ABB's Service offering extends well beyond maintenance

A publication for the employees and families of ABB in North America

An interview with Kevin Kosisko, region function manager, Service, North America

ABB rolls out new Ombuds program

Grand opening of new ABB Service facility in Dorval

ABB builds strong and lasting client relationships by delivering solutions and support services that exceed expectations.

Enrique SantacanaPresident and CEO ABB Inc.

what’s inside:

www.abb.com

Greetings,

As we work our way through the recession, businesses across the entire economy are looking for ways to boost revenues in the face of flat or declining demand. One way to do that is to sell more to existing customers, in particular, services to support the products they already own.

ABB’s service offering extends well beyond maintenance of our own products and systems to include Reliability Services and complete outsourcing of all the maintenance activities in industrial facilities. Like our focus on wind power and rail transportation, it is a strategic initiative here in North America, with a dedicated team charged with developing the business.

Service also offers great potential for added revenues in difficult market conditions as customers look to trim costs. While product purchases may be put on hold, customers will look to extend the life of the assets they already have, and service is vital to any asset management strategy.

It is fitting, then that this issue of Spirit focuses on service. The recession may be nearing an end, but we are still a long way from a full economic recovery. In the meantime, service represents both a cost control strategy for our customers and a growth strategy for ABB. I encourage everyone to consider how service can complement our existing product and system offerings, and to work to develop service as an integral part of our approach to customers.

Analytics Service: High Performance Team targets growth

2 | ABB Spirit Newsletter 2009

Kevin Kosisko, region function manager, Service, North America, recently spoke with Spirit about ABB’s Service business and growth opportunities.

Kevin began his career in automation, control and power with Bailey Controls Co. 21 years ago. After ABB’s acquisition of Elsag-Bailey, he held various roles in Automation and Robotics, most

recently managing the project business for Process Automation in North America. He moved into his current role in 2006, and is based in Houston, TX.

Why is it important for ABB to have a Service organization?Service is critical to ABB’s success. Without a world-class service organization we cannot continue the positive momentum ABB has experienced for the past few years.

How is service critical to ABB’s continued success? Service is a competitive differentiator. Increasingly, clients’ buying decisions include the lifecycle cost of owning the asset – where service is an important element. It’s like buying a car. Most dealerships now highlight service and even introduce the service manager during the sales process. We are doing the same.

Service is a steady performer. In 2008, when ABB began to feel the effects of a slowing economy, service had a record year in orders and profitability, topping $1 billion in North America for the first time. In 2009, service continued to grow in the Power and Automation sectors. With the size and age of our installed base, we may see growth for many years to come.

Service builds strong and lasting client relationships. Service is on the front line of most of our client relationships. Being responsive, professional and delivering solutions with real value are critical to maintaining and improving those relationships.

What are the Service business greatest strengths?To be successful in service you must have good people.

At ABB, we have the best people in the industry. They have a depth of knowledge that is second to none, and can travel at a moment’s notice to take care of client issues. We also have a safety record in service that is best in class.

In addition, we have a suite of service products that focuses on improving client asset utilization, reducing overall maintenance cost and increasing productivity that differentiates us from our competition.

Finally, we have a large installed base that will require repair, remanufacturing, and upgrading. We’ve invested in growth initiatives to capitalize on this.

What are the challenges that Service faces in North America?The biggest challenge is balancing investment in growth with cost control. Service is not immune to economic downturns, especially protracted ones. We’ve placed cost controls on non-client related travel, internal meetings, and so forth. We’ve repositioned investments to focus in areas of strong growth potential, such as Houston and the Gulf Coast. In other areas and businesses, we are reducing costs and adjusting business size to cover projected market needs.

What role does Service play in the concept of One ABB? We all need to find ways to create more value for our clients. The concept of One ABB is encapsulated in our client contact center where we handle close to 20,000 customer contacts per month for all five divisions for service calls, parts, technical support, and training.

Another example is improving service content for industrial clients. Often, we’ll have a robust service business with a client on our automation content and only a little on power content, or vice-versa. We need to leverage these relationships across divisions to provide a package of services that produces incremental value for clients. For instance, after Hurricane Ike hit the Gulf Coast in 2008, we mobilized resources from multiple divisions and provided services related to MV/LV gear, control systems, instrumentation and analytics to get key production sites back online quickly. We need to build this into our DNA as a service organization.

continued on page 3

Service maintains the positive momentum

ABB Spirit Newsletter 2009 | 3

Kevin Kosisko,

contnued from page 2

We have tremendous technical and process knowledge within the company to apply our products and services. This is a winning combination for service and ABB.

