ABB has chosen a 44-year-old Swiss engineer as its new CEO, ending months of speculation about a successor to Jürgen Dormann, the Zurich-based group’s current chief.This content was published on February 27, 2004 - 12:21
Fred Kindle is chief executive officer of technology rival Sulzer and will replace Dormann at the start of 2005.
Dormann will remain chairman of ABB for at least “one to two years”.
Although some analysts expressed surprise at the choice – many were expecting an appointment from within ABB's ranks – Kindle’s youth and his success at revitalising Sulzer caught Dormann’s eye.
“It is very positive that they get someone with a very good reputation,” said Bank Leu analyst Patrick Appenzeller.
“Kindle will look to stabilise the company,” he added.
However, the news initially appeared to dampen interest in ABB shares, which fell slightly on Friday, before recovering to around SFr7.90 ($6.21).
“Maybe some [investors] think it is a big step for [Kindle], and ABB should have someone with more experience”, said Claude Zehnder, an analyst at Zurich Cantonal Bank.
Tension at the top
There was also speculation that the arrival of an outsider at ABB would cause tension among top managers, including chief financial officer, Peter Voser.
Dormann said on Friday that he was convinced Voser, one of several executives credited with helping rescue ABB and tipped as a potential CEO, would stay.
Kindle will assume control of a firm that two years ago appeared to be heading for disaster, as debts racked up during a 1990s spending spree looked to overwhelm ABB.
At the same time, demand for its products slumped amid a global economic downturn.
Dormann, who has been lauded for putting ABB back on solid ground, has slashed some 40,000 jobs and sold off non-core assets around the world.
However, the Swiss-Swedish firm, which is increasingly focused on building power transformers and industrial robots, faces several key challenges in coming months.
Debt remains high, and a protracted asbestos case in the United States continues to cast a shadow.
Before leaving, Dormann has promised to finalise the sale of ABB’s oil, gas and petrochemicals unit, and return the firm to investment grade.
Analysts said Kindle’s move would be a loss for Sulzer, which he joined in 1992. He became CEO in 2001.
Prior to that, he worked as a consultant for McKinsey in New York and Zurich.
Kindle holds an engineering degree from the Federal Institute of Technology in Zurich, and an MBA.
During his two-year tenure at Sulzer, Kindle shrunk the former blue chip, which is expected to report sales for 2003 of just under SFr2 billion.
swissinfo with agencies
ABB made a net loss of $767 million (SFr948 million) in 2003.
The company has been restructuring since 2002, when it almost collapsed under a $9 billion debt mountain.
With roots dating back more than 120 years, ABB was formed in 1988 through a merger between Sweden’s Asea and the Swiss group, Brown Boveri.
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