Friday, July 30, 2010

This really bodes well for Harmony users. Power Generation has the largest installed base of Harmony. The R&D group has transferred over and I expect we will see renewed development activity and an extended life cycle for Harmony. ABB has done a great job the last couple years with their evolution products that enable customers to add 800xA on to their Harmony systems. Users have the best of both worlds; they can continue with their Harmony systems and invest in new technology at their own pace. No other DCS vendor protects their customer's investment better, or offers more choices, than ABB. Keep up the great work!

Sunday, July 25, 2010

It seems that the hostile acquisition of the Harmony System by the ABB Power Generation Group. What does this mean? Is it the end of Harmony?

Friday, June 4, 2010

It seems as though ABB has pulled the trigger slightly on their road to acquisition. Press releases shows that they have gobbled up K-TEK of Prairieville, Louisiana.

Wednesday, May 12, 2010

Fred Kindle joined ABB in Sept. 2004 and took over as President and CEO in January 2005. He left: February 2008. Theis was reported:

Fred Kindle managed a period of strong organic growth and profit. After his exit, the ABB board kept expressing their thanks to him for "driving the company to the extraordinary level of performance over the last three years".

2010-04-22
ABB Power System Division Head - Peter Leupp: "Our EBIT this quarter was negative and considerably below last year’s level. Execution problems resulting in cost over-runs were a major cause".

2010-04-22
ABB CEO - Joe Hogan: "We have seen some shocking cases of poor execution, project management and customer relationship management which have cost us dearly to fix and have seriously damaged customer confidence. This in itself is an additional hidden cost of doing business, and it’s the job of the entire organization to address."

Now the question is:
How could it happen the last two years, turning from "extraordinary level of performance" to "poor execution"?

Thursday, February 11, 2010

ABB has a lot of internal changes brewing. Company is cutting costs and people are afraid of losing jobs. As economy is improving, ABB is constantly changing its execution. If you have a senior management supporter, you can feel secure as they will make sure your job is saved. Just count how many directors, BU Managers and VPs are there in different ABB groups. I have even seen one VP doing programming demos and this person didn't have anyone reporting to him. If you are one of the lower ranks, you have to wonder what kind of culture this promotes.

Friday, October 16, 2009

More reductions in force at ABB in OH and PA. More to come by end of October. Areas of ABB told to plan 5%,10% and 20% reduction. Appears ABB is reducing older employees in-lieu of keeping newly hired 1 to 3 year people. One might think its an age thing

Monday, October 12, 2009

Interesting news from JimPinto's eNews No. 273 - 12 October 2009

For sale:

• Rockwell - whether they like it or not.
• Invensys - whether they like it or not. Their pension planwas under funded, and was a poison-pill for potential buyers.
• Honeywell - the Process Systems Division is likely to be divested by a hungry-for-growth-and-glory CEO Dave Cote.

• ABB - Joe Hogan (ex-GE) would find GE's Automation businesstoo small. He is more likely to be focused on Rockwell. ABB has the cash, and Joe Hogan needs to make a move. A bigger ABB would create a global alternative to Siemens.
• Siemens, the largest industrial company, has never been ableto make a successful acquisition. They'll be in the bidding.
• Schneider - one of the winners during this decade. They couldwant GE's software business to add to Citect. They may also bein the market for DCS player. Invensys would be a good fit and make Schneider a world player in software and Process Control.

(Click)- GE will emerge as next big automation player

Friday, September 18, 2009

It would be most interesting to see if ABB will purchase Allen-Bradley/Rockwell. Afterall, their acquisition of Taylor and then Bailey was so successful.

ABB has the ultimate "not invented here" syndrome. They ran Taylor into the ground and did the same with Bailey. The development groups that created Net90 and Infi90 are long gone. So, you might as well shuffle it off to India and give it a decent burial.

I have gone to the 800XA training classes and used the system. Hardware is not bad, but the software is truly an abomination. It is a collection of software tools, loosely tied together in no really coherent fashion. It is obvious that this was designed by a committe and one which had different, competing elements. You have no person's vision, just the loose intellectual change that fell out of several committemen's pockets.

The tools all look and feel differently. No single environment (the call them views) can do everything. Switching from blocks to structured text, you might as well learn a new system. The engineering cost of implement this system is frightening.

Thursday, September 3, 2009 - RE: ABB looking at Invensys:

You must be joking! Invensys are useless, and ABB don't need a dead-duck system. They are too Smart to consider suicide. Been there done that.

Tuesday, August 25, 2009

A reorg in N.America continues. Who will win? Wichita Falls? Or MX? Or...?

Tuesday, August 25, 2009

ABB in talks with Invensys? Keep an eye out for familiar Invensys faces in the Zurich airport.

Tuesday, July 14, 2009

ABB are doing well, with a big backlog and positive out look we are on the up. When the dust settles, ABB will take their pick from the carcasses of the American companies. One team, one ABB.

