Peter Straèár, head of GE Central Europe thinks it is the task of his team to make the region, including Hungary, visible within the global company while also promoting the benefits of free trade to stakeholders in this part of the world.
Economic development has come a long way since the system change in 1989, when GE entered the region through Hungary. Today GE is the biggest US investor in Central Eastern Europe, generating USD 7.7 billion in exports and providing 16,500 industrial jobs, Hungary’s employed share is 10,500.
Many say that big companies abuse their power, and there is a debate about what role they play in Central Europe. What is your view on this?
In my opinion, responsible investors, like GE, have played a role as accelerators. The industrial investors have helped to build a 21st century manufacturing base, one we should all be proud of. Those who live here should emphasize more that some of the most industrialized European countries – with more than 25% industrial share in their GDP – are Poland, the Czech Republic, Slovakia, Hungary and Romania. On top of that, their industrial output is expected to grow by three per cent!
Industry plays a major role in a modern economy, as it can foster innovation. It is difficult to retain qualified people if you don’t manufacture, preferably for export. GE has made very good strategic decisions in its history. It launched aircraft engine manufacturing at the end of WWII, and today produces over 70 per cent of commercial aircraft engines.
These good decisions are reflected in our investment portfolio in CEE. We have many manufacturing locations in this region (Hungary, Poland, the Czech Republic and Romania ). In Poland we have a 2,000-strong Engineering Design Center that started with GE Aviation and then expanded to four other businesses. These manufacture or develop technologies for global markets.
From Hungary, for example, we export 99% of the production. These plants are big players and our Veresegyház energy technology manufacturing site has played a major role in enabling GE to fulfill recent Egyptian and Algerian mega deals for gas turbines. Also, 15 years ago our company entered the oil and gas industry, a sector that has grown sharply in subsequent years. It is no surprise that we have an oil and gas technology production facility in Fót, Hungary.
The critics of US Ex-Im Bank claim that the government nonsensically supports the so-called corporate wellness of huge enterprises. They speak about unfair help to corporations such as yours and Boeing.
This is one of the myths surrounding the whole topic. Let me give you an example from CEE, one that I am focusing on right now. GE has 21 manufacturing plants here and over 6,200 suppliers – we source for them in the amount of USD 1.7 billion. This is not just GE as a big corporation we are talking about. It is an ecosystem of suppliers, contractors and employees.
How about the Transatlantic Trade and Investment Partnership (TTIP)?
I read the interview with the US Ambassador to Hungary in the latest issue of Diplomacy&Trade mentioning TTIP as one of her areas of strategic focus. I agree, as I think it is high time for Europe to strengthen its global position through more free trade. There are 500 million people living here and the EU has the largest unified economy in the world. I think we on this continent don’t always fully utilize this position to increase our own competitive strength. GE considers itself a European player not just a global one with 90,000 employees in Europe. This role will be strenghtened by the acquisition of French company Alstom.
What is the next area CEE and Hungary should focus on?
GE’s mission is to invent the next industrial era; to build, move, power and cure the world. R&D is a crucial part of this and there is huge potential for CEE to become an innovation hub – the education is strong here, though it needs more resources allocated to it especially in engineering and IT by governments. GE currently has five technology centers employing 2,600 engineers and the technologies they have developed here range from ultrafibre water purification through LED and GE Healthcare’s Predix software, the basis of the Industrial Internet for that business.
Has CEE been able to close the gap with the more developed part of Europe?
The world is the playground, though we talk about Central and Eastern Europe as a region of significant scale, its countries are small individually. You can read more about how we view and stimulate the region on geforcee.geblogs.com. GE’s partnership with Hungary has helped reshape its, and the region’s, industrial and economic landscape, while also contributing to their successful reintegration into the global economy. Partnership with GE means a win-win for both parties. GE just celebrated, in Hungary’s Parliament building, our 25th anniversary with AmCham Hungary and the 500 key stakeholders who influence the economic and political relationship between the US and Hungary. This was a moment that demonstrated that this country is a key player in GE’s regional growth plan.