Engineering group ABB to cut $800m in costs
Swiss engineering group ABB said today it will cut another $800 million in costs and try to sell its oil division in a move to restore profits and regain investor confidence.
The report came just three days after ABB shocked financial markets by saying it would miss its financial goals for the year and that it could put a US unit tainted by asbestos claims under bankruptcy proceedings.
Net debt rose to $5.5 billion at the end of September from $5.2 billion at the end of June, and from $4.1 billion at the end of 2001. Still, ABB kept its goal of reducing debt by at least $1.5 billion by the end of this year from the level seen at the end of 2001.
ABB has already cut $500 million from costs, which involved 12,000 job cuts to a group total of 150,000 now. ABB did not say how many job cuts the $800 million in additional savings would involve.
ABB's clients such as car makers, food groups, chemical groups and utilities are facing sluggish demand from consumers. That is also supressing demand for ABB's power and automation technology products and services.
ABB said orders fell 8 per cent in the nine months to $16.16 billion, and sales were down 2 per cent to $16.04 billion.
Outstanding asbestos claims rose to 111,000 from 102,700 at the end of June, but cash payments were down a bit to $54 million in the third quarter, ABB said.