ABB Realigns Business Segments to Tap Market Trends; Names New Executives to Group Executive Committee.

NORWALK, Conn.--(BUSINESS WIRE)--Aug. 12, 1998--ABB, the international engineering group, today in Zurich announced changes in its Group management structure aimed at boosting business growth areas, creating new synergies, and ensuring greater responsiveness in local and global markets where deregulation and privatization are opening up new opportunities.

The Industrial and Building Systems segment will be divided into three new segments - Automation; Oil, Gas and Petrochemicals; and Products and Contracting. The Power Transmission and Distribution segment becomes two separate segments - Power Transmission and Power Distribution. The Power Generation and Financial Services segments remain essentially unchanged.

The new business segment structure aims at further promoting growth areas where ABB has technology advantages and unique capabilities. It also reflects business opportunities created by deregulation, and provides the new segments with a clear competitive focus.

"This is an aggressive move aimed at greater speed and efficiency by further focusing and flattening the organization. This step is possible now thanks to our strong, decentralized presence in all local and global markets around the world," ABB President and CEO Goran Lindahl said. "This should be seen as a leapfrog move in response to market trends, to make sure we can serve our customers better and build more value for our stakeholders."

ABB regional organizations, primarily the Europe, Americas and Asia regions, will be dissolved after having fulfilled their mission to coordinate ABB's expansion in their respective areas. Country organizations will remain, continuing to build ABB's "multi-domestic" presence in markets around the world.

Customer contacts and sales organizations are unaffected, with ABB's key customer accounts, sales coordination and other customer focus programs continuing unchanged.

Howard Pierce (57) leaves the ABB Group Executive Committee, where he has served as head of the Americas region since 1995. He will now assume a new role as chairman of the boards of ABB in the United States, Canada, Mexico and China, reporting to the CEO. He will also be involved in projects in the power generation business.

"I am pleased that we can count on Howard Pierce's continued contributions to the Group in a new senior role," Lindahl said.

Peter Janson (51) continues as president and chief executive officer of ABB Inc., the U.S. headquarters of ABB.

The new ABB Group Executive Committee will be composed of the president and chief executive officer, the heads of the global business segments, and the chief financial officer. As part of the realignment on the Executive Committee, three new members were appointed by the ABB Group Board of Directors -- Kjell Almskog as head of the Oil, Gas and Petrochemicals segment; Jorgen Centerman as head of the Automation segment; and Jan Roxendal as head of the Financial Services segment. Each will have the title executive vice president.

At the end of 1997, ABB's corporate regional structures in Europe, the Americas and Asia comprised around 100 mainly managerial positions. The dismantling of these structures will be self-financed through savings, and is expected to generate substantial cost reductions.

Two long-serving ABB top executives, Eberhard von Koerber (60), head of the Europe region, and Sune Carlsson (57), head of the Industrial and Building Systems segment, will leave their present positions. Both have been on the ABB Group Executive Committee since the Group's formation in 1988. Eberhard von Koerber will leave his employment with ABB but continue to work with the Group as Senior Advisor to the CEO and corporate management, and as chairman of the board of ABB in Germany. Sune Carlsson has decided to pursue other professional interests now that the segment enters a new phase of development.

"On behalf of the company, I would like to express our gratitude for the excellent contributions of my two colleagues, who have been instrumental in making ABB what it is today," Mr. Lindahl said.

The new ABB Group Executive Committee, with Goran Lindahl (53) as president and CEO, will be made up as follows:

Chief Financial Officer, Renato Fassbind (43), who was appointed CFO and a member of the ABB Group Executive Committee in 1997.

Power Generation will be headed by Alexis Fries (43), who as head of the Asia region has been a member of the ABB Group Executive Committee since 1993. The segment, basically unchanged in scope, is one of three top global providers of power generation for utilities, industries and independent power producers. In pro forma figures reflecting results at year-end 1997, Power Generation had orders received of close to $10 billion and employs more than 41,000 people.

Power Transmission is a new segment. It will be headed by Sune Karlsson (52), who in early 1997 joined the ABB Group Executive Committee as head of the Power Transmission and Distribution segment. The new segment comprises mainly the high-voltage part of ABB's transmission and distribution systems with a leading position in the refocused transmission markets. In pro forma figures reflecting the year-end 1997, orders received exceeded $6.5 billion. Power Transmission employs some 35,000 people.

The new segment Power Distribution, also headed by Sune Karlsson, will be a major force in a growing, increasingly deregulated and highly competitive distribution market. With orders received exceeding $2 billion on a pro forma basis year-end 1997, it has some 15,000 employees.

Automation will be headed by Jorgen Centerman (46), a new member of the ABB Group Executive Committee and currently business area manager for Automation and Drives. The new segment will group ABB's activities in process automation and control systems, where the company is the world's top supplier. On a pro forma basis end 1997, Automation had orders worth around $6.4 billion and 34,000 employees.

Oil, Gas and Petrochemicals will be headed by Kjell Almskog (57), who joins the ABB Group Executive Committee after serving as country manager in Norway as well as business area manager of Oil, Gas and Petrochemicals. This new segment represents one of ABB's most rapidly expanding activities. As one of the few truly global players in its field, it has orders on a pro forma basis at year-end 1997 exceeding $3 billion and more than 8,000 employees.

Products and Contracting will be headed by Armin Meyer (49), who as head of the Power Generation segment has been a member of the ABB Group Executive Committee since 1995. The new Products and Contracting segment currently has close to 57,000 employees and orders received of more than $7 billion on a pro forma basis end 1997. The segment provides a framework for expansion of ABB's manpower-intensive contracting and services business as well as some key industrial products.

Jan Roxendal (45) continues to head Financial Services as the third new member of the ABB Group Executive Committee. This segment retains its present scope with a strong focus on financial sales support for ABB's industrial activities, as well as the treasury functions. Financial Services employs some 900 people.

The 1998 full-year results will be shown according to both the new and old segment structures, company officials said. They said the ABB Group's performance outlook remains unaffected by the changes in the Group management structure.

ABB's U.S. activities, headquartered in Norwalk, Conn., had orders of $6.5 billion in 1997 and employed 22,000 people at manufacturing and other facilities in 41 states http://www.abb.com/usa.

In total the ABB Group - with business segments, country organizations and Group activities such as Research and Development, Information Systems, Management Resources, Real Estate and Corporate Staff - employs some 219,000 people around the world. In 1997, ABB had orders of about $35 billion.

In the United States, ADRs for shares in ABB Group's parent companies, ABB AB and ABB AG, are traded, respectively, on the NASDAQ exchange (ABBBY) and in the OTC market (ABBGY).

    CONTACT: William Kelly, 203-750-2246
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