What are your top three short-term priorities?First, continue to maintain a strong safety record. Our people work in challenging environments daily, and it is critical to keep safety as our first priority.

Second, stay close to our clients. We’ve been promoting more interaction with key clients through small user group meetings to supplement our annual Automation and Power World event. Recently, we had meetings for our Power Products users in Raleigh, NC our Automation and Power users in Burlington, Canada and a Reliability Services workshop in Houston. These sessions were attended by close to 100 clients, which is good in the current cost control environment.

Third is targeted, strategic growth. We need to stay focused on prudent investments that will expand business now and position us for the economic recovery. Some key areas here are Mexico, Western Canada and the Gulf Coast.

What role will San Luis Potosí (SLP) play in the Service organization?Service was the first business to commit to using SLP. Our Reliability Services business hired 20+ people in SLP before the new facility was constructed to execute our outsourced maintenance management business for over 200 clients. It resulted in a more competitive cost profile and improved service levels. Now, each division has a service presence in SLP to serve North America as well as the local market.

In addition to the maintenance management business, we have repair, remanufacturing, engineering, technical support, finance support, supply chain support and consulting activities in SLP. This has also led to increased business and opportunities for service in Mexico.

What’s on your wish list for improving ABB’s Service culture?We can always improve responsiveness and look beyond our current task for opportunities to increase value for our clients. We also need to keep looking for ways to reduce cost and improve competitiveness.

To me, the most important cultural shift is to understand that promoting service starts during the initial sale, not after delivery. Our service capabilities can be a key differentiator for our clients in deciding between ABB and a competitor. We need to do a better job of moving this discussion upstream in the sales process, including proposing service more frequently as part of our products and systems offerings.

What single message would you like employees to take away from this discussion?Listen to clients and create solutions for their issues. ABB has best-in-class products, systems and services that span automation and power.

Let’s take advantage of it.

ABB plans growth in Houston

New Westchase facility reinforces commitment to Houston, Gulf Coast region

ABB announced last month that it will move its Houston, TX, Briarpark operations to a new facility at 3700 West Sam Houston Parkway on November 30.

“Houston and the Gulf Coast region are very important for us,” said Veli-Matti Reinikkala, head of Process Automation. “Our division’s global headquarters are here, and many of our top customers are located here as well, particularly in the oil and gas sector. This facility will support our continued growth in the Houston market.”

The Westchase facility will provide offices for 175 employees plus additional space for anticipated expansion. It will also house a training room and two permanent demonstration centers to accommodate functional examples of ABB’s products and systems such as field instrumentation and ABB’s 800xA Distribution Control System. In addition to its Houston offices, ABB has operations in Sugar Land, TX and a marine service center on the Houston Ship Channel. The company employs around 500 people in the greater Houston area.

4 | ABB Spirit Newsletter 2009

Devon Energy's steam generators, water and oil processing facilities in remote Alberta, Canada.

ABB in Calgary completes services upgrade in record time

ABB has a long-term service commitment with Devon Energy, and the teamwork and professionalism shown by the Calgary, Canada crew’s recent accomplishments at the facility serves as a prime example of ABB’s dedication to its service business.

“For ABB, service is far more than just showing up with a wrench. We develop close working relationships with customers over the course of many years,” said Sharon Arnott, specialist, Marketing and Communications, Service, Canada.

Producing oil from oilsands is a complicated process that requires well-coordinated control and monitoring systems. Devon has chosen to utilize steam assisted gravity drainage, or SAGD, technology to extract bitumen. SAGD involves injecting steam with natural gas into an underground reservoir of oil. As the thick oil heats up, it becomes less viscous and will flow from the reservoir. The gas lifts the oil to the surface. The oil is then pumped to a central processing facility where it is treated to remove water, gases and other undesirable elements. The separated water is then treated separately and when possible, recycled for use in the SAGD process.

In 2007, Devon commissioned a distribution control system from ABB. Over time, process additions and de-bottlenecking exceeded the capacity of that system’s capabilities.