Tuesday, May 19, 2009

I see this stuff about moving engineering off to India all the time, no offence meant to India - I work with engineers here all the time and find it works well. Time and time again you see delay after delay because out of frustrating lengthy rework, because it's just an engineering sausage factory trying to develop complex systems. This just does not work when trying to bring new plants online with system changes.

Friday, May 1, 2009

Good luck with moving new product development to India. Plan on delays, bugs, excuses, and product that doesn't remotely meet user needs when you're all done. The net cost will be many times the perceived saving.

Tuesday, April 28, 2009

ABB moving engineering from Wickliffe, Ohio to either India or Sweden, for the legacy Harmony system and some of the more system dependant projects that were centered around their Wickliffe Oh. operations. Expecting a reduction in force in Ohio within the next year, based on info received yesterday from engineering management.

Tuesday, April 28, 2009

Well, Harmony development will move to India within the next 1 to 2 years...the slow death of the Bailey legacy system.

Thursday, April 23, 2009

ABB is still looking way to cut cost or trim overhead. They are not in a hurry, with a strong backlog from last year. The acquisition of Honeywell will be a good ideal in term of Automation business, especially in the petrochemical industry.

Thursday, April 16, 2009

Can anyone help me understand what is going on at ABB: things seem to be a disaster at Emerson and Rockwell - these guys are making hundred of their staff redundant. But ABB seems to be years behind in terms of cutting costs versus them. How come?

Saturday, January 10, 2009

This is all very interesting. I have a job interview for a senior with ABB in the Middle East in the next couple of days and was wondering if anyone had any thoughts on the company's state in the region. I have had the company opinion but it would be very useful to hear an outsiders view. Thanks.

Thursday, November 20, 2008 - Re: Previous blog - Honeywell and ABB cash:

ABB = 8.6b in cash, 2.6b in debt
HON = 2.3b in cash, 9.2b in debt

Honeywell has some cash but hardly enough to call themselves cash rich. Honeywell also has alot of debt, which makes them a little vulnerable at the moment. ABB on the other hand, is in extremely good position right now to ride out a downturn and perhaps take out a few smaller players (or maybe even a big one).

Wednesday, November 19, 2008

An integrator's perspective on ABB software - in a nutshell it has a long way to go.

When I roll out something with say Freelance, I am hampered by annoying bugs and a very limited environment for the HMI. I can make considerably better HMI images using RSView, Wonderware and even Citect (I say "even" because until Schneider Automation re-writes the innards of Citect to get rid of dBASE IV I will still not like it - just try supporting Citect with Office 2007!). I don't even have much freedom with screen resolution or multiple screens. This is all "Big Iron DCS" mentality where you get what you're given and shouldn't complain. To make matters worse, technical support is in Germany and has that "get lost" attitude.

Friday, November 14, 2008

Does anyone know how much ABB have in cash? Does anyone know how much Honeywell have? I'm a Honeyweller and I'm informed that Honeywell is cash rich, but not sure if its just spin?

Wednesday, November 5, 2008

Why WonderWare? Because ABB's software is hardly world leading. To the point that even within ABB, some are looking for alternatives or actively exploring/creating alternatives.

Saturday, November 1, 2008

Wonderware wouldn't be any use to ABB. They are pushing their 800xA system pretty hard, and I don't see where Wonderware would fit into the picture. If ABB makes an acquisition in the automation business, it would make sense to buy somebody who could add to their installed hardware base. They would use the expanded base to sell more applications and services. Thats why Rockwell looks so attractive...

Tuesday, October 28, 2008

What about WonderWare and Invensys Rail Group? They'd be quite additive to the ABB portfolio, wouldn't they?

Friday, October 24, 2008

Yes ABB could buy Invensys. But Invensys' market share has been falling for sometime and they are not really a big player in the automation market place - yes Triconex is the jewel, but not much else. Honeywell on the other have a large installed base and is taking market share.

Friday, October 24, 2008

ABB could acquire Invensys for less than $1.7 billion (US) right now, or a controlling interest for half that.

Tuesday, October 21, 2008 - Re: protest that ABB cannot acquire Honeywell:

I did NOT mean that ABB would acquire ALL of Honeywell - just the Process Systems Division.

Monday, October 20, 2008 - the possibility that ABB may acquire Honeywell:

Hey dude, that's more than a mouthful to digest. Even at today's artificially low trading price the market cap. for HON is $22B. When GE tried to do this in 2000 the value was pegged at $45B + debt. We all know ABB is sitting on $8B in cash & equivalents but man that kind of deal would wipe that out amount quickly and some. Also, the availability of cash to finance such a purchase is just not out there right now and probably won't be for some time. Still think the ROK purchase would be more of a synergy to their current power and automation offerings.

Monday, October 6, 2008

Ref - ABB's two blockbuster deals - weblog Sunday Oct. 5, 2008:

Rumour mill here in Honeywell is that it could be us - lots of synergies and a significant better bet than Rockwell.

