Siemens focuses on cost cuts to combat gloomy economy

With China's economy growing at its slowest pace in 13 years in 2012, the euro zone in recession and recovery in the United States still cautious, companies have curbed investment in new machinery and software.

"We do not expect the global economy to provide any tailwinds," chief executive Peter Loescher told thousands of shareholders at an annual meeting on Wednesday.

The engineering group, which makes products ranging from fast trains and gas turbines to hearing aids, reported a 3 percent fall in new orders to 19.1 billion euros ($25.4 billion) for its financial first quarter.

Weakness in China weighed on orders for drive technology and industrial automation, and the company said demand in its home market was also on the decline.

Loescher, at the helm for almost six years, has been criticised for being too slow to react to a downturn in the global economy and is now struggling to get the company back on track to compete with rivals.

He put on the back burner a plan to increase annual sales by about a third to 100 billion euros and late last year launched a massive push to save 6 billion euros over two years.

Ingo Speich, a portfolio manager at Union Investment, which holds about 6.5 million Siemens shares according to Reuters data, said cost cuts were not enough.

"Investors expect management to

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