Last week, (just after I had clicked the latest eNews out into cyberspace) ABB surprised everyone when it replaced CEO Joergen Centerman with Chairman Juergen Dormann. Why Centerman made an abrupt departure was not disclosed - Dormann insisted that the reasons were "pretty complex".

One ABB insider shrugged, "The Swedish social-experiment called ABB has failed. I still wince at the thought of all the management-concept discussions that we had to suffer through."

ABB is still in the throes of a restructuring phase which is expected to cost $ 500 million and was started last year. This has cut 12,000 jobs and supposedly streamlined operations, aiming to give the company a consumer-oriented strategy. The revamping was expected to be finished in December.

Under Dormann, ABB's disposal/restructuring program will pick up speed. For years ABB has tried to help their products & services by providing financing (to customers who don't have the capital), while also doing a value-add based on that financing. When a sizable order was placed with ABB, the typical follow-up question was, "would you like financing with that?" (ala the McDonald's mantra; "would you like fries with that?").

But ABB is NOT a bank, and over the past few years they've clearly demonstrated this by losing their shirts. Also, auditors are beginning to look more closely at "creative financing packages".

Jurgen Dormann has a long and successful history of shedding non-core business elements. ABB's financing arm fit this category, so it was sold to GE for $2.3b as part of an effort to shrink the hole in the ABB balance sheet; the cash inflow will reduce debt of $5.2b to $ 2.9b. Next up will be the Oil, Gas & PetroChem business.

Mr. Dormann said the company is on track to dispose of its Building Systems unit and real estate in Switzerland. But ABB isn't considering selling any large units or even whole divisions in addition to that.

Pinto Point: Centerman was always in over his head and he couldn't pull off the turn-around that was expected. The general impression is that Dormann is straight forward and very results-oriented. He'll quickly get rid of ABB's old matrix structure and Byzantine-like organization. The management survivors had better get their acts together, and fast - or Dormann will eat them for lunch.