We meet Peter Voser in the meeting room next to his office at the headquarters of ABB in Zurich Oerlikon. Born in Baden, Voser has been chairman of the technology company since the spring of 2015.
After stepping down as CEO of Shell, he intended to give more time to his private life and family. But Voser is enthralled by the job at ABB – he was Chief Financial Officer there 15 years ago, and his father and father-in-law once worked at the predecessor company BBC.
You once did a commercial apprenticeship at theAargauische Hypotheken- und Handelsbank, and today you are one of the most powerful business leaders. Would such a career still be possible today?
Peter Voser: Even today a commercial apprentice can one day become a CEO, although the world today is a completely different place compared with the days of my own apprenticeship. People today have to keep learning throughout life. You no longer complete a single apprenticeship at 19, but do other training, for example at 35 and 50, because everything is changing so quickly. But I still consider the combination of practice and theory to be the ideal form today. There is nothing better than the Swiss apprenticeship.
But the apprenticeship is becoming more academic, and many international companies prefer to hire university graduates.
There is also a countertrend. Banks and consulting firms likeMcKinsey are changing their recruitment practices. Pure academics are less in demand. Anyone who founds a start-up at 19 and falls flat on his face twice is better equipped today than someone with an excellent degree but zero practical experience. It’s no longer enough to have studied in Harvard, Stanford or St. Gallen. The person who has most success is the one who can apply theoretical knowledge. The CVs that are sought after are those where someone has been to school, then spent a few years in casual jobs and then trained or studied again.
Switzerland as an industrial center feels the way the world is changing particularly strongly. What do you think about the 1300 job cuts that General Electric announced on Wednesday for Alstom Switzerland?
I’m sure you understand that I don’t comment on the business decisions of a competitor. But it shows that Switzerland is under pressure as a center for industry.
What does Switzerland have to do to ensure that it doesn’t lose its industry?
Switzerland has shown over the decades that it is able to respond to global competition. The promotion of entrepreneurship was coupled with a good training system. I expect politics to create the conditions for things to continue in this way. But unfortunately the opposite is happening: Regulations and their complexity are steadily increasing. The framework conditions must be improved; the corporate taxreform III has to be enacted, so that Switzerland becomes more attractive for foreign companies again. We have also done ourselves no favors with certain political decisions, such as the mass immigration initiative. We should be more careful here – and make a clear commitment to the bilateral path with the EU.
125 years ago, Messrs Brown and Boveri founded BBC, the predecessor company of ABB. You will celebrate this jubilee in grand style this year. Would the two gentlemen still choose Switzerland today – or maybe Silicon Valley or even China instead?
The two men were visionaries. They thought in the long term. And in the long term, I’m convinced, Switzerland has great advantages.
After your election to Chairman of ABB, you spoke of the «Return of the Prodigal Son». Your father was head of assembly at BBC, and your father-in-law also worked there. Is the company a family destiny, as it were?
(Laughs) Yes, it is a little like that. What many people don’t know is that I first worked for BBC already back in 1979 -between my apprenticeship and the university of applied sciences - in the finance department. My boss at the time by the way became a wellknown business leader in foodstuffs and technology...
Coop and Swisscom chairman Hansueli Loosli?
Yes, he headed this department at the time.
What kind of ABB have you found now after your return?
Today ABB has a strategic focus that is more clearly focused, in the broadest sense, on the energy transition and industrial, digital automation. Here the company can cover all key areas. We now want to put this strategic focus on sustainable growth markets into practice with our «Next Level Strategy». We aim to improve efficiency and restructure the organization.
Does «restructure» mean job cuts in particular?
ABB is in the midst of a comprehensive transformationprocess. In the second phase of implementing the Next LevelStrategy, we are concentrating on the reorganization with fourdivisions and on a review of the Power Grids Division. ABB today is an entity that has grown up historically and would never have been constructed in that way if it had not grownrandomly the way it did through acquisitions and divestments. At present, we have 68 service centers and 260 research and development departments worldwide. That’s inefficient and expensive. We are now reducing this number. As already announced on Capital Market Day in September, there will be adjustments at the jobs level worldwide as part of the program to increase productivity. We aim to implement as many of these adjustments as possible through the natural fluctuation of about 5000 jobs a year.
What does that mean for Switzerland?
