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ABB reorganises its divisions for growth

29 November, 2009

ABB is reorganising its automation divisions to align their activities more closely with those of its customers. From the start of 2010, the current Automation Products and Robotics divisions will be regrouped into two new divisions – Discrete Automation and Motion, and Low Voltage Products. The Process Automation division will remain unchanged except for the addition of the instrumentation business from the Automation Products division.

ABB says that these changes will enable it to tap growth opportunities in services, expand its presence in discrete manufacturing, and respond better to the growing demand for energy-efficient systems.

The reorganisation has prompted speculation that cash-rich ABB is planning one or more acquisitions. CEO Joe Hogan (above) agrees that the changes would make it easier to integrate acquisitions, but says that the reorganisation has been done primarily to improve market access and to generate more income from services.

“ABB’s automation businesses, with their focus on productivity and energy efficiency, have tremendous scope for growth,” he explains. “We have strengthened the market approach by grouping together businesses with similar customers, technologies and service models, which will help us accelerate the development of solutions for our customers.”

The new Discrete Automation and Motion division includes products and systems – such as motors, drives, robotics and PLCs – targeted at discrete manufacturing and providing motion in plants. It also supplies the rail sector, and the solar and wind power industries. It sells mainly to OEMs, system integrators and directly to end-users. The division employs about 19,000 people and generated revenues equivalent to around $6.6bn in 2008.

Ulrich Spiesshofer (above), currently responsible for Corporate Development on the Executive Committee, will run the Discrete Automation and Motion division. Spiesshofer, who joined ABB in 2005, has led strategic growth initiatives such as its service activities, and has played a key role in managing its $2bn cost reduction programme.

The new Low Voltage Products division consists of businesses mainly producing LV electrical equipment for wholesalers, OEMs and system integrators. The division employs around 19,000 people and had revenues in 2008 equivalent to around $4.8bn.

Tom Sjökvist (above), currently responsible for Automation Products, will become head of the new Low Voltage Products division. Sjökvist has led ABB’s LV business for many years and has driven its Automation Products division to new levels of profitability.

Veli-Matti Reinikkala remains head of the Process Automation division. The addition of ABB’s instrumentation business will strengthen the division’s process automation platform. The division employs about 29,500 people and generated revenues worth $8.4bn in 2008.

Anders Jonsson, currently responsible for the Robotics division, will in future have an Executive Committee role with responsibility for continuing implementing ABB’s cost reduction programme and its “Global Footprint” programme, which aligns ABB’s resources with its growth opportunities. ABB says Jonsson has repositioned the robotics business for long-term profitable growth.

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