GE Seeks Greater Agility by Bringing IT Work Back

Susan Hall

President Obama caught flak when he named GE CEO Jeffrey Immelt to head his jobs council, given GE's record of outsourcing.

 

Bloomberg reports that among GE's job announcements are 1,100 IT positions that it's bringing back in-house. The jobs will be at its Advanced Manufacturing and Software Technology Center near Ann Arbor, Mich., which opened in 2009. These jobs actually were announced then and seem to be part of the $74 million, 12-year tax credit it received from the state. (The Detroit Free Press says the state is rethinking the wisdom of such deals.) So far, the company has filled about 660 positions there.

 

This AnnArbor.com piece mentions that it's hiring workers experienced with business intelligence systems, though the Bloomberg piece speaks of mobile development, software to manage production, electronic health records and more.

 

Charlene Begley, chief information technology officer, said of the work:

About 50 percent of the IT work was being done by non-GE employees. That strategy may have had its time, but there was a lot of downside. We lost a lot of the technical capabilities that we have to own.

Begley said of the need to respond more quickly to business needs:

Within the IT context, our employees, our businesses, our customers have demands that are 10 times what they used to be. They need instant data anywhere anytime. And for us to, like, have to call a contractor for that technical skill slows us down.

Bloomberg reports that the company has increased its IT staff by 30 percent to 9,600 worldwide in the past decade and plans to expand to 11,000, though it doesn't give a date on that.


 

Our Ann All wrote in 2009 about what is lost when IT work is sent overseas. And it seems that other companies are rethinking their outsourcing strategies. The global value of IT outsourcing contracts fell 20 percent in the first half of 2011, including a 51 percent drop in the Americas during the second quarter, according to data released July 20 by outsourcing consultant TPI.

 

Tracey Schelmetic, a contributing editor for TMCnet, meanwhile, finds the Michigan IT jobs an effort to groom the company's image. That's certainly a possibility. The New York Times reported the company paid no income taxes in 2010, but claimed a $3.2 billion tax benefit.

 

Forbes' Daniel Fisher wrote last month that Immelt flew a bunch of journalists around the East Coast to explain its vision for keeping manufacturing jobs in the United States. Fisher says the jobs there will be for highly skilled workers who can fulfill a variety of roles. For instance, at GE Aircraft's plant in Durham, N.C., technicians - FAA-licensed engine mechanics who earn $25 to $36 an hour - dealt with issues previously handled by middle managers, including financial details, regulations and inventory.



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