GE to Invest More Than $2 Billion in R&D, Technology and Financial Services Partnerships in China
by Business Wire
General Electric Company (NYSE: GE), the world’s premier technology and infrastructure company, today announced it plans to invest more than $2 billion through 2012 to expand its innovation and customer support capabilities in China and to create new technology and financial services partnerships with leading Chinese companies.
GE Chairman and CEO Jeff Immelt announced in Beijing today that the company plans to commit $500 million to enhance China R&D capabilities and establish new Customer Innovation Centers to better serve the west, north, central and south China markets. He also pledged to invest more than $1.5 billion to fund new joint ventures with Chinese state-owned enterprises in key high-technology sectors.
“China is the world’s fastest-growing market for aviation, energy, transportation, healthcare and financial services,” Immelt said. “The commitments we are announcing today will bring GE’s technology and innovation strengths to help meet these growth challenges in China. These initiatives will create jobs in both China and the United States.
“The new joint ventures are in line with our strategy to build partnerships in China to support our business here and globally,” Immelt said, “and our Customer Innovation Centers will add more than 1,000 new R&D, marketing and application engineers to work more closely with customers and partners to advance development and delivery of GE products and technology.”
The Customer Innovation Centers will be established in six cities, with the candidate cities for the first phase including Chengdu, Shenyang and Xi’an. The new Centers will be closely tied with GE’s current R&D activities in Shanghai, Beijing and Wuxi to better meet the needs of the Chinese market. The Innovation Centers will focus on product development, engineering for applications, sourcing support and delivery in key development areas for China such as rural healthcare, renewable and clean energy, smart grid, energy-efficient lighting, rail, and aviation.
Immelt also unveiled a series of partnerships with Chinese counterparties ranging from locomotive propulsion, rail signaling, smart grid technologies, power distribution and metro solutions.
The deals include:
- A 50/50 joint venture with Wuhan NARI Co. Ltd, owned by China’s State Grid, to manufacture and market grid monitoring and diagnostics products;
- Joint acquisition with Shanghai Electric Power Co., also owned by State Grid, for a controlling stake in Shanghai Tianling Switchgear Co., a Shanghai-based green power distribution equipments maker;
- A framework agreement to form a 50/50 joint venture with Chengdu Locomotive & Rolling Stock Works, a company owned by China South Locomotive and Rolling Stock Corporation (CSR), to develop propulsion system sets, sub assemblies and parts for diesel locomotives;
- An agreement to enter into a 50/50 joint venture with Beijing National Railway Research & Design Institute of Signal & Communication (CRSCD) to supply railway and urban transit signaling systems.
Such partnerships add to GE’s recently announced agreement with Harbin Power Equipment Company for a joint venture to manufacture and market land and off-shore wind turbines in China.
GE also confirmed the start of construction for the manufacturing facilities for a diesel-engine joint venture with CSR in the coastal city of Changzhou. This agreement was first announced in late 2009.
Earlier this month, GE and Chongqing Bosen Electric agreed to initiate joint venture discussions to provide electrical-power solutions for metro and urban rail systems in China’s west.
Mark Norbom, President and CEO of GE Greater China, said: “These commitments represent GE’s confidence in China’s long-term economic prospects. The execution of our localization and partnership initiatives will bring technology and expertise to China while at the same time enhancing our ability to compete in this highly competitive yet dynamic market. It is a true win-win.”
GE (NYSE: GE) is a diversified infrastructure, finance and media company taking on the world’s toughest challenges. From aircraft engines and power generation to financial services, medical imaging, and television programming, GE operates in more than 100 countries and employs about 300,000 people worldwide.
GE started doing business in China in 1906. Now all GE businesses have set up operations in China with 36 wholly owned entities and joint ventures in manfuacturing, service and R&D. GE employs 14,000 people in China.
Caution Concerning Forward-Looking Statements:
This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital Corporation’s (GECC) funding and on our ability to reduce GECC’s asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; changes in Japanese consumer behavior that may affect our estimates of liability for Grey Zone claims; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, network television, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation; strategic actions, including acquisitions, joint ventures and dispositions and our success in completing announced transactions and integrating acquired businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.