GE Hydro Inepar, the joint venture of General Electric’s hydro unit and Inepar S.A. Industria e Construcoes of Brazil, is preparing for the investment of unspecified millions of dollars to serve as host of GE Hydro’s new world headquarters in Brazil.
In addition to moving its headquarters from Schenectady, N.Y., to Sao Paulo, Brazil, GE Hydro is to begin technology transfer in November that will result in establishment of a high-technology hydraulic laboratory for testing turbines and generators. The new test facility is to adjoin existing industrial facilities in Araraquara of an Inepar affiliate, heavy equipment manufacturer IESA.
IESA President Atilano Oms Sobrinho said the Brazil move was based on GE Hydro’s ten years of successful partnership with Inepar as well as acknowledgment that Brazil has the second largest hydro generation market in the world, after China. Oms said the venture would be 50-50 between the partners.
The Araraquara business center also is to house most of the investment in production equipment and will result in the most complete investment in hydro generation in Latin America, Oms said. Part of the production operation will be based in Campinas, the current GE Hydro Inepar location, and in Sao Paulo.
In addition to technology and equipment, he said the Brazil operation will employ a �compatible structure of human resources to assure perfect and fast absorption of the famous technology of GE.� Oms said the agreement also foresees the optimization of GE Power’s marketing channels throughout the world.
Whereas the current GE Hydro Inepar venture supplies hydro equipment to Brazil and some other Latin American countries, it now will produce turbines and generators for the entire world. Oms said GE manufacturing and laboratory facilities in Sweden and Finland will be absorbed into the new GE Hydro Inepar, providing important continuity to customers currently served by those facilities.
A spokeswoman at parent General Electric’s GE Canada office previously said the decision was made to reduce the number of hydro business operations from ten to four. (HNN 10/2/07) Spokeswoman Kim Warburton said the company would maintain two manufacturing locations, one in Sao Paulo and the other in Finland. GE Hydro’s focus in Canada is to change from manufacturing to service, as service facilities in St. Augustin and Beloeil, Quebec, are to be unaffected.
Activities at GE Hydro’s turbine manufacturing plant in the Montreal suburb of Lachine and engineering and drafting operations in Peterborough, Ontario, will wind down by June 2008, Warburton said. Additionally, she said operations in Doncaster, United Kingdom, and in Sweden are to be phased out. Two facilities in Norway are to be sold, she said.
GE Hydro employs 2,000 people globally, with 700 of those working in Canada. Warburton said it has not been determined how many employees would be terminated or reassigned. She said some contracted work is scheduled into 2012.
�The realignment does not mean that everyone does not have a job in June 2008,� she said. �We will be working on existing contracts. There is a fair amount of engineering work for existing work. We will be looking to deploy some of our people in other GE businesses.�
Warburton said the restructuring was the result of the termination of plans to sell GE Hydro to Argentina’s Pescarmona Group of Companies (PGC). (HNN 6/14/07) GE had announced in December 2006 that it agreed to sell GE Hydro to PGC, parent of Argentina-based hydro industry supplier IMPSA.
�The next step was to take a look at the overall business and look at the best way for realigning it for future growth,� she said.