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| Immelt admits that
the main concern of ge's Chinese operations is the domestic
market while that of ge India is to be a service provider, and
source of products, to the company's global operations. |
If
you've been reading the papers-and you probably have-you must have
read everything Jeff Immelt had to say to the media during an exclusive
Q&A session with eight hacks. One paper said seven, but the
writer must have just forgotten to include himself in the count-I
know; I was there. The newspapers didn't miss much. From ''I still
talk to Jack'' to "No one asks me about (how it feels to replace)
Jack anymore'' to ''In China, the (domestic) market is awesome''.
Even the softer details weren't missed. The first thing Immelt did
after walking into the room and pressing the flesh with the assembled
eight, was to help himself to a Diet Coke from the side table. ''I
am told you never start a meeting without one,'' said one journalist.
''That's right,'' grinned Immelt. ''Straight from the can.'' Halfway
through the discussion, the same journalist asked Immelt whether
his football experience-he played it in college-had helped him get
through a bad year. ''I can take a lot of hits,'' said Immelt. Still,
there was one thing that everyone (well, not quite everyone, but
you knew that already) missed, and one thing that they downplayed.
The thing they missed had to do with Immelt's clothes. GE's CEO
was wearing the same kind of powder-blue shirt and yellow tie that
Jack Welch did during his visit to India in September 2000. The
thing they downplayed was a statistic: GE's Indian operations employ
almost 6 per cent of the company's total workforce, but contribute
less than 1 per cent of its sales. Now, the obvious way of looking
at this is to say, ''Ah, we knew they were just hiring call-centre
agents". I'd look at it differently. GE's Indian operations
are far more outward-oriented than its operations in other countries,
such as China. Immelt admits that the main concern of GE's Chinese
operations is the domestic market while that of GE India is to be
a service provider, and source of products, to the company's global
operations. ''The Indian market is promising but tough, but the
people are just terrific.'' That explains why GE Capital International
Services runs a much-written about Business Process Outsourcing
business, why the company's software partners in India (the likes
of TCS and Patni run Global Development Centres dedicated to GE;
the total number of people employed by such GDCS is 8,000) crunch
much of the code that the $125.91 billion (Rs 6,16,973 crore) behemoth
uses, and why GE Medical Systems India makes products that are sold
in other markets where GE operates.
In numerical terms, that means we are unlikely
to see much addition to the $600 million (Rs 2,940 crore) GE has
invested in India thus far. More investments would require a thriving
domestic market, which, in turn, to paraphrase GE India CEO Scott
Bayman's favourite refrain, would require the government to get
serious about power sector reforms and the privatisation of its
airlines-GE is a big player in power and aircraft engines worldwide.
China, then, will probably be a much more important
market for GE-it already is bigger-than India. And its Indian arm
will remain a far more 'global' operation for the company than the
Chinese one. ''That's the challenge for India,'' says Immelt. ''The
market will be elsewhere.'' With, arguably, the finest marketing
company in India, HLL, looking to shore up its topline through a
global sourcing initiative, maybe there's something in what Immelt
says.
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