Beatrice Lang
General Electric (GE) has been a pioneer of outsourcing, with a questionable record of recent job creation in the US. In 2012, GE had 50,000 manufacturing jobs in the US, a significant decrease from 125,000 in 2000. The company has closed many plants and shifted some manufacturing work overseas, including its avionics and radiology businesses to China. GE has also brought back some work from overseas and hired new employees in the US, but it is unclear how many jobs have been outsourced overall. The company has recently announced plans to hire 1,100 technologists and researchers in Michigan, indicating a potential shift away from offshore outsourcing.
| Characteristics | Values |
|---|---|
| Number of U.S. manufacturing jobs in 2000 | 125,000 |
| Number of U.S. manufacturing jobs in 2010 | 50,000 |
| Number of workers at Appliance Park in 2011 | 3,600 |
| Number of workers at Appliance Park in 2010 | 1,900 |
| Number of designers and engineers hired since 2009 | 500 |
| Number of technologists and researchers to be hired in Michigan | 1,100 |
| Number of IT roles outsourced to India | 3,000-4,000 |
| Number of workers at GE's Advanced Manufacturing and Software Technology Center | 660 |
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What You'll Learn
GE's radiology business shift to China
General Electric (GE), a pioneer of outsourcing, has been bringing manufacturing back to the US in recent years. However, the company has a questionable record of recent job creation in the country. GE has closed more than 20 factories and shifted its avionics and radiology businesses to China.
GE's decision to move its radiology business to China is part of its strategy to expand its presence in the country, which it views as the second-largest healthcare market globally. The company has also formed a joint venture with China National Medical Device Co. (CMDC) to sell non-premium imaging systems, leveraging its over 30-year history of working with Chinese partners. GE's focus on China is driven by the market's enormous potential, with an estimated 248 million seniors by the end of 2020, accounting for 17.2% of the population.
While GE's shift to China may have strategic and economic justifications, it has resulted in job losses in the US. In 2012, GE had 50,000 manufacturing jobs in the US, a significant decrease from the 125,000 jobs reported in 2000. Government records also indicate that since 2001, there have been at least 38 events where workers at GE plants in the US were eligible for trade adjustment assistance due to outsourcing or import competition.
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GE's US job creation record
General Electric (GE) has a questionable record of recent job creation in the US. The company has a history of outsourcing jobs overseas, with a presence in countries like China, India, Hungary, and the UK. GE has shifted some manufacturing work, including its avionics and radiology businesses, to China. In 2012, GE had 50,000 US manufacturing jobs, a significant decrease from 125,000 in 2000.
However, GE is taking steps to bring back American manufacturing. The company has hired additional assembly-line workers, designers, and engineers to support new manufacturing initiatives. By the end of 2014, GE expected 75% of its appliance business's revenue to come from American-made products. GE has also invested in its Advanced Manufacturing and Software Technology Center, hiring 1,100 American IT workers to develop new manufacturing software and processes. This move brings the total number of IT roles in the US to 3,000–4,000.
GE's Appliance Park in Louisville, Kentucky, is another example of the company's US job creation efforts. In 2022, the park employed 3,600 hourly employees, a 90% increase from the previous year. The facility hasn't had this many assembly-line workers in a decade, and 55% of the appliance unit's $5 billion in revenue comes from American-made products. GE expects its sales numbers to grow as the housing market recovers.
While GE has made strides in creating US jobs, it is important to note that the company has also faced criticism for its outsourcing practices. GE has closed more than 20 factories and pursued public policies that enable the shift of work overseas. Additionally, GE's global communications leader, Campanelli, stated that the company has 3,000 to 4,000 IT roles outsourced to India. Despite this, GE's recent investments in American manufacturing facilities and its commitment to increasing US-based jobs signal a potential shift in its job creation record.
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Outsourcing to India
General Electric (GE) has a long history in India, dating back to the turn of the 20th century when it built Asia's first hydroelectric project at the Shivanasamudra Falls. Since then, GE has expanded its business in India to include locomotives, jet engines, oil and gas, nuclear power plants, renewables, healthcare, financial services, power equipment, and BPO. GE currently employs around 18,500 people directly in India and has set up an engineering centre of excellence in Bengaluru.
