We need to become leaner as fast as possible given the economic climate

Joergen Centerman, ABB

Europe's biggest industrial engineering firm has now cut its full-year forecasts for the second time as the economic slowdown depresses new orders.

Fears are also mounting over the rising number of asbestos claims being filed against the company, after it reported a 34% increase on an annualised basis.

ABB, formerly Asea Brown Boveri, has seen its shares lose 72% of their value this year.

Restructuring plans

Chief Executive Joergen Centerman said the company would speed up plans to cut 12,000 jobs: "We need to become leaner as fast as possible given the economic climate."

About 2,000 employees have already left the company since June when the programme was announced, leaving about 160,000 staff.

"By taking more of the planned [$500m] restructuring costs earlier we will reduce earnings now, but we build competitiveness and gain productivity improvements that pay back over time," he added in a statement.

The third quarter net profit slumped to $289m (�203m), as sales rose 9% but orders fell 3%.

"It is impossible to make a meaningful outlook [for 2002]," said Mr Centerman.

Asbestos claims

The company's new claims for asbestos liabilities from former US units were up 34% year on year, compared with 39,000 in 2000.

"It is not yet possible to determine whether the increase in claims is a consequence of an accelerated filing of future claims or if it represents a long-term trend," ABB said.

Mr Centerman added that an increase in provisions could never be ruled out.