ABB to discontinue production of transformers in St. Louis
ABB has announced a strategic realignment of its global transformer manufacturing, engineering and service footprint.
ABB is cutting 100 jobs from its Secheron plant in Geneva and shifting production to a site in Poland, the company said on Monday according to Reuters.
The company also announced that it would discontinue production of transformers in St. Louis, stltoday.com reports. 120 employees at its plant would lose their jobs.
According to a company statement, in the United States, ABB will consolidate its power transformers manufacturing footprint by investing in its South Boston and Crystal Springs units and discontinue production at its unit in St. Louis, Missouri, which will continue to focus on engineering and service activities. In addition, ABB will establish new traction transformer manufacturing facilities at its South Boston unit to serve rail industry needs. ABB will also expand its medium and large power transformer factory in Varennes, Canada, to better serve the Canadian market.
In Europe, production of traction transformers will be consolidated in Lodz, Poland, which will become the main manufacturing hub for rail customers in the region. ABB plans to continue manufacturing prototypes and smaller quantities at its facility in Geneva, which will remain the center of excellence for this technology and be an innovation center for energy efficiency and sustainable mobility solutions. Capacity will also be expanded for power and distribution transformers at the Lodz unit, bringing economies of scale and making it a major transformer hub for ABB.
In Asia, Middle East and Africa, ABB will expand its traction transformer operations in India, supporting the government’s ‘Make in India’ initiative. The company will also invest in upgrading its Datong traction transformer facility in China to improve efficiency and meet growing demand. Earlier this year, ABB inaugurated a new traction transformer facility in South Africa, in line with the government’s local procurement requirements.
“This footprint optimization will enhance competitiveness and strengthen ABB’s global leadership in transformers by better aligning the business to reflect changing market dynamics,” said Claudio Facchin, President of ABB’s Power Grids division. “The realignment is part of our ‘Power Up’ transformation program and ABB’s Next Level strategy.”
According to stltoday.com, although ABB’s Power Grids division is the company’s largest, it is also the least profitable. Power Grids, which also makes high-voltage cables and electrical substations, has suffered a 9 percent drop in orders this year; its profit margin of 9.9 percent lags ABB’s overall margin of 12.5 percent.