Sunday, October 5, 2008

ABB currently seem top heavy organization as well. With their stock tumbling into high 10's from 30's is a sure sign of shake up to come. Few years ago ABB started giving stock options to their employees. Most of those stock options have been hurt by fall in stock price tremendously into high 10's. On top of that ABB has got so many VP's and GM's if you count their numbers. They seem to have VP's and GM's that manager as little as $25 to $50 MUSD of business with large organization below them. If ABB wants their stock price to rise again they will have to figure out how to reduce top heavy management VP's, GM's and directors....

Sunday, October 5, 2008

ABB has at least two M&A deals that are somewhat in limbo given the current turmoil in the credit markets. Expect both to close before the end of the year, however, and one will be a blockbuster! (Rockwell?)

Wednesday, October 1, 2008

ABB feels emboldened by the fact that they have had couple of good years in business. They seem to have embarked on a SAP roll-out and looking to cut major costs as a result of it's implementation. Their DCS business is losing ground agaist Rockwell Automation. We have seen existing DCS customers moving to Rockwell. The business cycle comes and goes like it did in 90's. If they buy Rockwell, it seems ABB is repeating its grave mistakes of 90's into this decade, just against different competitors....

Monday, July 28, 2008

I agree with your thoughts that this news and the confirming statement by the interim CEO on Squakbox confirms that ABB is looking for an automation acquisition. Somehow though, I feel that the recently announced plan by GE to spin-off it's consumer & industrial division will factor into things somehow. Perhaps if nothing else GE may also put the GEFanuc component of the enterprise solutions division on the table.

There could also be a race to move on Rockwell. If GE finds a buyer for the appliance division they'll be cash rich (est. $4-6B from that sale), industrially focused and perhaps on the hunt for a major purchase to grow their organic base.

Monday, July 28, 2008

JimPinto.com eNews 28 July 08 includes analysis of ABB/Rockwell possibilities:

A comparison of ABB and Rockwell stocks shows that conditions are VERY favorable for ABB to buy Rockwell. Rockwell stock is down, and ABB is strong, with plenty of cash to buy an ailing Rockwell if it chooses.

Two weeks ago, ABB named Joseph Hogan, the head of GE Healthcare, as CEO. During his tenure at GE, Joseph Hogan spearheaded a number of large acquisitions including GE's biggest-ever acquisition. Now expect him to bring out ABB's big guns. Rockwell will roll.

Read: ABB growth roars - new acquisition-orientated CEO

My apologies. Due to spam filters and other reasons, the weblogs have been blocked. The problem has now been corrected, and your comments are now coming through. Please continue your weblogs.

Jim Pinto

Friday, March 7, 2008

Why did Fred Kindle leave ABB?

Read insights and analysis by Jim Pinto in the latest (7 March 08) issue of JimPinto.com eNews.

ABB CEO Fred Kindle exits over acquisition strategy

Monday, February 25, 2008

Now that CEO Fred Kindle has gone and the Board looks like it might take a more aggressive approach to acquisitions, who are the likely automation targets for ABB? Apparently they are most interested in acquiring product rich companies to stuff through their existing sales channels, who would be the best fit there?

Pinto suggestion: Rockwell Automation is ripe.

Tuesday, October 2, 2007

I have been working with the 800XA system and I was really astounded by how bad the software is. The tools are jumbled and the not least bit consistent. It takes an enormous amount of time to configure even the simpliest projects. ABB has a very small market share in the US and I can see why. Maybe if you outsource the engineering to a very low cost country, the configuration cost can be finessed.

Sunday, January 28, 2007

Even with the blunders of acquisitions, ABB need to get their core business in order and quickly to stop the project leakage. How much proof is in the pudding when their Australian operation has spent more than double of the sale value on a major power station refit, and we are talking big numbers here. Pity the Australian market is so unforgiving, look at what has happened to other DCS vendors who ventured into the power game unprepared.

Thursday, March 23, 2006

ABB's undoing, other than the bold aquisitions which were risky at best, was primarily because of the inbred philosophy of Jogen Centreman(CEO) in his self driven ego and pride to institute a TOPS (total optimization of processes) reform in 2000 that crippled the company in bureaucratic paperwork. Enormous amounts of resources and talent were wasted at a time in the evolution of the company in building the business. This was compounded with a management mentality that followed the "emperor who had no clothes". This in my opinion was the overriding straw that broke the camel's back. To this day, reminants of the program are still crippling the company, which remains severly top heavy and cannot function well.

Thursday, March 2, 2006

It seems likely that Dinesh Paliwal will finally be succeeding in extracting the power plant automation group out from the electrical group and the Wyckliffe DCS operation will now all be under the AT org.

Monday, February 20, 2006

Wow, check out 2005 results!

