Fred Kindle in surprise departure from ABB
Zurich-based engineering group ABB has announced the sudden departure of its chief executive Fred Kindle owing to differences of opinion about leadership.
The surprise move came as the group announced very strong full-year results a day early. Full year net income for 2007 more than doubled to SFr4.18 billion ($3.8 billion) compared with SFr1.54 billion in 2006.
Kindle, who was named Swiss Entrepreneur of the Year last December, joined the company in 2004 and took over as president and CEO in 2005. He oversaw a period of strong growth and return to profitability at ABB.
“Fred Kindle is leaving the company due to irreconcilable differences of opinion about how to lead the company,” the group said in a statement.
However the board said it fully supported the strategic targets announced by Kindle in September 2007 and was confident in the executive committee’s ability to drive the strategy forward.
Chief financial officer Michel Demaré has been named interim CEO. The board will “immediately” begin the search for a successor for Kindle, ABB said.
Tribute
The chairman of the ABB board Hubertus von Grünberg paid tribute to Kindle’s work. “The board is very thankful to Fred Kindle for driving the company to the extraordinary level of performance it achieved over the past three years.
“He successfully streamlined and strengthened the company’s operations around the world. Under his leadership, ABB today is a leading company in respect of growth, profitability and business ethics,” von Grünberg added.
Some reports say that Kindle’s greatest differences on the future strategy of the company were with von Grünberg, who had reportedly fought with executives at other companies in the past.
However, von Grünberg denied that Kindle’s departure resulted from a clash of egos. During a conference call with journalists he also ruled out disgreements over acquisition or share buyback strategy, despite Kindle’s notoriously conservative approach.
“There was no board clash with Kindle over what to pursue,” von Grünberg declared.
The conference call failed to shed any light on Kindle’s shock departure. Von Grünberg said he was “miserable” when he got out of bed this morning knowing he would not be able to provide answers, but called for patience.
He was adamant, however, that there were no skeletons lurking in the closet surrounding Kindle’s short reign.
“There is no ugly thing associated with Mr Kindle’s departure. Mr Kindle is a highly ethical person and the board had total trust in him. There is nothing lurking in the bushes,” he said.
Strong results
ABB’s surprise decision to announce its headline results a day before the scheduled annual report showed the company remained in robust health.
The dramatic leap in profits from SFr1.54 billion to SFr4.18 billion includes a gain on the sale of ABB Lummus Global of SFr584 million and a positive impact of SFr523 million from the recognition of deferred tax assets.
The ABB board will propose a dividend of SFr0.48 per share to the annual general meeting on May 8.
The company said it had decided to start a share buyback programme up to a maximum value of SFr2.2 billion.
ABB will report its complete 2007 results and hold media and analyst briefings on Thursday, as scheduled.
swissinfo with agencies
ABB specialises in heavy industrial electrical switches, transformers, generators, circuit breakers, cables and related software and communications systems.
Such products are typically used by power plants, oil and gas companies.
ABB operates in about 100 countries and employs more than 110,000 people.
Kindle, born in 1959, is a joint Swiss/Liechtenstein citizen. He joined ABB in 2004 and became president and CEO in January 2005.
He started his professional career as a consultant with McKinsey in New York and Zurich and also worked with the technology company Hilti.
He then took a job with Sulzer in 1992. He became CEO in 2001 and led the company through a period of change.
Full-year 2007 net income was SFr4.18 billion ($3.8 billion) (+271%)Including exceptional gains of SFr1.11 billion.
ABB will propose a dividend of SFr0.48 per share in the form of a nominal value reduction.
It will start a share buyback programme up to a maximum value of SFr2.2 billion.
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