“We needed to upgrade them to new hardware and software,” said Shawn Ledrew, account manager, Service, Canada. The upgrade, which was completed in October 2009, included the deployment of a System 800xA for plant wide control of four SAGD well pads, six steam generators on site, as well as process control for water and oil treatment facilities. The upgrade was commissioned on an extremely tight timeline during a weeklong scheduled outage at the facility. Thanks to the Service team’s well thought out planning, ABB exceeded expectations and had the system powered up and running in just two days.

“The client was extremely happy with the new system performance – both in speed and in expanded capacity,” said Shawn. He credits the project’s success to the professionalism and teamwork shown by Lead Engineer Andre Ammersbach, Automation Service Representative Brent Garand, SCADA Engineer Melanie Heikkila, and Project Manager Khaled Chaabani. Alex Ricardo, engineering manager in Calgary, SCADA Engineer Felix Choo, and Project Management Group Manager Dan Chartier also contributed significantly to the project.

“We had only six to eight weeks to build the system before it had to be shipped to the site,” Shawn continued. “At the site, during the outage period, a team of three worked in 12-hour shifts, going to 24-7 coverage during startup. The amount of work that was accomplished in that time was just incredible.”

Will ABB’s success at Devon Energy lead to future business?“Absolutely,” said Shawn. “Since the location in Alberta is difficult to reach, we believe it’s imminent that they will want remote diagnostics services, and eventually asset optimization, including integration of the ABB variable frequency drives to the 800xA system to further expand capacity.”

Sharon added, “Remote diagnostics will allow us to connect from Calgary to monitor the facility’s equipment and process control, saving travel costs and lessening safety risks to personnel.”

Four-and-a-half hours northeast of Edmonton, Alberta, Canada lies Devon Energy’s Jackfish oilsands facility. Accessible only by chartered plane or a long drive, the facility has its own airstrip and camps for contractors, construction staff and its operations staff.

Working to control costs for Devon Energy while exceeding the company’s expectations, the Service team in Calgary increased customer satisfaction while securing future business for ABB.

ABB Spirit Newsletter 2009 | 5

For the past three years, North America Process Automation Service has focused on continuous improvement across all businesses. It has driven unprecedented growth within Process Automation’s Shared Service organization, whose engineers support ABB’s Open Control Systems, Quality Control Systems, Drives and Analytics products.Guided by the High Performance Team (HPT) and employee support, Analytics Services revenues increased nearly 40 percent in 36 months, including 160 percent in the field service component – and it has not stopped there. Gross margin improved to more than 30 percent, and a business that once found profitability to be a challenge at the field service level has become profitable month-to-month and quarter-to-quarter. Higher volume has warranted the addition of four engineers to meet demand for services.

“HPT’s success is thanks to the efforts of Robert Mansell, Tom Maclellan, Nick Lehman, Barry Ngo, Nick Kenney, Adam Ramos, Ruben Topete, Stella Pangilinan, Dalia Villalobos, Jack Swartz, Bob Vogel, Kurt Potts, Beth Tanski, John Stewart and Michel McNicoll,” said Cahal Devlin, manager, Analytics Services, Process Automation, North America. “Without these individuals working enthusiastically toward a common goal, Analytics Services would not be successful.”

The path to successIn 2006, the Analytics Service business was targeted by ABB for investment as a North America Growth Initiative. “At the time, Analytics Service lacked a robust strategy and a method to improve customer satisfaction,” explained Cahal. “There was no single sense of purpose shared by all the profit centers. Although individual teams worked hard to meet customer needs, weak inter-departmental processes often caused delays and upsets.”

To resolve these issues and build a sustainable growth strategy, it was critical that all Analytics Service business units begin to perform as one. It was equally critical that this one business have its finger on customers’ pulse every day.

To accomplish this, Analytics Service recruited volunteers from each business unit to meet for a two-day summit in Cleveland, OH, in October 2006 – and the HPT was born. At the meeting, the team identified challenges and established individual roles. It then spent time learning a problem-solving technique called Cause and Effect Diagram with the Addition of Cards (CEDAC). CEDAC was developed in the 1980s as a vehicle to drive a culture of continuous improvement and has been used by a broad range of industries with tremendous success.

Very quickly, ideas for more effective communication and improved processes, tools and organizational structure began to flow. Each team member was an expert in his or her part of the business, and by the end of two days, more than 150 qualified ideas were put forward for testing.

