Blog Wednesday

Joe Hogan met with me for a few minutes on an appointment packed Tuesday at ABB’s Automation and Power World conference. What’s the biggest constraint for ABB’s future growth? Hogan answered, “People. Finding the right talents with deep understanding of the process.” He’s looking for people with deep experience in ABB’s various customer’s industries. The talent search is not just technical, but technical people with managerial knowledge and experience.

Managing Acquisitions

Big companies need to grow both organically and through acquisition. It is so easy for acquisitions to go poorly. And ABB was just touting all the acquisitions completed in the past year. So I asked Hogan about his philosophy and action plan for successful integration of new companies.

The Baldor acquisition was large and strategically important. Hogan said one key was humbleness. In other words, ABB didn’t come in and tell everyone to change the way they did business, wipe out management and subsume the company’s image. Instead, they kept every one of the top 80 managers. He has monthly updates about the process that includes Baldor’s management. In fact, Baldor’s management is running the combined motor sales organization. Similar with Ventyx.

Hogan concluded, “We have many organic growth opportunities in addition to acquisitions. We are focused on technology to solve problems for our customers. We’re trying to know what our customers want and what we can do to help them.”

Discrete Automation and Motion

After that, I got an update on the discrete automation and motion division from Ulrich Spiesshofer, global business unit manager, and Greg Scheu, who is business unit manager for North America.

There are five strategic areas within the division with two key enablers.

The first is robotics. ABB is one of the global leaders in robotics. This product area has rebounded from a loss in 2009 to profitability in 2010. ABB is “strongly, cautiously optimistic” about the robot business in the near future.

The next area is industrial motion, which includes drives and motors. Things that enable and control movement. ABB had a very strong base in standard IEC motors. With the Baldor acquisition, ABB feels it is now in a strong global leadership position. The strategic plan for integrating Baldor’s organization into ABB is to assure “you keep the soul of the company while leveraging what ABB can do for Baldor.”

Power quality and control is the next area. ABB has won a big contract with Deutsche Bahn, the German train system, to retrofit the electrical power system on a train. It is now running at 15 points higher efficiency than before. Other technologies include stabilizing power supply into automation, high end UPSs, and now a battery storage solution.

For renewable energy markets, ABB has decided to focus on wind and solar. The company has had a strong base in wind, but it has come late to the solar party. But it is developing its technology for both grid and consumer markets.

ABB entered Emobility on the charging side tied to its power electronics capability. It is now working with battery and car manufacturers.

2 key enablers

The first enabler is packaging applications, that is, don’t think about selling individual components, but package them into solution packs.

The second enabler is service. Not just spare parts, but using technologies such as remote condition monitoring and predictive maintenance information for customers.

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