GE Plants Deep Local Roots in India

In a remote eastern corner of the northern state of Bihar in India, 600 miles south-east of Delhi, GE’s factory in Marhaura will house its locomotive project – GE’s centerpiece of its $200 million investment. Government of India’s $2.5 billion order for 1,000 locomotives over 11 years is one of the largest deals ever for GE’s transportation unit, and its biggest order ever in India. The factory is a joint venture with state-owned Indian Railways that invested $15 million. The plant will employ about 400 workers and is slated to begin assembling locomotives late next year.

To provide housing for workers that GE will recruit from other parts of the country, the company is building 100 residential units near the factory site. The company will also work with local officials to try to streamline bureaucracy to widen and straighten roads to ensure it can get materials to the site.  “There is a strong trend toward economic nationalism all over the world,” CEO, Jeff Immelt, said in February in a letter to shareholders. He added that the company could not depend on new trade deals to ease global commerce, but must scatter production all over the world.

locomotive

John Flannery, who once ran GE’s India business, and who will take on the role of CEO in August when Immelt retires, says, “What works in Milwaukee doesn’t necessarily work in Mumbai.”

The Wall Street Journal says: A localization strategy requires a deft political touch. GE maintains that overseas investments aren’t coming at the expense of U.S. workers. The engines for all 1,000 locomotives to be assembled in Marhaura, will be built at GE’s Grove City, Pa., plant.

GE’s factory complex in the industrial city of Pune, in the state of Maharashtra, has trained a cadre of skilled workers in an automated facility, and this facility is expected to produce about 30% of the components in the locomotives to be assembled in Marhaura.

 

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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