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Troubled ABB has record loss
ZURICH, Switzerland (CNN) -- Troubled Swiss industrial engineer ABB posted on Thursday a record loss in 2002 as it paid for jobs cuts and asbestos lawsuits. Europe's biggest electrical-engineering company said it made a net loss of $787 million compared with a loss of $691 million in 2001. Analysts polled by Reuters had been expecting a loss of between $350 million and $550 million. ABB was once Europe's biggest challenger to General Electric of the U.S. following the merger of Sweden's Asea with Brown Boveri Corp of Switzerland, in 1988. But the company spent billions on acquisitions saddling the company with a mountain of debt, which almost led to its collapse in March 2002 as the global economic growth hit the buffers. The company has begun cutting 10,000 to 12,000 jobs in all the countries it operates in. "It has been a difficult year, but we put the worst behind us,'' ABB Chairman and Chief Executive Officer Juergen Dormann said. "We're putting the asbestos issue to rest and divesting non-core businesses." "Our core businesses are performing well. I'm confident we can deliver on our growth targets and return to profitability in 2003,'' Dormann said. The Zurich-based company cut net debt to $2.6 billion from $4.1 billion. It maintained its goal to cut total debts to $6.5 billion by the end of 2003 and $4.0 billion by 2004. Dormann, who became chairman in 2001 and Chief Executive in September last year, is not alone in trying to boost earnings, improve margins and cut debt at a time when many of its customers have slashed spending to cope with sluggish economic growth. Britain's Invensys and France's Alstom are also selling businesses to cut debt. "If we cannot get it right in the next 12 to 18 months, ABB has no grounds for existence,'' Dormann told Swiss television on Wednesday evening. Dormann, who is being paid four million Swiss francs, said the company expects group core operating profit to be up by more than 20 percent in 2003, from $336 million in 2002. The company plans to sell its Oil, Gas and Petrochemicals Division for about $1.5 billion and concentrate its energies on Power Technologies and Automation Technologies.
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