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ABB warns of weak profit and job cuts

ABB warns of weak profit and job cuts
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The Zurich-based engineering group ABB has cut its profit forecast and plans to eliminate 1,300 jobs to reduce expenses.

The company, which is one of the world’s biggest makers of electric motors and industrial robots, is blaming surging raw-material costs, but the unions challenged that. ABB said its net profit in the second quarter would be significantly lower and conceded there might be a net loss. The firm had seemed to be turning around after asbestos claims had taken it to the brink of bankruptcy. It has shed more than 40,000 jobs in the past two years and, after losing billions, made a profit of 460 million euros last year. ABB’s profit has been hit by higher oil and steel costs and an oversupply of transformers used in substations, power plants and trains. But a union spokesman blamed management. He said: “This is a major screw up. We are convinced that it is the result of bad management and once again the workers are paying the price.” Analysts cut their rating on ABB shares. One said “It’s disappointing and show’s the company’s operational business is not great, in a competitive environment. The stock finished the day down 6.8%.