ABB outlines new strategy

09/13/2005


Zurich, SwitzerlandABB ’s new mid-term targets for 2005-2009 include a strategy that emphasizes improved business execution and a broader approach to value creation, the company announced last week. Growth, operating margin, use of capital, and cash generation, in particular, will be emphasized. The move will eliminate a layer of management and replace two core divisions with their respective five business areas. In addition, a new function at the executive committee level is being introduced to integrate the regional organization more strongly.

ABB is looking forward to sustainable and profitable growth, noted Fred Kindle, company president and CEO. “The targets and actions we are announcing,” he said, “are designed to build on our strength and secure our competitive success over the next five years and beyond.”

The new group targets reflect the company’s continuing focus on revenue growth and operational profitability as measured by earnings before interest and taxes. “This is an evolution of our strategy, not a revolution,” continued Kindle. “We remain focused on our core power and automation businesses.”

The new organizational structure will dissolve Power Technologies and Automation Technologies; their five business areas will become new divisions as of Jan. 1, 2006. The divisions are: Power Products, Power Systems, Automation Products, Process Automation, and Robotics. As a result, membership of ABB’s Executive Committee will change to include representatives from each of the new divisions. Dinesh Paliwal, currently head of the Automation Technologies division, becomes president of Global Markets and Technologies, while continuing his roles as U.S. country manager and North America regional manager.

For other ABB news related to structure and organization, see:

—Control Engineering Daily News Desk
Jeanine Katzel, senior editor, jkatzel@reedbusiness.com





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