Transcript General Electric

GE in France
Best in France Project Case
Study
15 December 2003
By: Ms. Candida Barbato, Mr. Juan Rodriguez Alvarez,
Mr. Jan Sorensen, Mr. Carlos Ojeda
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GE & GE Medical Systems
Division: Key figures
When did GE come to France?
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1950’s GE and GE Medical Systems about 20 years ago.
What's GE’s business in France and Overseas?
GE is a major international player in several different activity sectors:
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GE Aircraft Engines
GE Consumer Products
GE Financial Services
GE Industrial Systems
GE Medical Systems
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GE Medical Systems
GE Plastics
GE Power Systems
GE Transportation Systems
CNBC
Key figures
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World sales: 135 Billion USD
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French sales: 3 Billion USD
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Profits: 15 Billion USD
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Employees World wide: 360.000
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Employees France: 9.500
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Sector of activity: Conglomerates
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Competitors: Siemens, Philips, Toshiba, Alstom and others depending on the Business.
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Why did GE come to France?
GE’s approach to international growth
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Profiting new strategic or economic opportunities in new locations in terms of
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Technical leadership that expands margins and grows the installed base.
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Services acceleration that improves returns, competitiveness and customer’s
satisfaction.
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Enduring customer relationships that are unbreakable
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Resource reallocation to build positions in new markets.
Where else did GE (or will GE) consider going
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Germany (R&D), Belgium (lobbying opportunities) in Brussels, Low Cost Countries
(LCC), China (5 x 5 plan)
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Part of the production has been moved to Hungary (diversified services, technology
and manufacturing). This led to a decrease in the work force in France.
Why was France a key target location?
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Growth step towards the European market.
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Rationalize Engineering and Production for GEMS
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Partnership with Snecma (CFM International)
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Acquisition of Thompson Medical Division (Thompson CGR Diagnostic Imaging
division)
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GE Corporate Values (1/2)
Company values are a key variable in the management of GE work force
Respecting Always the Three Traditions of GE: Unyielding Integrity, Commitment to
Performance and Thirst for Change.
Passion for Our Customers
Measuring our success by that of our
customers…always driven by Six Sigma
quality and a spirit of innovation
Meritocracy
Creating opportunities for the best people
from around the world to grow and live their
dreams
Playing Offense
Using the advantages of size to take risks and try new
things…never allowing size to be a disadvantage
Embracing Speed and Excellence
Using the benefits of a digital age to accelerate our
success and build a faster and smarter GE
Living the Hallmarks of GE Leadership
Passion for learning and sharing ideas
Growth Driven, Globally Oriented
Growing our people, markets and businesses Committed to delivering results in every environment
around the world
Ability to energize and inspire diverse global teams
Every Person, Every Idea Counts
Connected to workplace, customers and
Respecting the individual and valuing
communities…in touch with the world
contributions of each employee
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GE Corporate Values (2/2)
Core values of the company that may not fit with French values?
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Values as “passion for customers”, “attitude towards change” and
“6 Sigma”. More in detail Six Sigma is the most well known
implementation success story.
Action oriented vs Analysis oriented culture
The latest communication slogan is “Imagination at Work”
How did the company manage to instill its values in the French unit?
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Clear communication policy and explicit corporate values
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A selective recruitment is a very important component to assure
the expected behavior of the French unit employees.
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The appraisal system assures the implementation of the corporate
values on a on going basis.
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GE’s Products
What
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products are produced in France?
Global Product Company strategy
GE Energy: Gas turbines 40 – 126 MW (Belfort & Bourogne)
GE Medical Systems: Medical Imaging including the Vascular –
Mammography and X-Rays (Buc)
GE Plastics: ABS (Beauvais)
GE Capital Bank: Credit Services
And the other GE branches are also represented in France or can be
contacted by local representatives.
Why are these products produced in France (and not elsewhere for example)?
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Association nature of CFM (gas turbines JV)
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GEMS branch result of the acquisition of the Thompson CGR Diagnostic
Imaging division
Are there expansion/reduction plans for these product lines?
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There are some expansion plans for the world within the “GE Globalization”
plan. GE is facing the new century with a totally committed attitude
towards Europe. No production expansions plan in France have been
considered for the future.
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GE's clients
Who are the company's clients of the Imported or exported products?
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Very diverse clients for each one of GE’s division’s products.
Global Product system and GE France distributes the products produced
worldwide to the airplane manufacturers, to the medical institutions and to
the plastic manufacturing firms.
What are their expectations?
