|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
ABB may slash 12,000 more jobs
ZURICH, Switzerland -- Ailing engineering group ABB may cut as many as 12,000 more jobs as it moves to slash debt by more than a half. "Clear, decisive action is needed and that is what we will do,'' said Chief Executive Juergen Dormann on Friday. "We do not expect any help from the markets in the next year to 18 months.'' Dormann said at least 10,000 of its 148,000 workforce could be laid off. "I cannot say whether it will be nine, 10, 11 or 12 (thousand job cuts),'' said in a conference call. ABB, which has said it would reduce its workforce to 110,000 as it sells business, has already cut 13,000 jobs. The company has fallen on hard times as demand for its products -- ranging from robots to electrical switches -- wanes amid sluggish global economic growth. At the same time, it plans to place its U.S. business, Combustion Engineering, under Chapter 11 protection in an effort to ward of creditors and contain the cost of asbestos-related claims. Its third-quarter loss widen as it was forced to set aside more money for those claims. Dormann said he was "confident'' the court filing would put an end to the matter and fence off asbestos claims from the parent company. ABB, Europe's largest heavy engineering group, was once seen as the continent's challenger to mighty General Electric of the United States. Its European sector peers are Siemens (FSIE), Invensys (ISYS), Schneider Electric and Alstom. Its now also plans to cut debt to about $4 billion by 2005 by selling assets such as its Oil, Gas and Petrochemicals division -- which maintains North Sea oil rigs. The company of Friday issued it second profit warning in two week. Last month, ABB warned it could not hit its 2002 target of an earnings before interest and taxes (EBIT) margin of four to five percent of sales. It now expects a margin of 1.5 percent for 2002 on flat to slightly lower sales. Group revenues are expected to rise by four percent per year from 2002 to 2005. ABB said it aimed at an EBIT margin of 4 percent in 2003 and 8 percent in 2005, down from a target of 9-10 percent. A previously announced plan to slash $800 million from the cost base, or 4 percent of sales, will take 18 months to be completed from January 1. Two-thirds of these savings will come from job cuts and ABB expects costs of the cuts will be 1.8 percent of revenues in 2003, leading to a charge of some $300 million. ABB's stock, which has fallen more than 80 percent this year, rose 1.35 percent to 3.01 euros in midday trading in Zurich. Dormann was named chairman in December last year after the sudden resignation of Percy Barnevik who led ABB since the 1988 merger of Sweden's Asea AB with Switzerland's Brown Boveri. Dormann also became Chief Executive in September after the ouster of another Swedish ABB veteran, Joergen Centermann. Already nicknamed "Doberman Dormann'' by ABB staff, he said "over time'' the aim was real expansion with increased market share and profitable growth. He said he had travelled widely and met with "10 CEOs in the past 10 days'' and claimed that the clients were still fully behind ABB and its technology. Reuters contributed to this report.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
