‘Europe is still competitive’

Europe can remain competitive in a globalised economy, according to Jeff Immelt, chairman and chief executive of GE, one of the world's most successful companies.

On a visit to Brussels last week, which included his first meeting with Günter Verheugen, the European commissioner for competitiveness, Immelt predicted that in certain industries Europe would be able to compete with China for decades.

"The job of people like me is to make people feel that they can compete and make competitiveness not a dirty word but something to aspire to," said Immelt.

Being globally competitive was, he said, about combining technical workers with knowledge and expertise in a particular sector or domain.

Europe was, said Immelt, globally competitive in aviation and avionics, transportation and automotive industry, energy and healthcare.

"We can export to China and India for decades," he said, though he acknowledged that it was difficult for politicians to point out which industries were competitive and which were not.

"When I look at Europe, I am not at all dour about it, because there are four or five things we can do for a long time to come," he said.

The 50-year-old, who took over from Jack Welch as GE chairman and CEO in September 2001, drew a distinction between old Europe and new Europe defined by their entrepreneurial spirit. He placed France and Germany firmly in the category of those countries that needed to change.

While acknowledging that "we have a fairly good business in Germany, a very good business in France and sell in all those places", nevertheless, he felt a difference between old and new Europe "clearly exists from a standpoint of man-in-the-street spirit and attitude".

He cited Spain as an example. "Twenty-five years ago the notion that as a company we would make any investment in Spain would have blown my mind.

"Now we have probably billions of dollars of investment in Spain. It is a happening place, there is a spirit and dynamism, which you don't necessarily find in France and Germany."

Europe, he said, remained "a big strategic part of the world" for GE, which had revenues of €35 billion in Europe and 90,000 employees.

"Our business in Europe is growing as fast or faster than in the US," he said.

Asked what changes he would like to see in 'old Europe', he said: "Labour reform, things that encourage investment."

Immelt did not entertain the idea that the countries of western Europe were intrinsically incapable of competing.

"The technical engineers we have in the UK, in France, in Germany are every bit as competitive and creative as their colleagues anyplace in the world," he said.

But, he added, "there has got to be a strong desire to be globally competitive which has to exist in these regions in order for confidence and real success to take place".

The lack of such confidence was "not something purely European".

"There are parts of the US that say 'raise the drawbridge - we don't want to compete with China'. There are parts of every country that want to go backwards. What happens in the US is that the financial engines make everybody face reality and look forward."

But Immelt acknowledged that change in Germany would take time and that it was easier for businessmen like him to identify the necessary changes than for politicians to execute them.

"We're not naive about it. We know how long it takes and how much has to go into it. But we are hopeful that reforms continue to drive competitiveness," he said.

He added: "We are pragmatic. How countries such as Germany, France, Italy fare is actually an important thing as to how quickly this continues to evolve."

"Some of the best companies are still in Germany - Siemens is a great company, BMW is a great company. It is ridiculous to think, Germany being the third largest economy in the world, that we can have a completely vibrant Europe with Germany on the sidelines. It is not going to happen."

"In my assessment people in Germany and France are going to want to be part of the dynamism that is available across Europe. That is what will drive changes."

Immelt said that he, "as most business people", saw "the advantages of a more unified Europe - a common currency, mobility of workforce, standardisation of practices and policies.

The enlargement of the EU had, he said, been "very positive".

Immelt's European tour included a visit to Moscow, where GE has design centres. But he was cautious about investments in Russia. He said that although GE did look east from its European base, he felt the Russian market had to be served from Russia itself.

"We would like to make some investments in Russia. We have yet to find the conditions under which good industrial investments can be made," he said.

Europe can remain competitive in a globalised economy, according to Jeff Immelt, chairman and chief executive of GE, one of the world's most successful companies.