The international and Swiss press have some harsh words for ABB's CEO, Jörgen Centerman, in their reactions to the company's announcement that it is to axe 12,000 jobs worldwide.This content was published on July 25, 2001 - 10:35
Wednesday's newspapers won't have made easy reading for the head of Europe's biggest engineering concern. Centerman, in charge of ABB since the beginning of the year, said his decision to axe 12,000 jobs was in response to a harsh global economic climate, which has seen a swathe of companies cut earnings forecasts and slash jobs.
ABB released deeply disappointing half-year figures on Tuesday which saw its net profit plunge by 76 per cent. The fall was not as severe as it seemed because last year's figures were boosted by earnings from key divestments.
But with turnover flat and new orders falling by seven per cent, Centerman decided it was time to act.
In its edition on Wednesday, the London-based "Financial Times" newspaper accused ABB's boss of sounding remarkably cheerful for a man who had just slashed 12,000 jobs. Investors in the group, said the newspaper, proved far less sanguine and wiped almost a fifth off the company's share price.
The FT quoted Centerman as saying he was "proud" his company had performed as well as it had in the first half of the year. It said Centerman sounded remarkably confident, but that the battle to turn ABB around may be a lot tougher than he is prepared to admit.
Germany's "Frankfurter Allgemeine" newspaper was equally scathing. It wondered whether Centerman has the communication skills to explain the group's predicament.
It said the surprise announcement reveals the uncompromising side of Centerman and added that he is a far cry from the stereotypical quiet Swede. The Frankfurter Allgemeine says Centerman desperately needs to improve ABB fortunes and to do so much faster than his stated target date of 2005.
Among newspapers closer to home, the Zurich-based "Tages Anzeiger" led the criticism accusing Centerman of misleading the financial markets in recent months.
It said the ABB boss had clung to unrealistic earnings forecasts and created the impression that the company was insulated from the economic slowdown which is affecting the United States and slowly spreading to Europe.
The Neue Zürcher Zeitung said the global economic slowdown could not be wholly blamed for the company's plight. It said the problems were caused in part by the company's restructuring plan announced at the beginning of the year.
The restructuring aims to make ABB more customer-oriented, but the NZZ says it has weighed heavily on personnel. It points out that the oil, gas and petrochemical division, which has hardly been touched by the shake-up, performed best out of all the company's divisions.
The French-language newspaper "Le Temps" said ABB is paying the price for its reorientation towards a technology sector that has fallen from euphoria to pessimism. And it blames the management for being slow to react to the alarm bells.
Le Temps said ABB's announcement would probably be the first of many by companies in the "Old Continent" as the economic chill spreads from the United States.
The Bern-based "Der Bund" echoed this message. It said the weak economic climate had claimed its first prominent European victims in ABB and British-based Invensys, which also announced massive job cuts on Tuesday.
The paper concluded that ABB has been a great disappointment for its shareholders including Martin Ebner's BZ group, which holds a nine per cent stake.
Having lost 55 per cent of their value since the beginning of the year, the shares are at their lowest level since 1997 and analysts say there is little hope of a recovery in the medium term.
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