GE Doubling Jobs in Africa as Ford Plans Eventual Surge

U.S. manufacturing giants General Electric Co. (GE) and Ford Motor Co. (F) see Africa emerging as the world’s next big growth market and are rushing to expand there.
“Everything is pointing toward a surge in the African economy,” Jim Benintende, Ford’s head of operations in the Middle East and Africa, said in an interview yesterday on the eve of the U.S. Africa-Business Forum in Washington. “We’re really focused on this region like never before.”
Ford is looking to expand its manufacturing plants in Africa, as it introduces new models like the Mustang sports car and forecasts industrywide auto sales will grow 40 percent by 2020. GE yesterday announced plans to invest $2 billion in the region by 2018 and double its workforce on the continent.
“Africa is one of the most important growth areas, purely from an economic standpoint,” GE Chief Executive Officer Jeffrey Immelt said at a media event for the start of the U.S.- Africa Leaders Summit in Washington being hosted by President Barack Obama. “It’s in very early days for Africa, so there’s still a lot yet to be done and the notion of having the summit here says that it’s important.”
The summit is aimed at boosting economic ties to help nurture growth on the continent that has the world’s lowest income and, according to the African Development Bank Group, the fastest growth.

Photographer: Krisztian Bocsi/Bloomberg

The Ford badge sits on the front of a Ford Fiesta automobile as an employee works on the engine on the production line at the Ford Motor Co. factory in Cologne, Germany.

The Ford badge sits on the front of a Ford Fiesta automobile as an employee works on.

GE won about $8.3 billion in orders in Africa over the last year as it accelerates operations in a continent where Immelt said sales were “almost zero” in 2000. Revenue there last year was $5.2 billion, according to GE, which estimates that Africa’s basic infrastructure needs could generate $90 billion in investment opportunities.

Vehicle Market

Africa’s vehicle market is accelerating rapidly. Ford, the second-largest U.S. automaker, projects that industrywide sales will grow to 2.1 million vehicles over the next six years, from 1.5 million in 2013. Africa’s driving-age population is projected to soar 55 percent to 840 million people by 2023, from 540 million last year, Ford has said.
Benintende, a Ford veteran appointed to run the regional operation this year, is formulating an Africa growth strategy for Mark Fields, who took over as chief executive officer July 1 after Alan Mulally retired. The plan is to increase Ford’s factories in Africa beyond its two plants in South Africa, with Nigeria being considered as an option, Benintende said.
“Mark is the one leading the charge, saying, ‘Tell me what I need to do for you to make this all work,’” Benintende said. “He’s fully engaged.”

Africa Challenges

The continent remains a difficult place to do business, Benintende said, citing the Ebola outbreak in Liberia and Sierra Leone and civil unrest in Nigeria, where Boko Haram rebels have been fighting security forces in a bid to impose Islamic law.
“It’s going to be a rocky road for a bit of time,” Benintende said. “But you’ve got to take the long-term view in places like Nigeria. It’s the biggest economy in Africa. You can’t ignore that. It’s got abundant natural resources, it’s got a burgeoning middle class. There’s a lot of real good reasons to look at Nigeria for future investment.”
The Africa spending planned by GE will go to develop facilities, improve supply chains and train workers, according to a statement from the Fairfield, Connecticut-based company. GE’s Africa business includes supplying locomotives for Nigeria and aircraft engines for Kenya Airways Ltd.
The local payroll will swell to 4,000 people during the next few years compared with about 2,000 now as the company expands into the continent’s eastern nations, according to Jay Ireland, GE’s Africa CEO.