TBY talks to Gabriela Hernández Cardoso, President & CEO of GE Mexico, on the significance of Mexico to the corporation’s global operations.
TBY Mexico accounts for the highest number of GE plants outside of the US. How does Mexico figure in GE’s overall Latin American and global operations?
GABRIELA HERNÁNDEZ CARDOSO We are the biggest manufacturing platform outside the US, with 21 manufacturing plants, including three new acquisitions. We also have eight service centers, 51 sites in total with offices around the country, almost 11,000 employees, and 35,000 with joint ventures, of which we have four very important ones in Mexico. In revenues, unfortunately, we’ve been losing our position. We used to be number one in Latin America, but Brazil has caught up with us and will surpass us in 2011. In 2010 we closed with total sales of $1.9 billion. However, 2011 is a tough call, but we should be growing in double digits. Revenues in Mexico come from GE Capital, which accounts for around 40%. This is a difference since in the past it represented more than 50% of revenue. We are focusing all our efforts to grow our industrial operations, while GE Capital will continue to be an important business.
How will the introduction of “DuraStation™” in partnership with GDF SUEZ lead to the utilization of electric cars in the Mexican market, and how will this new technology improve the electrical infrastructure in Mexico?
We were the first company to set up electric vehicle charging stations in Latin America. That sends out a very positive signal, namely that of the utilization and development of clean energy. These DuraStations™ will be partly loaded by solar power. We have the technology. We’re already in the second generation of DuraStation™; the new product is called Wattstation™. The new stations charge in four to eight hours, whereas in the previous stations a car had to be charged for 12-18 hours. With this technology you can remotely interact with the charging station via cell phone. You are also informed if your car is ever disconnected. Also, the price of electricity is very competitive, and cheaper than gasoline. The electric cars produced right now are not the lowest priced, because it’s a new technology. However, once the market expands and the infrastructure is in place, prices will naturally come down. We have built 400 stations of this type in the US and have an order for 400 stations more, which puts us in the number one position. General Electric is a company founded by Thomas Edison, and we carry on that innovative tradition, applying the necessary research, development, design, and initiative to produce new technology that will benefit all segments of the population and improve people’s quality of life.
Do you use mainly wind and solar, or does hydropower still play the dominant role?
Gas is growing most rapidly now. That’s a reality. The fact is that fossil fuel use will not go away as rapidly as we might hope. However, renewables will be growing, and the government has set a target for renewable energy use.
How does the acquisition of Lineage Power and Dresser fit within your plant-expansion strategy in Mexico?
Lineage is about industrial solutions, and it complements some of our solutions for electrical installations. From Wood Group we only acquired the “Well Support” business. Dresser and Wood Group complement our portfolio in oil and gas. The acquisitions were made with a worldwide strategy in mind, not just limited to Mexico. These acquisitions now enable us to take care of the whole process from beginning to end for our customers. We can now do everything from extracting oil to distributing it, thanks to these companies. Lineage does that in the electrical sector. These companies have enabled us to achieve a fully integrated solution for our customers. That’s the name of the game today. It’s all about solutions. You have to provide a whole solution, not just a part of it.
In your opinion, what are the main reasons why the Critikon plant won the award for best plant of GE Healthcare globally?
Mexico has a very rich reservoir of talent—human talent. It’s not about cheap labor or low costs anymore. It’s about having a talented workforce. In the 1980s and 1990s it was about affordable labor, which is what brought about the existence of maquiladoras. However, Mexico is now at a different stage. We are now positioned as the top country in the global GE network in terms of environmental health and safety (EHS) practices with our 21 manufacturing plants. We have very high standards—even higher than that which is required by law—and that has to do with talented people who can run a plant efficiently and lower the cost of manufacturing. It’s all about performance and sustainability, building rigor and operating systems along with innovation and contributing on a global basis. This mentality of continuous improvement in product performance and superb customer service is entrenched in Mexico’s manufacturing culture, and with our operating system we assure continuous seed planting for a bright and sustained future. The best plants have the best people and we make sure that people growth is always a top priority. Mexico produces about 90,000 engineering graduates a year, more than the US. We started tapping into that talent in the universities, and are doing the same thing in management. We find talented students in universities and even in high school, and have all types of learning programs and training centers. The company invests $1 billion per year in training worldwide, and considers training as an investment, not a cost.
How will the new investment of $24 million for the GE Infrastructure complex in Querétaro, the biggest in the aviation segment complex outside the US, affect overall operations for GE Mexico?
That money is for the expansion of the design complex. We’re designing not just for Mexico there, but for GE worldwide. We have teams there that are working with customers in Mexico and the rest of Latin America. They customize solutions for our clients and take solutions to our customers. Another factor is that they are right here and they can travel anywhere quickly. In 2011, for example, GEIQ supported engineering projects in Latin America worth over $2 billion.
In April 2011, GE USA announced its partnership with Google for the construction of the biggest wind park in the world, which will be built in the US. What main objectives do you have for the development of this renewable source in Mexico?
As yet, GE is not a big player in the wind sector in Mexico, but we have large projects in line to position ourselves in wind energy. The reason we haven’t focused as much on wind until now is because we didn’t have the technology locally. Class 1 winds are the winds you get in Oaxaca, which are very strong. That means you don’t need such a big turbine or rotor at that level. We were, however, well positioned in Class 2, which is why we’re number one in the US, and number two in Europe. Those involve bigger rotors and higher capacity turbines to generate the electricity. Now we have the technology for Class 1 and are very strong in Class 2. We’re well positioned in the overall wind-energy sector.
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