ABB posts $735 million net profit for 2005 - 16 Feb. 2006

• Full-year EBIT more than $1.7 billion, EBIT margin at 7.8 percent
• Cash flow from operations tops $1 billion for the year despite securitization effect
• Net debt cut by 50 percent versus 2004
• Board of Directors proposes dividend of CHF 0.12 per share

Saturday, December 10, 2005

I'm dumbfounded that nobody has anything to say about ABB on this board in nearly 4 months! The stock is starting to move with the news that the litigation issue concering Combustion Engineering & Absestos could be resolved shortly (perhaps as early as Q1 '06). Recently ABB posted numbers that are consistent with the turnaround that's been promised for some time.

In '05 in the US ABB put their drives and LV products under one big happy umbrella with the hope that they can leverage from their strong position in drives for other LV control products. This appears to be working, according to those on the inside.

If you're into stocks it may be good timing to put this one in your 401K as the consensus is the expected favorable ruling will push it to >$15 in short order. Even "Mad Money" Jim Cramer likes the look of ABB!

Saturday, August 20, 2005

There is still much more potential to be unlocked within this company. The North American regional concept can be adopted in Europe that would create a more powerful organization not to mention more profitable. Further, ABB has yet to take advantage of low cost countries (LCC's). You would think after all of the changes and a global structure that ABB woud be manufacturing outside of western Europe. The problem is still the old gaurd, global managers are still highly protective of their local responsibilities. This decoupling needs to take place in order to be competitive and deliver more cash to the company.

Tuesday, May 10, 2005 - from Walt Boyes [wboyes@putman.net]:

I think you are spot on on your analysis. The behavior of the ABB executive committee and senior leadership at the recent ABB Automation World (chronicled on my weblog "Sound Off") bears out the fact that ABB is back, wiser, chastened, and ready to grow.

Click to read:Walt Boyes weblog. Click on "Sound Off"

I pointed out a while back that Emerson's dominance in the automation market is only partly earned...they grew to leadership while ALL of their competition was committing seppuku. John Berra knows this. He says that half his time is spent "instilling a proper sense of paranoia" in the Emerson troops.

With several large players healthy and on their game, it looks like consolidation time is over for this cycle.

Tuesday, May 10, 2005 - JimPinto.com eNews:

ABB was fueled by a series of bold acquisitions in the 1990's. But then, in mid-2002, a series of "hard knocks" took the company to the brink of failure. But quick, decisive action succeeded in reversing most of the problems. Read this review of the culture of a new, stronger and more focused ABB - one of the automation industry's most dramatic turnarounds.

Read the JimPinto.com eNews item, with a link to a more detailed article on the JimPinto.com website.

Click to read:ABB Corporate Culture Review

Tuesday, March 22, 2005 - from Tom Chen [tom.chen@optusnet.com.au]

Jurgen Dormann has done a super job to turn ABB around. He has assembled a young team and doers, led by new CEO Fred Kindle who is a real quiet achiever!

Wednesday, March 3, 2004 - ABB Announces Fred Kindle will become CEO in Jaunary 2005 :

Zurich, Switzerland, February 27, 2004 -- Fred Kindle will become the next chief executive officer of ABB Group. He will replace Jürgen Dormann as CEO next year. Kindle, currently chief executive of Swiss-based technology company Sulzer AG, will join ABB on September 1, 2004 and formally take over as CEO in January 2005.

Wednesday, October 29, 2003 - UK Telegraph

Oil and gas sale to ease ABB debt
UK private equity groups Candover and 3i are set to acquire the oil and gas business of ABB as part of a $4.1 billion (£2.4 billion) refinancing plan. The Candover-3i consortium, which also includes JP Morgan Partners, are expected to pay between $925m and $975m, but are still haggling over terms.

ABB's radical financial restructuring included a deeply discounted rights issue that will double the equity in issue. The restructuring will also include a €650m bond issue and a fresh $1 billion line of standby credit. The refinancing will lift the pressure from ABB, which has been struggling under its heavy debt, calculated to be $8.35 billion at its most recent results in October.

Click to read:UK Telegraph story

Thursday, October 23, 2003 - Ronald C. Kurtz [ronald.c.kurtz@us.abb.com] wrote:

A recent story about ABB in Forbes (Oct. 5 2003) quoted ABB Chairman Jurgen Dormann as saying, "ABB has not reached its worst point." Mr. Dormann was misquoted.

The Forbes story was based on an uncorrected Reuters report (which itself was a translation of a local Swiss newspaper article)in which Mr. Dormann said (in German), "we are not out of the woods yet." Somehow Reuters translated that to "ABB has not reached its worst point."

Mr. Dormann's actual comment, "we are not out of the woods yet," is consistent with his recent messages that while the company has made excellent progress, it still has work to do.

ABB contacted Reuters and Reuters subsequently corrected the story and reissued it.

Tuesday, August 26, 2003 - from Brad A. Hoffman [brad.hoffman@us.abb.com] Group Vice President - Communications, ABB Automation Technologies Division:

Given the well-publicized challenges at ABB over the past couple of years, an update on its very positive progress is in order: Costs are down, core businesses are performing ahead of target, key portfolio steps are on track, and a critical liability issue is headed for resolution.

