ABB evolves for growth

As part of its targets for the five-year period from 2005 to 2009, ABB is to restructure its organisation. One layer of management is being removed, with the current two core divisions — power and automation — to be replaced by their respective five business areas of power products, power systems, automation products, process automation, and robotics.

From 1 January 2006, the power products, power systems and automation products divisions will be headquartered in Zurich, Switzerland, with the process automation division based in Norwalk, Connecticut in the US. Emphasising the global reach of the group, the robotics division (formerly manufacturing automation) will be based in Shanghai, China.

Veli-Matti Reinikkala continues as head of process automation, while the current head of the automation technologies division, Dinesh Paliwal, takes on the new role of president of global markets and technology.

‘This is an evolution of our strategy, not a revolution,’ says Fred Kindle, ABB’s president and CEO. ‘We remain focused on our core power and automation businesses. The strategy involves a balanced approach to value creation by widening our focus beyond growth to higher margins, greater return on capital and cash generation.’

Michel Demaré, GFO, says: ‘Our new targets for net income and cash flow are intended to put more emphasis on our bottom line and out ability to convert profit into cash.’