ABB restructures divisions to improve performance

Company reduced the number of its divisions from five to four

Per Erik Holsten, senior VP, ABB
Per Erik Holsten, senior VP, ABB

ABB on Wednesday announced it restructured and reduced the number of its divisions from five to four as part of its plans to streamline its operations and improve financial performance.

The changes will help ABB make $1bn in white-collar cost savings, free up $2bn in cash and become more active in value-creating acquisitions.

Effective January 1, 2016, ABB will operate in a streamlined set-up of four divisions. The new Power Grids division will focus on the changing needs of utility customers with ABB’s complete power & automation offering for transmission and distribution delivered from a single source.

The product and service line for industry and transport & infrastructure—“power & automation for the site”—will be provided by three divisions. The new Electrification Products division will combine ABB’s leading low- and medium-voltage businesses.

“The Discrete Automation and Motion and Process Automation divisions will be further aligned, addressing customer needs and operational efficiency,” Emerson said.

“We are now accelerating to Stage 2 of our Next Level strategy,” said CEO Ulrich Spiesshofer.

“The actions we are announcing today will deliver additional value in a more focused way to customers through our unique power & automation offering.

“At the same time, we will become leaner, faster and more agile. This will drive the shift of our centre of gravity towards higher growth, greater competitiveness and lower risk.

“With these actions, we address the rapidly changing market conditions and face the increased uncertainty in the world. We returned ABB to top-line and operational EPS growth1 in Stage 1 of the Next Level strategy,” Spiesshofer said.

“We turned around Power Systems, simplified the organisation and built a framework to drive a new performance culture. With that foundation, we are ready for Stage 2,” he concluded.

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