ABB’s financial results for the First Half 2003 were highlighted by a nearly 9% increase in core division orders - achieved during a period of exceptional challenge in many world economies. Core division revenues increased by 15% for the period and EBIT climbed 24%, reflecting a solid trend now in place for three quarters.

At the end of 2002, ABB committed to a $900 million reduction in the group’s cost base to refocus its businesses for long-term strength. As of June 30, we have achieved nearly one-third of this goal, with over $230 million in sustainable savings implemented.

While strengthening its core businesses, ABB has also moved forward on its commitment to divest certain non-core operations. Substantial elements of our financial services and building systems businesses have already been sold, and we remain on track to complete the divestment of these units plus our oil and gas operations during 2003.

In late July, ABB announced yet another critical milestone with court approval of an agreement to settle the asbestos-related litigation involving its US Combustion Engineering (CE) subsidiary. This landmark agreement is structured to cap liabilities at a figure well below many analyst estimates. The “prepackaged” Chapter 11 proceeding which makes this possible will have no effect on core operating businesses or assets. Although certain appeal and procedural steps remain, the agreement has been approved by the overwhelming majority of involved parties.

While taking these difficult steps, ABB is enjoying a remarkable level of confidence and support from its customers. We continue to earn major contracts across a wide range of industries, our list of strategic customer alliances continues to grow, and our massive installed base is calling on us for lifecycle support. We sincerely thank these stakeholders for their trust and support!

Thursday, July 03, 2003 - UK Telegraph (extracts):

ABB has admitted that its very survival is threatened by its ongoing American asbestos court case. In a document filed with the US Securities and Exchange Commission (SEC), ABB complained that a drawn-out appeals process against a settlement sanctioned last month could make it impossible to raise fresh capital. ABB said in the filing: "If we are unable to reduce our indebtedness, we may be unable to fund our obligations when due and may therefore be unable to continue as a going concern."

The asbestos claims relate to the company's US subsidiary Combustion Engineering, which filed for Chapter 11 protection in February. Last week a bankruptcy court in Delaware provisionally agreed to cap liability claims at $1.2 billion (£720m).

Friday, June 13, 2003 - from Ron Kurtz, Director, U.S. Media Relations, [ronald.c.kurtz@us.abb.com]:

There are two points in your June 10 newsletter that are somewhat off the mark, and we would appreciate it very much if you would clarify them for your readers.

It is true that ABB is reducing its labor force by some 35,000. This reduction is coming in part from layoffs and from divestiture of the company's Oil, Gas and Petrochemicals division and other operations identified in the 2002 Annual Report. The reduction is not from layoffs alone.

Regarding Mr. Dormann leaving the company: Mr. Dormann is deeply committed to making the turnaround happen in ABB and has no plans to leave the company. ABB has accomplished many positive things recently under Mr. Dormann's direction.

Tuesday, June 10, 2003 - Extract JimPinto.com eNews:

ABB continues to re-structure and sell off non-core businesses. It was recently announced that ABB will reduce employment to about 100,000 by the middle of 2004, which means they will have to layoff about 35,000 people from the present level. In the meantime, Dinesh Paliwal of India is reported to be taking over from Jurgen Dormann as the CEO.

Tuesday, May 6, 2003 - excerpt from an article in Control Engineering:

"In another restructuring move, ABB will seek to decrease its employees to about 100,000 by the middle of 2004, according to Ronald Kurtz, ABB's U.S. media relations director. This means it will have to layoff about 35,000 people from its present level of 135,000. Mr. Kurtz added May 1 that ABB has already terminated about 4,000 employees, shrinking from 139,000 to 135,000 staffers, in the four-to-five months ending in March 2003."

Wednesday, April 23, 2003 - Change of leadership at ABB. Again?

I came across this article, based on the Swedish industrial daily Dagens Industry.
Is this just a gossip, or something really smoldering?

Dinesh Paliwal of India is likely to take over from Jurgen Dormann as the chief executive of the engineering major Asea Brown Boveri (ABB), according to well-placed company sources.

Paliwal, who began his career in India and has worked in several countries, currently heads ABB's largest industrial concern, Automation Technologies, after having held a series of challenging posts within the Swiss-Swedish engineering group.

Click to read:Dinesh Paliwal poised to head ABB

Friday, March 7, 2003 - Ranjeet Vaishnav wrote:

I had left ABB in Oct 2001 - but couldn't stay away for long! I was back with ABB exactly a year later - many friends and well-wishers insisted that I reconsider my decision to return because it was during those days the 2002Q3 results were announced and news from ABB was not good! But I have faith in ABB and the way it is being run. I also have a tremendous amount of respect for the freedom and flexibility ABB gives to it's employees - I can safely say that I was 'home-sick' during the one year I was away from ABB!!

