Earlier it was Asea Brown Boveri's founder Percy Barnevik who sacked headquarters and regional managers to trim the giant electrical engineering group after he got Asea of Sweden and Brown Boveri of Switzerland to merge in 1988. Now it's the turn of Goran Lindahl, his successor as chief executive officer, to downsize.
Affected as most electrical engineering groups have been by the downturn in orders worldwide, ABB is restructuring to pare costs and improve the speed of operations. The celebrated matrix structure that Barnevik built, about which case studies have been written, is now being dismantled to make way for a more centralised regime.
Clearly, Mr Barnevik, who is now chairman of the group, does not disagree.
The global regional management structure is being dissolved. For the past decade this structure worked in parallel to the product divisions at ABB headquarters.
Two product divisions are also being revamped. From September 1998, the group will have smaller units in their place. The divisions are:
- industrial and building systems - which will be divided into three new units, and
- power distribution and transmission -- which will be broken up into two units