“A jewel of Swiss industry”

Many observers say ABB's sale of its rail and energy equipment divisions was a mistake Keystone Archive

Norbert Lang is a former engineer at Brown Boveri and Co. (BBC), one of the companies that merged to become ABB.

The pensioner, who has managed BBC’s archives for the last 12 years, takes a critical look at the last decade and a half.

“The merger with Asea in 1988 was supposed to give BBC all the benefits of modern management practices,” said Lang. “A lot of hopes were pinned on the mix of technical know-how and entrepreneurial qualities.”

“The first ten years were quite good despite a lot of criticism,” added the engineer. “In the sectors where ABB was number one, railways and turbines, we were particularly successful.”

According to Lang, things started to go downhill when two sectors were sold off in the late 1990s. The rail division became a joint venture, Adtranz, with Daimler-Benz in 1996, before being sold to the German company three years later.

The turbine sector followed the same path, becoming a joint venture with Alstom in 1999. ABB sold its entire energy equipment division to the French multinational a year afterwards.

“For many people, the key mistake was selling off these two sectors,” Lang told swissinfo.

Permanent reorganisation

Lang says ABB cut itself off from its basic know-how, adding that by selling some activities, the company went from being a global services firm to a partial service provider.

“Electronics aren’t enough by themselves,” he said. If you want to automate something, you have to know the sector you want to automate.”

The engineer points to the permanent reorganisation within the firm in recent years as another reason for ABB’s current woes.

“There isn’t enough time between two reforms, so the employees can’t adapt themselves to new working conditions.”

Asbestos concerns

Lang adds that the purchase of American Combustion Engineering was an error made by top management at the time.

“That company has never been a commercial success. But nobody could have guessed that asbestos would become an issue.”

The engineer admits that ABB is facing a situation that could lead to its demise, but remains optimistic about its prospects.

“ABB is another crown jewel of Swiss industry under threat. But I don’t think the situation is as bad as Swissair’s and I hope some kind of solution will be found.”

swissinfo/Ariane Gigon Bormann