In recent years, GE has faced challenges in the Indian market, with chairman and CEO Jeff Immelt describing the country as a "puzzle" for the company. Despite this, GE remains committed to India and sees it as an important consumer market. GE has expressed interest in the Indian government's promotion of renewable energy, but has also faced criticism for not having a strong presence in the solar business.
GE has also established a strong presence in India through its acquisition of Alstom's global power division in 2014. Alstom India employs close to 3600 people and has been investing heavily in the country to produce world-class rolling stock, components, design, research, and development. Alstom is currently executing metro projects in several Indian cities, including Chennai, Kochi, and Lucknow, and is supplying rolling stock from its state-of-the-art facility in Sri City, Andhra Pradesh.
While GE has considered outsourcing some of its business processes in the past, the company has more recently expressed a desire to keep know-how and expertise within the company. GE's separation into three public companies, GE Aerospace, GE HealthCare, and GE Vernova, may have further impacted its approach to outsourcing. As GE continues to evolve and adapt to market changes, its outsourcing strategies may also change to align with its business needs and goals.
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GE's plans to hire 1,100 American IT workers
General Electric (GE), a pioneer of outsourcing, has plans to hire 1,100 American IT workers. GE CEO Jeffrey Immelt has stated that the company intends to hire 1,100 technologists and researchers in Van Buren Township, Michigan. This is a notable shift for the company, which has previously offshored a significant portion of its IT work, with around 50% of IT work being done by non-GE employees.
Charlene Begley, president and CEO of GE Home and Business Solutions and senior vice president and CIO, indicated in an interview with Bloomberg News that the offshore outsourcing model may no longer be as advantageous for the company. She acknowledged the downsides of outsourcing, including the loss of technical capabilities. Outsourcing industry experts suggest that GE is not entirely abandoning the offshore model, but rather, seeking to bring certain strategic roles in-house to drive differentiation in products and services.
GE's decision to hire local IT workers is likely influenced by economic factors and the desire to maintain competitiveness in the market. By bringing architecture, product and program management, and other strategic roles in-house, GE can improve speed-to-market, flexibility, and resource leveraging. Additionally, having local IT workers as stakeholders in the business can help drive innovation and differentiation.
While GE has faced criticism for outsourcing thousands of jobs overseas, its recent hiring initiatives demonstrate a commitment to creating American jobs. The company has been averaging two new hires a day, and its stateside hiring reflects the current economic climate and the importance of balancing business interests with political pressures. GE's move towards insourcing may also influence other companies to reevaluate their sourcing strategies and the potential benefits of investing in local talent.
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Shifting manufacturing work overseas to countries with export credits
General Electric (GE) has outsourced jobs by shifting manufacturing work overseas to countries with export credits. This has resulted in the loss of thousands of U.S. jobs, both at GE and its suppliers. GE has cited the inability to access export financing for its customers as the reason for this shift.
In 2015, GE secured financing from the French export credit agency, COFACE, to provide a line of credit for power deals. This resulted in the move of more than 400 jobs from the U.S. to Europe, with final assembly for global aeroderivatives moved from Texas to Hungary and China. Additionally, GE's decision to shift its avionics and radiology businesses to China impacted an additional 100 jobs.
GE has also expanded its manufacturing presence in Hungary, investing $4.9 million in its Ózd facility, which added 250 jobs to the site. The Ózd plant produces GE Energy's 'Elfa Plus' range of safety and electrical system protection devices, which are exported worldwide.
While GE has been criticized for its outsourcing decisions, it is important to note that the company has also brought back some work from overseas and hired back a small percentage of previously laid-off workers. As of 2022, GE's Appliance Park in Louisville, Kentucky, employed 3,600 hourly employees, a significant increase from previous years.
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Frequently asked questions
It is unclear exactly how many jobs General Electric has outsourced, but it is estimated to be in the thousands. In 2012, the company had 50,000 manufacturing jobs in the US, down from 125,000 in 2000.
No, General Electric was once a major manufacturer in the US. However, in recent years, the company has shifted its focus to outsourcing.
General Electric has outsourced jobs to remain competitive and win contracts that require export credit agency support. Outsourcing has also allowed the company to reduce costs.
General Electric has outsourced jobs to various countries, including China, Hungary, India, and the United Kingdom. The company has also shifted some of its operations to other countries that offer export credits.
As of 2023, General Electric is in the process of hiring 1,100 American IT workers, indicating a shift from its previous focus on outsourcing. However, it is unclear if the company has completely stopped outsourcing jobs.