The HPT left Cleveland excited and enthusiastic, with a commitment to meet for a few minutes every business day to review status. The team has met every day, 160 straight weeks, since that initial meeting.

Analytics Service: High Performance Team targets growth

Meeting discussions usually center on escalations: situations where a customer needs ABB to respond rapidly. Escalations can be anything from a need for an expedited proposal to a technical support query that needs immediate attention or a part that a customer needed yesterday. The team works to resolve the escalation quickly. HPT then determines whether the process that should have worked better, without the need for their involvement, can be changed to prevent future occurrences. These daily meetings create a dynamic environment for continuous improvement.

The customer knows bestThe HPT also initiated a new policy that impacts all employees who deal with customers. At the conclusion of every customer interaction, no matter how small, the ABB employee involved aims to ask the customer, “Are you completely satisfied with the support you received from ABB today?” If the answer is yes, they move on. If the answer is no, they raise a flag and the team gets involved.

“Without the personal involvement and daily commitment of the HPT, Analytics Service could not have achieved such significant growth in just 36 months,” Cahal said. “Since its inception, team members have assumed a role with two-fold responsibility – one, representing the views/ideas of peers from the department they work in to the HPT and two, representing the HPT defined resolution back to their peers – has made the team meetings even more powerful as forums for the resolution of issues and the creation of ideas.”

Through consistent messaging and closed loop learning, Analytics Service now operates as a single entity. Employees even entered into a friendly competition to choose a project name that best portrayed their goals; the winner was Fast, Accurate, Courteous, Timely Satisfaction (FACTS).

After only three years, FACTS continues to be the driving force behind continuous improvement in the Analytics Service business.

Process Automation

The High Performance Team

6 | ABB Spirit Newsletter 2009

ABB rolls out new Ombuds programWorking to ensure that 120,000 ABB employees perform to the highest standards of business ethics and integrity, as outlined in the ABB Code of Conduct, is a tremendous task. As part of ongoing compliance efforts, an Ombuds program was introduced on July 20, 2009.

“This is a great initiative from a company that cares for all its employees,” said Michel Primeau, ombudsperson, Canada. “It’s a great opportunity to work with my colleagues to help maintain and improve our integrity, ethics and compliance.”

ABB Ombudspersons are a resource for all employees. These individuals are experienced ABB employees, who are well known locally and who are not lawyers or HR people. Any employee can go to one of them with concerns about unethical behavior. Each issue will receive a serious listen and will receive expedited routing to the proper people for further investigation as well as an individual response.

Ombudspersons were selected through strict criteria. The resulting group brings a combination of decades of business experience and excellent communication skills to their task. “It is important to emphasize that the ombudsperson program was created to benefit all employees,” said Leticia Pérez, ombudsperson, Mexico. “It is serious program that will take corrective action where necessary in a professional and absolutely anonymous manner.”

The program is still in its infancy, with colleagues in only 11 countries appointed Ombudspersons. “Our biggest challenge is visibility to all our colleagues,” said Randy Niemeyer, ombudsperson, United States. “Locally, we have incorporated information about the Ombuds program into the Foreign Corrupt Practices Act training.”

Additional communications on Inside ABB will help get the word out on this important new resource for all employees.

Pam Storkel, ombudsperson, United States, sums it up. “Although the Ombuds program is very new, it’s clear that ABB is serious about stopping unethical behavior and protecting the employees who report it.”

For more information on the Ombuds program, watch this video from Corporate Communications in Zurich.

Contacting an Ombudsperson does not automatically initiate an investigation and each inquiry will be treated confidentially. However, concerns regarding Code of Conduct violations or breeches of the law must be reported (again, in confidence) to the ABB Compliance team.

To speak to an ABB Ombudsperson in North America contact any of the following:

CanadaGroup Accounts ManagementMichel Primeau 514-856-6278 michel.m.primeau@ca.abb.com

Process AutomationMichel Telmosse 403-806-3851 michel.j.telmosse@ca.abb.com

United StatesRobotics Mary Duke 248-393-4801 mary.duke@us.abb.com

Power Products/SystemsNeil Harsany 407-376-6331 neil.harsany@us.abb.com

Process AutomationRandy Niemeyer 614-818-6333 randy.niemeyer@us.abb.com

Automation ProductsPam Storkel 262-785-8643 pam.storkel@us.abb.com

MexicoPower Systems Leticia Perez 52 55 5329 4676 leticia.perez@mx.abb.com

Leticia Pérez, Ombudsperson, Mexico.