Switzerland is an important pillar. This is where our headquarters are; we have a strong position here. Switzerlandis strong in the field of research and development - and for products where the value added and thus the margin is high. For example, Switzerland already introduced an innovative system in the rail segment early on, i.e. before the lifting of the minimum euro exchange rate: namely, an extended workbench between Switzerland and Poland. This means that certain parts are produced more cheaply in Poland, while in Switzerland the «brain», so to speak, is integrated in the product. The homework has already been done here.
So ABB employees in Switzerland don’t have to be worried about their jobs?
I would not put it like that. The homework has been done, but there will be new challenges to come. The world is constantly changing so much that it is unfortunately not possible to give any guarantees.
Will ABB continue to invest in Switzerland?
Definitely. For example, in research and development and in the improvement of productivity. But at the moment I cannotimagine that we would build a new large factory in Switzerland.
ABB has merged two divisions to form the new Power Grids division, which includes all electrification products. Why are you now considering selling off this segment,which is important for ABB Switzerland?
We are global market leaders in this segment. Part of this division had not been well managed in the past few years, and we have now corrected that. Now we are considering various options: Do we continue to do it ourselves? Do we sell the business? Or do we even acquire another company? These arenormal strategic questions.
When will the decision be taken?
I’m not going to name a date, because we are taking the time that is necessary. You have to consider what it involves: We are building a vision as to how the business will change. What is happening geographically? How is the competition behaving? Where are margins coming under pressure? What will the situation be in 2025?
ABB profits from investments in the energy transition. The oil price has now fallen dramatically. How much will that affect you?
Fortunately the links between investments in sustainable energy and the prices of conventional sources of energy are becoming steadily looser. The fall in the oil price last year hasnot led to lower investments in alternative energy because the transition has to come sooner or later. However, we generateabout ten percent of our sales in the oil and gas sector. Orders here have declined.
As the former CEO of Shell, you know the market. Will the oil price remain low?
A low oil price is nothing new; we already had that in 2009. It’s a question of the balance between supply and demand. But it is also about investments in technology. They have to come at some time, but at the moment they’ve been put on the back burner. I don’t expect the oil price to rise before the end of2016. If there were to be a global economic recovery at the same time, then the oil price would also rise sharply because of the strong demand.
What impact does the weakness of China have on your business?
China has to solve economic problems and regulate its energy supplies at the same time. That’s a huge challenge: Domestic consumption should be increased, the infrastructure has to be improved, and coal-based energy has to be replaced by alternatives. What China is doing is right in the long run. But we have to adjust to the fact that this change will have its ups and downs, and the days of steady growth are past. At the moment, the demand in China has fallen in general, and that has an impact on all market players.
The desire for the energy transition seems to have faded somewhat, especially in Switzerland.
In Switzerland, the decision in favor of the energy transitionwas rather hasty and emotional. But in the long run it’s the right decision, just as it’s right to let the existing nuclear power stations keep running as they are. But look at the electricity segment: Here there are already competitive products from the alternative sector, from electric cars to new trains.
A lot has to be subsidized today to ensure that it works.
The energy transition should happen without subsidies in the long run. Politicians should be just as little involved in determining the technology, but they should set the framework conditions, such as how high CO2 emissions may be. Or they should facilitate investments in infrastructure projects, for example in high-voltage power lines, because we need a reliable and more capable grid. Even though, as a freemarket minded person, I find that such interventions go against the grain.
That’s the contradiction with many advocates of the free market: If it’s in their own interest, state intervention is ok.
That’s true. But ultimately I’m a pragmatist and I want a solution. That’s why I will never go into politics (laughs). But sometimes you have to allow supporting measures to bring about certain changes. But I would set an end date for any intervention.
The WEF this week in Davos will be devoted to «Industry4.0». What do you expect?
First of all, the WEF is a wonderful discussion platform. For a few days, Switzerland is the center of the world. That’s stimulating and positive. As far as «Industry 4.0» is concerned, you always think immediately of job losses. But the question is how we create new jobs with technology, and how we have to reform our education system so that life-long learning becomes a matter of course and people can take on jobs that cannot be done by machines.
Will there not be people who don’t meet the requirements,however well trained they are, because they are notintellectually suited to higher jobs?
These fears also existed in the last industrial revolution. But with innovation, new business models and new productionprocesses we created jobs. I’m confident that this will also be the case now. At the WEF, by the way, we will also present our collaborative robot YuMi, which is a perfect example of what the collaboration between human and machine may look like.