ABB to trim real estate, other holdings

CEO Jörgen Centerman is going to reduce ABB costs further Keystone

The chief executive of ABB, Jörgen Centerman, says the group will reduce its real estate holdings and take further cost-cutting measures.

This content was published on March 1, 2002 minutes

The power and automation technology group, based in Zurich, has been rocked by a number of recent setbacks.

"We will achieve a turnaround by improving our operational result. We will also reduce our portfolio and make disinvestments, particularly in real estate," Centerman told the weekly "Cash" newspaper.

The cost-reduction programme includes "structural adjustments in sales and administration, a lowering of fixed costs and a simplification of the product range," he said.

Cost reduction measures announced last year included the cutting of 12,000 jobs worldwide, in a bid to save $500 million (SFr849.5 million) annually.

Huge losses

The group last month announced a loss of $691 million for 2001, the first loss posted since the group was formed by the 1988 merger of Sweden's Asea and Switzerland's Brown Boveri companies.

The loss was attributed in part to the $470 million set aside by the company to face claims related to asbestos in the United States.

At the same time as announcing its 2001 loss, the company said it had launched an investigation into the pension benefits paid to two former chief executives.

ABB revealed that former CEO Percy Barnevik of Sweden received SFr148 million in retirement benefits when he stepped down in 1996 and his successor, Göran Lindahl, left the company with SFr85 million.

The company has asked for part of the money to be repaid to it and hopes that an "amicable" solution can be found.

Commenting in "Cash" on the figures, Centerman said they were "incredibly high sums, inconceivable to us".

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