With the strong performance by the core businesses in 2002, there is no doubt in anyone's mind that the worst is over and we are getting back on track!

Thursday, March 6, 2003 - from Gary J. Smith [gjsmith@forsythco.com]:

I am an ex Elsag Bailey/ABB employee, who left the company at the beginning of 2002. I had responsibility for several major accounts and was chosen to be one of the first Strategic Account Managers. I have more than 30 years of working for various industrial controls companies and enjoyed the time with Bailey and ABB.

While there was certainly upheaval with many of the changes that occurred within ABB, I enjoyed the freedom and flexibility to manage my part of the operation. The Strategic Account Manager program was in its infancy when I joined it, but I believe it was one of the programs that helped focus ABB on their core businesses. I was very impressed with the people involved, the training and the support given by ABB.

I feel sorry for my friends who are having to deal with the very difficult issues of today, but know that they are dedicated individuals who have their customers interests foremost.

Extract from JimPinto.com eNews, March 6, 2003

ABB posts record loss - but the worst is over

Monday, February 17, 2003

As a former employee of ABB I am now free to contribute to this discussion. By coincidence I have been thinking of why ABB has been sinking over the last two years. Although most of my experience was in the UK, some may apply globally.

1. ABB has never been very good at change - not reduction. Maybe this is due to the fact that strategic development and management effectiveness has been tied to the Barnevik model of Management by Objectives. In ABBs case, objectives tied to annual targets against budget. Customer service and product innovation were not part of the core management group. The Customer Focus initiative was a real disaster.

2. When the new strategy and approach was overdue, and brought in by Lindahl, it was a mess. No direction and no focus. Managers did not know how to react.

3. Aquisitions - well the aquisition in the UK of Elsag Bailey has ended up that basically ABB could have bought it, and then closed it down. Almost all the former employees of EB have left as part of the restructuring. Allowing inneficient and historically St. Neots to continue.

4. The Group process Division has been disbanded. Although seemingly a good move, each country has to still employ and manage support staff. If you look at Swedens job vacancies, they you can see that the slashing of GP is only going to allow country sub-optimalisation, and redistribution of labour.

5. Much of Automation in the UK underwent a disasterous change progamme in 2001, before the ABB global project. This threw many employees into a huge amount of internal wrangling. Whilst some of the initiatives are good, and continue, the method of approach created inaction.

6. ABB responds to reduction in sales, by an automatic reduction in headcount. This places fear in all employees. Does not allow the root cause of business decline to be analysed and tackled. Processes are not improved when this happens, despite a headcount reduction being a 'result' of improvements. The improvements are often never realised because employees do nt have the time to look at this areas. They just work harder - not smarter. It takes resource to improve efficiency. So I believe that some of the decline of ABB has been by ABB actually reducing in size, and this affecting effectiveness. And so the circle of reduction continues.

7. ABB has generally been very poor at working with partners and sales channels. there have been many instances where this relationship has not worked well, and is part of the criticism and confusion of the Partner channel strategy. Over a period of time, ABB will learn. But ABB is not good at self analysis, and bringing in new ideas and approaches like this. Arrogance was a feature of ABB that many customers reported they felt ABB behaved.

I like ABB, and hope to perhaps return one day. But ABB needs to get back to its roots - as Dormann is doing. But also to think intelligently, and not knee jerk. The shareholders views has had an enormous effect on ABB strategy and response in recent times. ABb seems not to have reacted to this well in the past. I hope it will, I have just bought some shares in ABB...

On Friday, January 17, 2003, Dave Biros responded to the ABB weblog (below) regarding the sale of ABB's facility in Columbus, Ohio.

While the facts reported are essentially correct, as is often the case, it may be useful to hear the "other" side of the story.

ABB is aggressively moving in this economic environment to divest itself of non-core assets. This includes real estate. In 2002, ABB sold its substantial real estate holdings in Sweden, a historically important country for ABB. We received a good price for this property, and the sale did not harm ABB's core automation and power business in any way. Regarding the Columbus site, this sizable complex was simply no longer suitable for the quality control system (QCS) business there.

Why was it not suitable? As you know, a key way to ensure product quality is to move to "focused factories" rather than have many sites making the same item. Many years ago, a strategic decision was made to build QCS manufacturing in Ireland to serve our growing European base. At the time, suppliers felt it was important to have manufacturing close to the customer.

Today, customers are less concerned about where a product is made. ABB saw the opportunity to implement a focused QCS factory in Ireland, where education and skills are high, and labor rates are favorable. This plan was announced in March, and by June, Columbus QCS manufacturing was transferred to Ireland. A parts depot serving QCS and other ABB businesses was then moved to ABB's substantial operations two hours north in Wickliffe, Ohio, former headquarters of Bailey Controls.

