GE sets Michigan research site, calls for renewal
* GE to invest $100 mln in site
* State tax incentives totaling $74 mln over 12 years
* 1,200 initial jobs, hiring to start later in 2009
* Michigan governor: high-paying jobs at facility
* GE's Immelt calls for U.S. industrial renewal
By David Bailey and Soyoung Kim
DETROIT, June 26 - General Electric Co <GE.N> plans to open a research center in the economically ailing U.S. state of Michigan, in a bid to boost its technology and software presence in its home country.
The $100 million site will eventually employ more than 1,100 people, who will develop new manufacturing techniques and software to be used in the largest U.S. conglomerate's jet engines and electricity-producing turbines.
The move came on a day that Chief Executive Jeff Immelt said the United States needs to refocus its economy on manufacturing and technology, rather than counting on consumer spending and financial wizardry to drive growth.
"This allows us to be lower cost, faster and build great capability right here in Michigan," Immelt told reporters.
Michigan, home to the nation's auto industry, faces high unemployment as a result of the car makers' struggles. The bankruptcies of General Motors Corp <GMGMQ.PK> and Chrysler LLC and troubles at their suppliers have cost the state thousands of jobs.
Michigan Governor Jennifer Granholm said the facility would receive state tax incentives totaling $74 million over 12 years, but was expected to generate income taxes and other revenue totaling about $146 million over that period.
"These are jobs that will pay around $100,000 a year; these are high-paying jobs," Granholm said.
The facility will be built in Van Buren Township, about 25 miles outside Detroit. Immelt said hiring for the facility would start by the end of this year.
The announcement by GE comes on the same day that GM announced that it will build a small car at an existing plant in Orion, Michigan. [ID:nN26327931]
TIME TO 'INSOURCE'
GE, the world's biggest maker of jet engines and electricity-producing turbines, also has research centers in Niskayuna, New York; Bangalore, Shanghai and Munich.
Immelt said the decision to locate the new facility in Michigan reflects his believe that, like many U.S. companies, GE, has turned too many core technological procedures over to outside contractors and foreign operations.
"In some areas, I just think as a company, we have outsourced too much," Immelt told the Detroit Economic Club. "We plan to 'insource' capabilities like aviation component manufacturing and software development." [ID:nN26148442]
The research facility, slated to open later this year, will develop next-generation manufacturing technologies for GE's renewable energy, aircraft engine, gas turbine and other businesses.
It will also develop software to support GE's business operations for advanced technologies such as the smart electricity grid, and serve as a training hub for GE engineering professionals.
GE must meet incentives to qualify for the full amount and Michigan also expects to benefit from additional supplier investments because of the facility, Granholm said.
"Companies like GE never travel alone," Granholm said. (Reporting by David Bailey and Soyoung Kim, writing by Scott Malone, editing by Gerald E. McCormick and Tim Dobbyn)