out of trouble and I said look and I'm here because I promised I'm very concerned about what you folks are doing very concerned about he was telling me all sorts of stuff which I think doesn't matter in the context here and I told him I said look you know you have friends in the west if you come to terms but if that doesn't stop we are going to be the first one to adhere to the sections very clear in the forefront of helping the global world to stay together in a unified goal to help him come to terms how is the company affected he honestly doesn't matter he really doesn't matter we've seen some slump in orders as you can imagine but then you know we share a common goal and that's what we do that's why it matters it doesn't matter whether business is down 20% or 30 we do what we believe is right as everyone else does in the western world as simple as that you can debate that it was wise to go there and see him fine I admit that but on the other hand we stick to our commitments and now it's his turn to stick to his commitments and unless he doesn't do it then we'll know what to do it's very simple there's also a matter of staying clear about what we have agreed upon together in the western world then company's interest doesn't matter anymore there's a greater good to serve if it comes to that type of environment how will Europe be affected by that that's a concern because what you can see is the sentiment in the European economy has been deteriorating massively and the reason is simple it is just too close to Europe it is an hours 10 minutes flight from Frankfurt or anywhere from Europe it's supposed to be so tiny anywhere in Europe to Ukraine and it makes a difference that you have an hour 10 flight or 10 hours flight and so there is a lot of negative impact about the combination of East and Ukrainian environment but then we'll get over it now we need to serve the matter in the interest of the civilized world that's what we do so the first one is a bit so the first one it's more US focused on the clean power rule which is a regulatory proposal that EPA has put out it requires the states to reduce emissions and gives them a variety of pathways that might be a little bit down in the weeds for discussion I can comment on whether it's good or bad or anything else I believe it's the right thing to do but then again it's important to have a combination between affordable reliable and sustainable we've got to find the recipe to make all three of them work if it's only sustainable and doesn't serve the other two purposes it's just a little problem it doesn't help the society if it's only cheap it pollutes the planet it doesn't do us any good either so that's why often we talk about the energy mix and as I said if you still have 40% capacity of coal fire plants to develop and deliver power there is a lot we can do and then again decentralized energy with wind we've been building the biggest wind parks here in the United States we we installed two big manufacturing plants for wind energy in Kansas and in Iowa kind of in the middle of nowhere we've created a lot of jobs we feel good about what we're doing so it always depends on the energy mix peak load space load but the mix matters and that's what we need to go after Joe you've been unbelievably generous with your time and I want to thank Eric and Camille for facilitating this and making it happen I would just like to say that so my initial impression that you could talk to the detail but also take the step back of being a statesman if you would has totally been born out today and reinforced and we would invite you back anytime that you want to come through and if you all join me in thanking Joe for taking us back