For a corporation long touted as the model for European business, ABB's past few years have been humbling. In a bitter public battle last year, its founder-chairman Percy Barnevik was forced to return more than $60 million (Rs 266 crore) of his $80 million (Rs 368 crore) pension benefits (he stepped down in 2001), the company reported losses for a series of quarters and nearly went bankrupt, and early this year it took a $1.4-billion (Rs 6,440 crore) hit in asbestos charges relating to its US subsidiary Combustion Engineering. One man who's survived-indeed, thrived-through it all is Dinesh Paliwal, global head of abb's automation technologies and member of the group executive committee, which oversees the recent round of restructuring at the engineering giant. An IIT engineer, the 45-year-old Paliwal is seen by many as the heir apparent to CEO Jurgen Dormann. Paliwal, also on the board of ABB India, was recently in Mumbai to meet with customers, and took time off to speak to BT's Roshni Jayakar. Excerpts from an exclusive interview:

Early this year, Swiss industrial daily Dagens Industri reported that you were in line for the top job at ABB. Are you?

That was good to read in the papers (laughs). I got several phone calls and my reaction was, "I also read about it." I have never planned what I would be in ABB next year or two years later. Not that I am not a strategic thinker. I do strategic thinking in my work, but not about my next position.

How is the reorganisation of ABB last year panning out? Are you beginning to see results?

It is working out better than we planned. I did expect that we would move forward. But we have seen amazing enthusiasm and motivation worldwide. We are way ahead of the plan, which means we are better than on track. We wanted to take $800 million (Rs 3,680 crore) cost out worldwide, not just by taking people out but by changing the way we operate, the way we do supply management and so on. We track our sap system (business system) on a daily basis against the plan (action we have decided). That is the task of the executive committee of which I am a part. Every month we have a global teleconference with the top 19 countries to review if there are any stumbling blocks and how we can help. To be honest, for the first time in many years, the organisation is seeing something very decisive that is putting it on a stronger, more solid footing.

''Companies are challenging us to look at the asset base and give additional productivity gains''

As the head of automation technologies at ABB, how do you see industrial it changing manufacturing in the future?

If you look at manufacturing worldwide, we have had tremendous shop-floor process automation, and then we've had business systems like saps of the world. These are two worlds that are not connected. Simply put, industrial it is the enabler connecting the manufacturing world to the business world in real time. Once you have connected the two worlds, you have accurate information as it happens in real time. And decision-making by CEOs and CFOs is that much better. Besides, it means millions of dollars of savings for customers. That's a big leap forward and to my excitement, industrial it has not only been validated by our own customers, but giants like Microsoft, Intel, and Accenture. These three companies and ABB have come together to embrace the idea of industrial it and take it forward. The alliance enables shop floor to top floor connectivity across a global network of plants to enhance business visibility, decision-making, and financial performance.

ABB was the pioneer in industrial it, but now competitors like GE and Siemens are catching up. How do you plan to stay ahead of the pack?

Our R&D pipeline is rich. I sit on the steering committee of corporate R&D and we like to see ideas for 2005, 2006, 2007, and 2008. For example, Caterpillar is designing engines for 2008, 2009, and 2010. ABB is working with them on that design. This is how we work in our major industries-marine, paper, metals, chemicals, and petroleum. We work with trendsetters in our automation lab.

Incidentally, the first automation lab outside of Europe and America is being opened in Asia and that's in Bangalore. Our leading customers are encouraged to join the think tank. On this trip, I am visiting some key customers who are visionaries and challengers and asking them, "Why don't you join in, look at what we are doing and actually force us in areas where you want to be five years from now, so that we continue to give you the competitive edge?" Why are we doing that? Because our customers' customers are thinking perhaps ahead of our customers and we would like to bring that input into our product structure. I will give you an example; the movies Mummy and Tomb Raider exclusively used ABB machines and motors. We worked with these film producers to find out what is most important for them to make these thrillers. They said noise reduction. So, we work with our client base to understand their customers' requirements. We capture the unique requirements of these end-customers in our think tank. That is the future of our industrial it.

What kind of emerging opportunities do you see in your business?

From the industrial revolution point of view, there's biotechnology. Then, there is the next generation of standard manufacturing automotive industry. As we speak, in the United Kingdom, we are working with some development companies to test an electric car that can do 240 km an hour using ABB driver motors. In the automotive industry, if you order a custom car, it takes four to six months. Nearly 75 per cent of that time is in information connectivity. Again, we have done a pilot, whereby we can cut that time from four months to four weeks. Another trend in the manufacturing industry, which is capital intensive, is not to go for brand new capacities. Companies are challenging us to look at the asset base and give additional 5 to 10 to 15 per cent productivity gains, over and above what they are doing. Which means optimisation of asset base, or what I call lifecycle trend.

How do you see industrial it impacting the shift of global manufacturing to countries like China and India?

I am all for manufacturing moving to China and India. We have aggressively moved our manufacturing base to countries where we find the highest productivity. Remember, I don't call them lower-cost countries. Industrial it will allow people to make decisions based on even more intelligence rather than just labour cost. During this trip, we have announced two focused factories in India. These will be the only factories in the world, mass-producing for the world. One is a high-voltage machine factory in India at Vadodara and another is for wind turbines. I have one clear philosophy, I don't believe anymore in ''Made in Finland'', ''Made in China'', ''Made in India'', or ''Made in Germany'' tags. To me, if you have the same industrial it or ABB technology and the same quality structure in place, then it's "Made by ABB". That, to me, is the biggest significance of this.

Our customers love it. Now they are starting to see the value of virtual factories or global factories. Five years ago, it was very difficult to convince Indian customers or Chinese customers to buy products made in their own country. They used to say, ''Can we have imported motors, machines and control systems?'' Today, they are convinced that our philosophy of global focused factories works. The second philosophy for me is to never move second-rate technology to high-productivity countries. Whenever we set up a focused factory, in China or India, we take the best technology we have.

Coming back to you, what were the right moves you made that got you this far?

To me, delivery is the key. If you don't deliver, you don't have a future. But delivery to me goes beyond numbers to developing people-coaching your peers or your subordinates. I spend time on the personality side of our people. It has been a healthy journey both for ABB and me in terms of challenges given to me. I have exceeded them. Like my father used to say, I believe in karm. I don't worry about fal (reward). If you do your work, the reward will come automatically.

How does the head of ABB's automation technologies unwind?

I spend time in the garden, (I am a gardener), or just (laughs) play antakshari with Indian friends.