General Electric (GE) recently announced its intention to invest $54 million to set up research and development labs and expand its technology center in Bangalore. This is the company's largest integrated multi-disciplinary research and development and engineering center outside the US and marks a significant step for the company. The center has been in existence for 12 years. Expansions to this center most probably mean good things for GE's future.
This expansion may be just what GE needs to stay ahead of the game. The expansion will include the advent of experimental labs. These labs will be used for research into and engineering in a number of areas of "critical importance". GE, which already has a very broad portfolio and which functions at a variety of different levels in the stock market, will now concentrate on developments in "cancer treatment, radiochemistry and other technology applications in healthcare, locomotive engines, heavy earth moving equipment and equipment for the energy sector". This is the kind of expansion that I want to see in a tech stock. The broader portfolio allows GE to find profitability across the board, and this new expansion puts it right into an industry that's no stranger to booming profit margins.
GE competitors could take a few tips from this new development and start expanding their own operations above and beyond their current focuses. The center is an important leader in the company's engineering innovation. This is a very good and strategic move in my opinion as India is an important area for the company where a variety of new innovations have bloomed over the years. In fact, more than 1,500 patents have been filed by GE as a result of the work done by the force based at this Bangalore center. India is an important factor in the company's overall growth plans, so further development and expansion in this country can only mean that the company is moving forward rather than backwards.
GE also recently announced that it plans to supply wind turbines for alternative-energy projects in Michigan and Iowa.
GE will sell 137 (which in total have a capacity of about 220 megawatts) wind turbines operating in North America to DTE Energy (DTE). This is a play on DTE's part to increase its sources of alternative energy, something that there is an increased demand for in this day and age.
This serves to demonstrate how GE is a leader in the area of wind turbine technology. As we move forward we need, as a species, to find alternative sources of energy. The companies that develop these alternative sources successfully will be the ones that are remembered the most in the future. They will be the companies that lead us. I feel that, because GE has such a strong presence in this industry, it will do well in the future and it will be one of the strongest stocks to back now and in the years to come. However, it is not the only stock that is competing in the alternative energy market. Continuing innovations are called for if GE is to maintain its lead in this regard and if it is to keep ahead of other companies with similar ideas. However, this should not present a significant challenge to the tech stock.
GE competitor Siemens (SI), in partnership with Gamesa Corporation Tecnologica SA plan to export wind turbines from U.S. factories. This follows a decrease in demand for wind turbines in the US. The two companies want to put their plan into action before renewable-energy tax credit expires in December. I think that this is a good move as the sale of wind turbines in the US could drop even further in the coming months. Siemens needs to put plans like this into action ahead of time in order to avoid being caught short.
Panasonic (PC) recently announced that it does not intend to invest in the medical equipment maker Olympus. This is contrary to a rumor that got the attention of some a little while ago. There were several reports that Panasonic would invest in the company by providing 50 billion yen ($630 million) in capital to Olympus. The company now states that there was never any deal of this kind, so where the news came from is unclear. It is probably for the best as Olympus is still struggling to recover from an accounting scandal.
Emerson Electric (EMR) has opened an Indo-China Regional Office in Bangkok. This is a play on the company's part to strengthen its presence in areas such as Cambodia, Laos, Myanmar, Thailand, and Vietnam where industries are growing at a rapid rate. Investment in the Asian market is a play that several companies have made from several different sectors. It seems like the best thing to do as these markets are emerging more and more quickly each day. I certainly feel that Emerson has the right idea in this regard and that the stock is one worth watching in the coming months.
Competitor Honeywell (HON) recently acquired Inncom International. The sale is final, but at this point in time we don't know what the terms of that sale are exactly. Together the two companies hope to be "the best and most comprehensive solution set for customers". It will also expand the customer base that Honeywell will be responsible for serving. This expansion of its portfolio is probably a good move on the part of Honeywell as it prepares the company to continue expanding in the future and become an even more serious competitor in this particular arena.
GE, as usual, is active and commanding of attention. The company seems to be making some great moves right now for stable growth in the coming years. Nothing suggests there will a be dip here soon, so enjoy the wave of GE's success by getting on board now.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.