ABB realigns organization around customers

Early response to new market demands, aimed at fuelling growth

    • First in its industry to organize fully around customers instead of products
    • New top management team appointed
    • New Ventures division created


Zurich, Switzerland, January 11, 2001 – ABB announced today it is transforming its worldwide enterprise around customer groups, aiming to boost growth by helping its customers become more successful in a business environment of accelerating globalization, deregulation, consolidation and eBusiness.

ABB replaces its current business segments with four customer segments serving end users, working closely with two product segments that also serve all external channel partners, and a financial services segment. This transformation, which will not incur any restructuring charges, will be implemented in most markets by mid-year 2001. ABB is the first in its industry to fully organize around customers rather than technologies.

The four customer segments – Utilities, Process Industries, Manufacturing and Consumer Industries, and Oil, Gas and Petrochemicals – will provide end users with faster and easier access to the full range of ABB’s products, services and solutions.

The two product segments – Power Technology Products and Automation Technology Products – will cover all generic product needs within the ABB Group. All products will be developed to fit into a common Industrial IT architecture. The product segments will also directly serve external channel partners, such as distributors, wholesalers, system integrators and OEMs (original equipment manufacturers).

The Financial Services segment continues to provide services and project support for ABB and for external customers.

The realignment was announced today by Jörgen Centerman, who took over as President and CEO on January 1. He also announced a new Executive Committee, effective as of January 15, formed to drive the next stage of ABB’s development. Six of the 11 Executive Committee members are new.

A new division, New Ventures Ltd., has been created to act as an incubator for new businesses. “New technologies continue to be a key driver of growth for us. Our R&D organization therefore remains critical. In addition, we’re setting up New Ventures Ltd. to identify, invest in and to accelerate the development of new business opportunities,” Centerman said.

“The new structure allows us to grow faster by more easily delivering value to our customers,” said Centerman. “We have a unique, three-way combination. First, our superior domain expertise – that’s our vast knowledge of our customers’ market environment, their business processes and success factors. Second, our world-class products and services. Third: collaborative commerce solutions that link the value chain all the way from suppliers through manufacturers to end users. This combination enables us to create comprehensive Industrial IT offerings, with all products and services conforming to a common architecture.”

At the annual press conference on February 13, ABB will, as announced earlier, present its 2000 financial results according to US Generally Accepted Accounting Principles (US GAAP). The results will be reported according to the segment structure in place before today’s announcement. Details on ABB’s strategy and how the new structure, together with US GAAP, provide greater transparency, will also be outlined on February 13. The plans to list ABB shares on a U.S. stock exchange remain on schedule.

Centerman said: “We are responding to a silent revolution in the market that is completely changing the business landscape. Faced with increasing complexity and speed – much of it driven by the Internet – our customers want clarity and simplicity. Our new structure will make us easier to do business with and fully reflects our new vision of creating value and fuelling growth by helping our customers become more competitive.”

He said the Internet has created new opportunities for companies to collaborate with and deliver value to their customers. “Instead of the mass marketing of the past, the Internet allows us to interact with our customers one-on-one and deliver customized information, products and services on a massive scale,” he said.

Highly flexible mass customization will require common business and management processes worldwide. That will be driven and supported by a new segment, represented on the Executive Committee, called Corporate Processes.

To make sure the new structure is implemented quickly worldwide, a function has been created on the Executive Committee called Corporate Transformation.

“Common business and management processes are essential in a truly customer-driven enterprise. This will over time provide a single interface between us and the customer and free up our people to focus on creating greater value for our customers,” Centerman said. “This is what our customers request today to capitalize on technology advances and rapidly changing markets in order to be more competitive. This, in turn, will fuel growth for ABB. At the same time, it creates value for our shareholders and for the communities and countries where we operate.”


The new Executive Committee
In addition to Jörgen Centerman, 49, as President and CEO, and Renato Fassbind, 45, the Chief Financial Officer, the new ABB Executive Committee has the following members:

DescriptionName (* indicates new member)
Process Industries: serving customers in industries such as pulp and paper, printing, mining and metals, cement, chemicals, petrochemicals, pharmaceuticals, and marine Dinesh Paliwal,* 43, Indian, presently head of ABB’s Pulp, Paper, Mining and Minerals business
Manufacturing and Consumer Industries: serving the full range of product manufacturers, as well as infrastructure customers in the telecommunications, airports, postal and distribution, and building sectorsJan Secher,* 43, Swedish, presently head of ABB’s Flexible Automation business
Utilities: serving electric, gas and water utilitiesRichard Siudek,* 54, American/British, presently head of ABB’s Power Transmission and Distribution businesses in the U.S.
Oil, Gas and Petrochemicals: serving the hydrocarbon industries, from resource recovery to processingGorm Gundersen, 56, Norwegian, presently head of the Oil, Gas and Petrochemicals segment
Automation Technology Products: a complete range of hardware and software products for automation and control, robotics, sensoring, metering, drives, motors, switches and accessories, and other low-voltage products and technologiesJouko Karvinen, 43, Finnish, presently head of ABB’s Automation Segment
Power Technology Products: a complete range of transformers, switchgears, apparatus, cables, as well as other products and technologies for high- and medium-voltage applicationsPeter Smits,* 49, German, presently head of ABB’s Distribution Transformer business
Financial Services: Insurance, structured finance, development and ownership of private infrastructure projects, and treasury services to ABB companiesJan Roxendal, 47, Swedish, presently head of the Financial Services segment
Corporate Processes: Implementation of common processes and groupwide infrastructure in areas such as quality control, supply chain management, eBusiness development, and information systemsAndrew Eriksson,* 54, Swiss/South African, presently head of ABB’s Medium-Voltage Equipment business
Corporate Transformation: Support senior management to implement the new customer-based organization worldwideEric Drewery,* 61,
British, presently head of ABB in the U.K.

The New Ventures business will be headed by Juho Lipsanen, 39, currently business controller for the Automation segment.

Sune Karlsson, 54, head of the previous Power Distribution and Power Transmission segments, will focus on large projects as well as developing business in key emerging markets, reporting directly to the CEO, as a Senior Corporate Officer.

Markus Bayegan, 56, continues as chief technology officer at the head of Group technology, research and development. Bayegan will continue to report directly to the CEO, as a Senior Corporate Officer. He takes on an additional new role, on the Board of Directors of the New Ventures division.

ABB (www.abb.com) serves manufacturing, process and consumer industries, utilities, the oil and gas sector and infrastructure markets, with 160,000 employees in more than 100 countries.

(End)

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