Former Siemens CEO takes new role as adviser to Saudi crown prince

Kleinfeld's appointment signals that Saudi Arabia is serious about moving away from its oil-based economy and towards other industries.
Sunday 08/07/2018
Saudi Crown Prince Mohammed bin Salman bin Abdulaziz (R) and Klaus Kleinfeld sign documents in Riyadh. (SPA)
New mission. Saudi Crown Prince Mohammed bin Salman bin Abdulaziz (R) and Klaus Kleinfeld sign documents in Riyadh. (SPA)

DUBAI - Saudi Arabia appointed former Siemens CEO Klaus Kleinfeld as an adviser to Saudi Crown Prince Mohammed bin Salman bin Abdulaziz, demonstrating the country’s commitment to diversifying its economy and pressing ahead with reforms.

The appointment of Kleinfeld, a German, was an uncommon move because foreigners rarely have sensitive positions in the kingdom but signals to investors that Saudi Arabia is serious about moving away from its oil-based economy towards industries such as mining, advanced manufacturing and tourism.

Kleinfeld “will take over wider responsibilities to enhance the economic, technological and financial development of Saudi Arabia,” an official Saudi statement says.

Kleinfeld, a prominent business leader who has a business degree from Georg August University in Goettingen and a doctorate in management from the University of Wurzburg, has a record of success in the industry.

Kleinfeld began working for Siemens in 1987 and was promoted to head the company’s projects division within a few years. In 1998, Kleinfeld restructured the loss-making medical appliances segment and it began to turn a profit. After that, he helped loss-making US subsidiary Siemens Corporation return to positive net cash flow.

After being appointed head of Siemens Group, Kleinfeld initiated a series of reforms, including eliminating the telecommunications division. In 2007, Kleinfeld moved to US aluminium company Alcoa as chief operating officer and became the firm’s CEO in May 2008. He served as chief executive officer of metal engineering specialist Arconic, an Alcoa spinoff.

Kleinfeld will leave his position as CEO of the NEOM megaproject to take on his role advising the Saudi crown prince but will retain a position as a NEOM board member.

Kleinfeld was appointed CEO of NEOM last October but had begun groundwork the project in June 2017. Kleinfeld put together a team of project developers and, with the NEOM board, came up with a strategy to develop NEOM.

Kleinfeld strengthened NEOM’s ties with leading investors, scientists, universities, developers, media and other potential partners.

Kleinfeld is to take up his post of adviser to Crown Prince Mohammed on August 1. Nadhmi al-Nasr, who led the development end of Neom Bay, the project’s initial stage, will take over Kleinfeld’s position at NEOM, the Saudi statement said.

Nasr, a member of NEOM’s founding board, has more than 30 years’ experience with Saudi Aramco and served as interim president for the King Abdullah University of Science and Technology. Nasr will be responsible for carrying out strategic development and business plans for NEOM’s core economic sectors.

The shake-up comes as Crown Prince Mohammed presses ahead with his Vision 2030 economic and social reform programme designed to wean the Saudi economy off its reliance on oil exports by selling billions of dollars of state assets and developing new industries — from tourism to technology.

Saudi Arabia’s Public Investment Fund is behind several large real estate development projects, including an entertainment city on the edge of Riyadh and another tourism project on the Red Sea.

The NEOM project, backed by more than $500 billion from the Public Investment Fund and local and international investors, is regarded as a centrepiece of planned Saudi projects. It will cover more than 26,500 — ten times the size of Luxembourg — and operate as a magnet for international investors, with a focus on industries such as energy and water, biotechnology, food, advanced manufacturing and tourism, officials said.