ABB's QCS business is strong and continues to gain market share. QCS, along with ABB's paper machine drives business, is the reason for ABB's dominant position in paper automation solutions (ranked No. 1 by ARC). And though the Columbus facility was sold, the remaining employees will continue to work in Columbus, just at a more suitable location.

Dave Biros
Group Vice President, Marketing Communications
ABB Automation Technologies

Extract JimPinto.com eNews Dec. 30 2002
Automation update - year-end 2002 - ABB

ABB is still suffering from indigestion from the multitude of acquisition made in the past few years, and so probably won't do much more than recover during this coming year.

Monday, December 16, 2002

The facility referenced in the article below was the home of AccuRay, purchased by Combustion Engineering (CE) and then aquired by ABB in the Combustion Engineering aquisition.

After a long series of downsizings at this facility, they are down to 320 people from a high somewhere near 1200 several years ago.

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OSU GROUP TO BUY ABB'S NORTHWEST SIDE PROPERTY
THE COLUMBUS DISPATCH - Saturday, December 14, 2002 (extract)

The Ohio State University Foundation is buying the 26-acre home of ABB on Ackerman Road for $16.5 million.

Thursday, December 5, 2002

As a former employee of ABB, I am surprised at the amount of positive logs this site is getting from current ABB employees. These people are no doubt all from the 'old' automation division as I can personally testify that when Centermann took over the reigns, life was made miserable for all those not belonging to 'his' part of the business.

I saw top managers and talent leave soon after he became CEO and found the organisation was systematically becoming more slow and bureaucratic, creating a lot of air around Industrial IT, but leaving the people who actually had to make it happen confused about what was required.

Leaving the company was a very difficult thing to do, and I will always have a soft spot for a company that was truly great, but I am unfortunately not surprised about the latest developments.

I sincerely wish Mr. Dormann (and the entire organisation) all the best in recovering what was not so long ago Europe's most admired company.

Monday, November 25, 2002

Hello Jim:

I just want to clarify a point in the ABB article in your latest newsletter. Please note that the "Oil, Gas & Petrochemicals" business that ABB plans to divest is an Engineering, Procurement and Construction business. ABB will continue to serve oil, gas and petrochemical customers with its core automation and power technology. In fact, ABB has grown its automation business serving the petroleum industry in double digits annually over the past few years, and we are currently ranked No. 1 by ARC in process automation systems sold to the oil & gas industry based on 2001 revenues.

Dave Biros
email: dave.biros@ch.abb.com
Group Vice President, Marketing Communications
ABB Automation Ltd.

Monday, November 25, 2002

Jim Pinto response to questions from ABB employee below :

1. I agree that ABB is basically a well-run company, good management and good employee communications all round.
2. Much of the information I publish is derived from European financial news and analysts.
3. The news about "20,000 job cuts" came from a European news paper, reporting that the Unions were expecting that level of employee reuctions.
4. The item about going to Distribution was directly quoted from a news item which reported that Mr. Dormann said that would happen. In my own opinion, utilizing multiple sales channels - a combination of direct sales plus Distributors - provides good coverage for all levels of customers.

Monday, November 25, 2002

As an employee of ABB, I must say that I find the comments about ABB to be describing a very different reality than what I see within.

Yes we have problems, and yes we need to make changes. But things are not that bad. From the news it seems like ABB is about to tumble and fall. But it seems to be based upon roumors and speculations.

From within the future looks quite good actually. One thing that ABB has been good at is change, and that is what we need to be good at now.

We are already seeing improvements, and our customers (at least in europe) seems to stick with us. And do not forget our close relations with Dow Chemicals. Development plans has not been stopped or cut back, no one has lost their job yet, and revenues are slowly rising in many segments.

One thing I am interested in knowing though, is from where the roumor of 20.000 job cut's came from. And, this thing about switching from direct sales to distributors. The last one must be a misunderstanding. What ABB is doing is to use distributors in addition to their own sales channels for some products. That is good, and will probably increase sales in areas that ABB as been weaker in historically. (smaller projects)

Maybe I'm all wrong, and have been misled by my own management, but I do not think so. And neither do most of my collegues.

See JimPinto.com eNews - Monday, November 25, 2002

The ABB Blues

Wednesday, November 20, 2002

Is there any confirmation to the rumor that US subsidiaries of some European comapnies are beingn warned to avoid ABB's products and services because of the uncertain future? If this is true and becomes widespread it could cause a rapid loss of marketshare.

JimPinto.com eNews - 12 November, 2002

Siemens & ABB - Compare & Contrast

On Friday, Nov. 01 2002 - Marc Cote [marc.cote@everest-automation.com] wrote:

Jim, as a regular reader of your eNews letter, I have to say that I am disappointed with the biased comments you expressed about the "sad" state of ABB. It is clear that even though they would agree that things are not all that great at the present time, their analysis certainly is very different than yours (and a number of shareholders too apparently).

Some would say that many of the changes brought about by Jurgen Dormann are positive and will help to improved the situation in a relatively short period of time. The reality is that apart from the Combustion Engineering situation, ABB is suffering the same woes as the economy.

