GE Capital Finds Excellence in its Austrian Location

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GE Capital Finds Excellence in its Austrian Location

The $250 billion global financial services company opened its European Center of Excellence in December to serve German-speaking countries.


	[ 9/1/1999 ] By: Karen E. Thuermer
	[ 0 Talkbacks / Add Talkback ]

GE Capital, a leading global financial services company with assets of over $250 billion, is making a major investment in Austria.

The Stamford, Conn.,-based company with 28 specialized businesses, opened its new European Center of Excellence in Eisenstadt in December. Its “Center of Excellence” at Technologiepark Eisenstadt in Burgenland is expected to create over 400 jobs within the next five years.

When fully operational, it will serve as a regional back office for GE Capital’s consumer finance businesses operating in German-speaking countries.

Services provided by the center will include telephone customer service, credit card and personal loan payment processing, lease processing, and collections.

It may also eventually incorporate regional back office operations for other GE Capital businesses in central and eastern Europe.

The new Technologiepark facility, with about 16,000 square feet of office space, was completed this summer. Featuring new computer and telecommunications technology, the Center of Excellence will be one of the most advanced operations of its kind within GE Capital, the global financial services unit of the American General Electric Co. Competitive advantages

GE Capital’s decision to locate the center in Austria was based on a number of competitive advantages.

“Eisenstadt is extremely favorable to our business needs,” said Charles Crabtree, senior vice president and chief operations officer, GE Capital Global Consumer Finance.

“It has available, well-trained and skilled personnel, an excellent infrastructure, and has provided us with the opportunity to design a tailor-made facility. Overall it is a very attractive location.”

In addition, he points to Austria’s excellent telecommunications infrastructure, the position of Austria as a business gateway to central and Eastern Europe, and EU incentives for the province of Burgenland as reasons the company chose the location. Other important factors included the level of support provided by the Austrian Business Agency, the national investment promotion company, and Business Service Burgenland, the provincial investment promotion organization.

The Eisenstadt site was selected by GE Capital after a thorough review of locations in Austria, Germany and Poland.

Reform measures

A key factor in Austria’s success in attracting foreign firms has been its reform measures, which involve the telecommunications and energy markets as well as permit and licensing procedures.

The recent liberalization of Austria’s telecommunications sector has cut prices and broken the traditional monopoly of the national telecom company. Companies also now have the right to set up flexible work schedules to boost their international competitiveness.

New laws centralize permit requirements into a one-step process, cut regulatory red tape to three months for simple, six months for complicated, and a maximum of nine months for the most complex projects.

Noting these factors, in April 1999, international consulting firm KPMG ranked Austria as the most cost-effective business location in continental Europe among G7 countries. “The KPMG study shows that a small country like Austria offers favorable business conditions, a fact that is greatly appreciated by foreign companies,” says Rene Siegl, the Austrian Business Agency’s managing director. “Not only did the level of foreign investment double in 1998, compared to the year before, but there has been an unprecedented boom in inquiries from potential investors.”

In the first six months of 1999, the agency helped provide service to 46 foreign companies locating their business operations in Austria, compared to 28 in the same period in 1998.

Variety of industries show strength

While a host of businesses and manufacturers find Austria attractive, a survey conducted a few years ago by the American Chamber of Commerce in Vienna found that the majority of U.S. firms in Austria are trading companies.

“About 35 percent are in the service sector, and about 15 percent in manufacturing,” says Peter Wolf of the Vienna Business Agency.

“Austria is a highly attractive business location for long-term investments,” said Andrew Tempest, general manager of Master Foods Austria. “That is based on EU membership, its position as an effective springboard to central and Eastern Europe, the motivated and highly-skilled work force, and excellent infrastructure.”

Austria is home to Master Foods’ European center of expertise for cookie manufacturing.

Automotive and biotech

The automotive and biotech industries are growing in Austria. As part of Austria’s automotive industry, Chrysler operates its only production facility in Europe in Graz, Austria.

Suppliers such as Lear Seating Corp. have opened manufacturing operations to be near the plant.

“We’re a just-in-time operation,” explains Jim Hollars, senior vice president of international relations for Lear. “Our seats must reach Chrysler quickly to meet manufacturing demands.”

BMW and General Motors/Opel have operations in Austria. In addition, Magna, the eighth- largest automotive component supplier in the world, is investing almost $100 million in a stamping parts plant.

Leading-edge technology and industrial parks and production clusters in the automotive, electronic and IT fields complement Austria’s 2,000 high-tech research and development institutes, innovation and higher-education centers.

Pharmaceutical/biotech giant Baxter strengthened its Austrian presence by acquiring Immuno. As a result, an additional manufacturing facility will be established in Vienna for the production of blood products and immunizations. Since 1997, the company has invested approximately $450 million in Austria.

Other major players in biotech include Novartis Austria, the Institute for Molecular Biology, Vienna Biocenter, and Boehringer Ingelheim Austria.

Infrastructure is key

Austria’s infrastructure of roadways, railways and international flight connections are a big factor in attracting companies.

Earlier this year, Vienna International Airport opened a new goods terminal with a handling capacity of 45,000 tons. Cargo handling has taken on more importance at the airport.

According to Airport Cargo Manager Peter Ecker, 49 percent of the cargo handled through Vienna is shipped elsewhere. Much is going to Eastern European countries.

Masterplan 2015, a scheme to expand Vienna International Airport, is expected to have a mammoth impact on the Austrian economy and provide better service for international business travelers as well. This plan is additional evidence that Austria is serious about business and attracting more.

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