ABB to restructure transformer business

By Jack Smith August 15, 2005

ABB announced that it will initiate restructuring activities within its North American transformer business unit. The efforts are part of a global effort to strategically realign the transformer business for profitability and service to its customers.

Several North American operations will be affected by the changes. The Guelph, Canada facility will be closed. The St. Louis facility will expand to serve a large portion of the repair business from Guelph. The Jefferson City, MO operation will expand to serve a portion of the lower range of the liquid substation product line currently manufactured in the South Boston, VA facility.

“The decision to close the Guelph operation comes as the conclusion to many years of effort to return the operation to profitability. Over the past 12 months, in particular, the Canadian Auto Workers, the management team and our customers have all worked to turn Guelph around. Unfortunately, the business outlook is that Guelph will only continue to lose money,” said Gerry Schepers, Senior Vice-President for ABB Transformers. “We sincerely appreciate everyone’s effort and support.”

The Guelph, ON operation is expected to lose 15 million CAD in 2005. The business was temporarily closed in mid-2004 and then reopened based on an agreement to pursue all possible options for creating a viable situation. The CAW, represents approximately 200 of the transformer plant’s more than 300 employees. The union’s contract expires on January 31, 2006. The Guelph plant, which serves the North American market, produces small power transformers and repairs large power transformers.

“The restructuring plan in North America emphasizes the strategy to improve performance throughout ABB transformer operations. These actions, including the expansions in St. Louis and Jefferson City are clear examples of this emphasis,” Schepers said.