The main purpose of my reply is your 3rd point made about the "key mistake" ABB has made going to channel partners (rep's/distributors) and as a result apparently losing touch with customers:

1. Firstly, you obviously have NO idea how this process is being done. If you did, I suspect your view might change.
2. Secondly, how many large corporation do you know take truly good care of customers ? Other than certain exceptions such as Dell computers, they are few and far between.
3. Thirdly, Emerson Process Management is built on a Rep system? So in your opinion, Rep systems work for Emerson - but for ABB, it is a mistake?!

Jim Pinto response

Marc, I had reported on ABB in the past, but always that it was a well-managed company that was having bad luck. Just recently, I have had a lotttt of requests to start an ABB weblog, which I have done.

After the exit of Percy Barnevik (with excessive post-departure compensation) I supported Centermann, who I thought was an excellent manager. I think too that Dormann is a good manager and is doing what needs to be done. I pointed out that the CE fiasco may bring the company down, because a court ruling has already determined that ABB cannot simply wash their hands by a CE bankruptcy. I am sorry if you don't like that news.

Channel-partners: Yes, most good companies work through Distributors. And I am well aware of the background and history of the Fisher Reps. Indeed, I have worked with several Fisher Reps in the past and I am intimately familiar with their business model. However, the Fisher Reps are an exception (name another?) which was developed over many, many years. Simply switching to Sales Reps will NOT help ABB, in my opinion.

Thursday, October 31, 2002

ABB seems to hold the patent on bad luck -- some of it self imposed. The interesting part is their products work (the ones I know) and the service people I know are there when I need help. It seems like bad luck can happen when we try too hard to fix the problems too fast. A new batch of good wine takes time.

Thursday, October 31, 2002

Jim, it's a shame when you devote your considerable intellect to passing on rumours, inuendo, and downright falsehoods as in your 21 October commentary on ABB. As in the irrational Dot Com Boom of the 90's, at least part of the challenges facing ABB and thousands of other firms today are traceable directly to the effect of misinformation on a nervous market. To wit...

• "ABB to cut 18-20,000 jobs . . ." Never announced by the company, or ANY informed source.
• "To save costs, ABB will move from direct-sales to Reps and Distributors . . ." In truth, ABB enjoys a mix of high-volume product sales and value-added direct solutions that is the envy of many others. There are no plans to change this.
• "ABB not supporting their legacy products . . ." An installed base of some 30,000 repeat customers begs to differ.
• "ABB nears collapse . . ." shrills a UK headline writer on 21 October. Ten days and counting, and we're still here!

ABB woes erupt in a major fiasco

Once again, Jürgen Dormann, ABB's third chief executive in five years, is finding himself having to slash and burn. Dormann, who has been called "a boardroom Rambo", is trying to salvage ABB with radical surgery: $800 million in cuts, a whole division to be sold, the rest of the company to be shuffled and about 18-20,000 more jobs to be eliminated. This is on top of recent efforts to cut $500 million and 13,000 jobs.

ABB, which once hoped for $50 billion in sales this year, may wind up with only $18 billion. The company faces two severe threats to its ability to ride out this slump: rising debts (reached $5.5b in Sept. 02), and a flood of lawsuits over asbestos liability, literally 110,000 suits so far. Estimated costs to settle asbestos related claims have now exceeded the value of Combustion Engineering assets. So, ABB will seek protection under Chapter 11, believing they can isolate CE from the rest of ABB.

On Oct 21 02, a UK Financial Times article proclaimed: "ABB nears collapse as shares hit record low." On Oct. 22, ABB share price fell over 50%, ending the day 62% down.

Highlights from a recent analysts conference : Revenues down 7% for the quarter and 2% YTD. Sales down 13% for the quarter and 7% YTD. Orders for Utilities down 47%, Oil, Gas and Petrochemical down 43%. Process Industries segment showing recovery with orders up 2% for the quarter, but down 9% YTD.

Pinto Prognostications:

1. The ABB position is a fiasco. Combustion Engineering (with Taylor and other pieces in tow) was bought with all liabilities - including the asbestos liability. ABB is trying to protect their European assets by forcing the US company to file bankruptcy. This will cause serious pain to many employees, ex-employees and customers who suffer from a disease called asbestosis. This will likely cause the US government to intervene.
2. It should be noted that ABB results are really bad, even without the CE fiasco included. The rest of the ABB US business is in a complete shambles and ABB is not investing anything to save it. The consequence to US customers is huge. ABB was already not supporting their legacy products; now this cannot be rectified as their cash position worsens.
3. Key mistake: To save costs, ABB will move from direct-sales to Reps & Distributors ("channel partners"). This means they will lose touch with customers; and the Sales Reps will remain wary as they harvest business rather than aggressively pursue new business. The savvy Sales Reps know full well that they are in a dying business which cannot support their costs in an increasingly more competitive market.