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GE’s clients expect the best technology and service in the world and they
receive it in 99% of the cases (Six Sigma). GE has also extended its values
to the “Six Sigma Partnering Strategy” where the values of GE are linked to
client's needs and strategy.
GE’s strategy is based on long term client satisfaction and business
partnership.
French presence help or hurt the company's ability to satisfy client
demands?
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It helps the ability of GE to sell its products locally: “patriotic reflex”
Extra when selling to French people.
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Constraints in France
What are the principle constraints that GE foresaw before coming to France?
Related to the consolidation of the acquisition / transition
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Different attitude (Financial Driven vs Technical Driven Attitudes).
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Implementation of a less hierarchical organization.
Related to the French location:
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Adoption of GE values by local employees
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Work force regulation and management procedures
Did GE discover any others after the implantation?
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Difficulty to handle two different locations. Example: Engineering in GEMS
Division had two offices, on e in the US and one in France that at some
point were competing.
How do these constraints differ with their other locations?
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There are very different economic and social challenges in other locations.
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Adaptation to France (1/2)
Adaptations to its people management systems?
No specific adaptation has been introduced for the French
branch. GE’s people management system is oriented to assure
that the local employees are as much as possible in line with
the company expectations in terms of values and results.
Listed below there are the main tools used:
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Exchange programs integrating people from different divisions
and trans-divisional career concept
Recruitment/Selection: Challenge & Review, Position
Authorization Request, Local talent policy
Compensation: According to the country and competitiveness
in the industry
Workforce Planning: Operational & strategic need Based
International Transfers: they are used only when strictly
necessary. Local talent policy that uses as much as possible
local people in order to minimize costs and take profit of the
local advantages of each location.
Appraisal system and continual stimuli to make personnel
reach the best possible performance.
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Adaptation to France (2/2)
Job Design, Job Assignment
 Clear job design provided by each one of the positions available.
 Assigned on a per need basis depending on the people available
Training programs
 There is an internal training course catalog provided by HR. Also
there is a website for publishing of these courses. GE invests
worldwide $1 billion per year in people’s training.
 Management Development: Executive Coaching, leadership programs
(CLP), (EEDP), (FMP), (IMLP), (HRLP), (OMLP) as well as several
internal training programs for managers. workshops, e-learning,
on/off the job training, internal networking organizations.
What are the key costs to coming to France that are more or less than
operating in other locations?
 Investment cost in Production, Operation and Engineering facilities.
 High costs due to the intensive capital nature of the business and the
technology involved.
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Key Constraint Costs
Key costs to coming to France that are different from other locations?
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Difficult to compare with other locations due to the Joint Venture M&A nature of France’s operation.
Any or all HR type costs (hiring, paying, training, dismissing, etc.)
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High cost of personnel, social security and redundancy plan
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High opportunity cost related to long regulated procedure of
dismissing
Communication contraints
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GE’s language is English - Bilingual local basis
Integration of French managers into global organization (does it cost
more to use French managers than managers from other cultures)?
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It is not necessarily more expensive to use French managers than
people from other cultures.
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Key Benefits
What are the key benefits / disadvantages of being in France?
( + ) Central position in Europe, Infrastructure, Labor education
( - ) Rigid labor market, language skills, cultural constraints
(analysis oriented and change “averse”).
Product quality
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All the production and services are based on the 6-Sigma
policy.
Location benefits
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The average provided by the industry (multinationals)
Government assistance?
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N/A
Market Potential
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There is very little need for cultural adaptation of the major
products since they are designed for very specific or very
general needs.
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GE’s Essential Advice
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What advice do you offer to other companies in this sector
concerning use of France as a location?
 Implement effective people management tools in order to assure the
respect of the company culture
 Development of specific HR policy is necessary when the cultural match
between local work force and company culture is very difficult to obtain
 Take advantage of a unique opportunity to enrich the global work force
with high technical skilled individuals.
 Assure “employability” is more and more becoming a key motivation tools
in France.
 Implementation of high quality training programs for employees, high
potential individuals and managers is one of the most effective motivation
tools with high investment returns for the company because complete the
employees’ overall set of skills (languages, international mind set,
attitude towards change…)
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We Thank
 Benjamin De Porte , General Manager Multi Vendor
Services DI Europe,
[email protected]
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Bibliography
References
 General Electric Annual Report 2002
 GE Graduate Opportunities Brochure
 www.ge.com/europe
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Our Team
 Candida Barbato ([email protected])
 Jan Sorensen ([email protected])
 Juan Rodriguez Alvarez
([email protected])
 Carlos Ojeda ([email protected])
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