Did you know?– The installed base of ABB and ABB legacy high voltage breakers is approximately 250,000 worldwide.

– ABB is the world's largest automation services provider. – ABB Full Service helped transformed a customer's paper machine from being ranked last in the company globally to first.

– The world's two largest soft drink manufacturers use ABB's Reliability Services to improve productivity.

ABB Spirit Newsletter 2009 | 7

ABB Mexican Service organizationGustavo Sepúlveda named manager, service, Mexico, effective November 1.

In his new position, Gustavo will be responsible for developing synergies between the five divisions to improve ABB’s position in the Mexican marketplace, increase the effectiveness of the business, and satisfy Customer Service needs. Each of our company’s five divisions have operations in Mexico, offering equipment and systems, each requiring service and maintenance to assure the best and most efficient performance. In addition, customers require guidance and training to familiarize themselves with the benefits offered from the products they have purchased. Service will be crucial in this process.

“This is a very important challenge that I gladly assume because it will give me the opportunity to work more closely with every division to facilitate the efficiency of ABB’s businesses,” said Gustavo. “The Service organization will be important because it will allow us to focus on big project sales and to benefit from the support and post-sale businesses. These opportunities significantly improve ABB’s image with customers and generate new business.”

Gustavo Sepulveda, Manager Service, Mexico.

On September 17 more than 100 customers, guests and ABB employees were on hand for the inauguration of ABB’s service facility in Dorval, Quebec, Canada. The new, state-of-the-art installation provides service to the company’s Power Systems, Power Products and Turbocharger customers.

The event began with brief remarks from Greg Farthing, Sales and Marketing, Power Products and Systems;

New ABB Service facility in Dorval marks grand opening

John Caron, Service, Canada; Hans Bieli, local business unit manager, Turbochargers, North America; Jana Bogelic, regional director, Service, Eastern Canada; and Dorval City Councilor Robert Bourbeau. The presentations by ABB executives highlighted the significant increase in business volume through the years and the company’s ability to provide expanded Service offerings.

The presentations were followed by a ribbon-cutting ceremony and guided tours of the facility. The successful event highlighted ABB’s commitment to providing the utmost in service and strong customer relations.

“We are extremely proud of this new facility,” John said. “Not only is it a truly clean and modern facility that provides our employees with a very comfortable working environment and ergonomically designed machinery, but it will also significantly enhance our ability to meet the needs of our customers.”

September 17, 2009 ribbon cutting ceremony at the official opening of the new ABB Service facility in Dorval, Quebec, Canada.

“This decision to include Service as part of our portfolio puts Mexico in-line with Group’s One ABB strategy. In other words, we can be a united front to our customers and avoid the confusion of showing several faces.” Gustavo will continue in his current role, local division manager, Robotics, Mexico, and will report to Daniel Galicia, country manager, Mexico, Central America and the Caribbean, and Kevin Kosisko, region function manager, Service, North America, and will be based in San Luis Potosí, Mexico.

The entire installation has been designed with safety in mind and the equipment has been totally upgraded.

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nABB acquires Sinai Engineering Corporation

“This acquisition is aligned with our strategy to strengthen our footprint in Western Canada, particularly in providing engineering services to oil and gas and utility customers,” said Sandy Taylor, country manager, Canada. “Sinai Engineering’s expertise and customer focus will help our customers boost productivity and energy efficiencies while reducing costs.”

Mak Hakim, president of Sinai Engineering, added, “We are excited about joining a global engineering group renowned for its advancements in technology and innovation and commitment to sustainability. Our employees are looking forward to accessing ABB’s global resources to enhance the value and expand the scope of services we provide to our existing customers.”

Sinai Engineering is a consulting firm with a staff of about 30 people. Its customers include electric utilities, conventional and heavy oil, gas processing, pulp and paper, mining, pipeline operators, and independent power producers.

ABB has acquired the assets of Sinai Engineering Corporation to enhance its presence and capabilities in Western Canada.

Sinai Engineering has been providing engineering services in the areas of generation, transmission, and distribution of electric power since 1980. Its offerings include high voltage substations and transmission line design, generation and transmission system planning and analytical studies, as well as procurement and construction management.

ABB Inc.North America Corporate Headquarters 12040 Regency Parkway, Suite 200 Cary, NC 27518