Those of us who wish to take up the gauntlet to fight globalization are too late to the battle. That war has already been lost. We now live in a global marketplace with products, services and software being developed and shipped around the world. Regional differences still exist as one country faces pressures that might be significantly different than those on the other side of the globe. In one region, the focus might be on integrating wind generation into the grid, while in another, opening access to customer choice might be driving business decisions. In yet another region, building out delivery systems to those without electricity might predominate.

As editorial director of Transmission & Distribution World, I sought out executives from four multinational companies prior to and during the 2006 CIGRÉ meeting in Paris to get the pulse of how business is transacted in this age of globalization, posing a series of broad-ranging questions to executives at Siemens, ABB, AREVA and GE Energy. The results of four separate interviews are presented by topic below.

T&D World: Could you comment on the increasingly global nature of our business and the pressures our industry is facing?

Niehage: We see a growing global demand for transmission and distribution equipment solutions in all marketplaces. There are, of course, areas where business is booming. The Gulf Region of the Middle East has money to spend because of the revenues from oil. Also, China and the Asian region have growing economies. India today is experiencing growth rates of 8%. So all these regions have requests for building out infrastructure. We also see growing demand in South America. In markets with developed infrastructure, we see new demands on replacing old equipment. We are also being asked to find new solutions to make the system even more efficient and to more fully utilize existing equipment while addressing reliability and environmental issues.

Finally, we have emerging markets where the focus is on keeping the power on and meeting basic needs. We have some markets where customers are looking for total solutions. We are asked how to optimize entire systems and this makes the times very, very interesting for us.

Guillemot: I started in the automotive industry before coming to ALSTOM [now AREVA] and find the power industry to be a fascinating world. It may not have always been the case, but today it's really a fast-moving industry. There are new needs emerging all over the world. I think it's really important for a company like AREVA to step up and make a difference.

Today, when you look at our internal revenue, it was up to 3.2 billion euros last year and is even higher this year. Eighty percent of AREVA's sales are with utilities, which constitute a group of 3000 customers around the world. We know each of our customers, and we have been working with them for years. We are organized so that we are sure to stay close to them. Today we have an international sales network covering all areas of the world by region. We see some similarities among customers by region. Some countries, like China and India, are big enough to be a region by themselves.

At AREVA, we have 16 product types. And what is our business? To make substations and to manage the grid they constitute. We provide both high- and medium-voltage equipment for both transmission and distribution networks. We provide all the products that go into the building of a substation. We can deliver on turnkey substation projects. We also provide a wide range of automation technologies. We have a group dedicated to delivering real-time data solutions that vary from protective relaying in the substation to providing market management software. We also supply services for our customers, down to collecting diagnostics from substation devices.

Jucker: We invest in our business with appropriate partners. The philosophy of ABB is to act locally by hiring local people to provide services. If you speak about joint ventures or investments in terms of providing mentoring in developing regions, we do that too. We are now working with more than 70 universities. We have a number of research and development centers [in] the developing world and in the emerging market, where we are investing in people there. The individuals in these centers have access to the latest technology worldwide from ABB, so that they can develop their own future with the help of ABB.

T&D World: Are we seeing a change in business models to accommodate the changing needs of utilities?

Gilligan: Of course, our former CEO Jack Welch left a tremendous legacy here at GE, but now we are five years down the road with Jeff Immelt as CEO. Jeff has certainly put his fingerprints on the company, but it was never his intent to throw away any of the legacy that Jack built, the legacy of being a financial high performer in each business segment.

Dudzinski: By the time Jack got toward the end of his reign in GE, he was asking for two looks at the business. One look where you define yourself as how you would normally define yourself, but the other look he wanted you to define your business in a way that you were a very small player, and that would give you the opportunity to see where you might grow the business.

Gilligan: Over the past two to three years, Jeff created business groups, and we're now within the infrastructure group that includes aircraft engines, locomotives, energy, oil and gas. Consequently, we're seeing a much better transfer of technology across groups within GE. Just think about rotating equipment. Aircraft engine technology should have carry-over into the utility gas turbine space. When we were operating as a stand-alone business, we didn't see the interplay because these underlying businesses are very large in their own right. Energy, for example, is a US$17 billion business.

Niehage: We have Siemens staff in the United States, in China, in India and around the world. If we bring all the experience from these people, they give us feedback that might solve a problem in the United States that was solved two years earlier in other markets. So, we now try to bring together these best practices and share this information.

We have a key phrase at Siemens for years that we are a “global network of innovation.” So the network is really the company. We have today a platform where we continuously exchange information, which is a role we would like to play in the world. We make it possible to exchange new ideas from one marketplace to the next. Deregulation in many markets is an issue, but still we don't see just one deregulation model. And all our utility customers have additional needs. For example, if you look to Germany, there's this strong need to address renewables. If you look at power flow schemes in the past, Germany's grid requirements were very stringent and it was clear how the system would operate. Now, because they built a lot of wind power on their farms in the north of Germany, power flows change directions dramatically during the day so we see totally new requests.

Guillemot: All our business units around the world sell business lines, which go beyond what is manufactured within their boundaries. All of our manufacturing centers are very modern and serve more than one customer. Many are worldwide competency centers. Take our circuit breaker unit in Charleroi, Pennsylvania, U.S. This worldwide competency center conducts developmental projects to bring new circuit breaker designs to market. So each unit has a mission that goes beyond its domestic market.

We have 67 manufacturing sites located all over the world, but with a heavy weighting in Europe. Our sales are shifting by region. For example, Asia Pacific used to be 15% of sales, now it's 20% and will soon be 25%.

We are still a net exporter from Europe, but it will be less and less the case as we redeploy our manufacturing footprint to be closer to our markets. In China, we will have doubled the number of our factory sites, which are a mix of AREVA companies and AREVA joint ventures. We are majority owners of all joint ventures. As we transfer our technologies globally, our goal is to have every new plant be the best one we have ever built.

T&D World: We are a technology-driven industry. How is your company investing in research and development to meet emerging needs?

Gilligan: Jeff Immelt has brought more focus on new products and new technologies, and it is his intent that GE be a leader in terms of product technology, quality and innovation. We've seen significantly more emphasis on technology development recently. We've seen a huge reinvestment in our research centers. We have invested in upgrading the facilities in Schenectady along with a major infusion of new talent. We've also opened one research center in Germany, one in India and one in China.

GE is also getting into new business niches, including the delivery of enhanced security systems and technologies. Real-time sensing is actually a place where GE will be a leader, because we have a tremendous background and phenomenal expertise in real-time control of processes and systems. For example, when you go from the lag inherent in a state estimator, which is running in minutes, sometimes two or three, sometimes five, to running in real time … that plays into one of GE's competencies.

There's certainly a level of reinvestment that's being made in our business, and there is an expectation that you're going to deliver leading-edge products for that reinvestment.