ABB plans to restructure transformer business

ABB reports that it’s planning to restructure its North American transformer business unit. The company adds these efforts are part of its global effort to realign its transformer business to increase profitability and customer service.

Several North American operations will be affected by the changes. The Guelph, ON, Canada-based facility will be closed. The St. Louis, MO, facility will expand to serve a large portion of the repair business from Guelph. The Jefferson City, MO, operation will expand to serve a portion of the lower range of the liquid substation product line currently manufactured in the South Boston, VA, facility.

“The decision to close the Guelph operation comes as the conclusion to many years of effort to return the operation to profitability. Over the past 12 months, in particular, the Canadian Auto Workers (CAW), the management team, and our customers have all worked to turn Guelph around. Unfortunately, the business outlook is that Guelph will only continue to lose money,” says Gerry Schepers, senior VP for ABB Transformers. “We sincerely appreciate everyone’s effort and support.”

The Guelph facility is expected to lose $15 million (Canadian) in 2005. The business was temporarily closed in mid-2004 and then reopened based on an agreement to pursue all possible options for creating a viable situation. CAW represents approximately 200 of the transformer plant’s more than 300 employees. The union’s contract expires on January 31, 2006. The Guelph plant, which serves the North American market, produces small power transformers, and repairs large power transformers.

“The restructuring plan in North America emphasizes the strategy to improve performance throughout ABB transformer operations. These actions, including the expansions in St. Louis and Jefferson City are clear examples of this emphasis,” adds Schepers.

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