GE entered Vietnam in 1993 as a non-commercial partner with local humanitarian organizations, and was one of the first American enterprises to commence operations — before the U.S. trade embargo was lifted and diplomatic relations were restored. With a vision of becoming a market leader in Vietnam, today GE is working in partnership with the Vietnamese people and government to successfully overcome the challenges of establishing a business in an emerging economy, for the benefit of both the country and the company. In 2009, GE announced the opening of its first energy facility in Haiphong, highlighting its long-term commitment to doing business in Vietnam.
Nearly 20 years of trade restrictions with the United States have created numerous development obstacles to Vietnam’s growth that are still being overcome today. The country is striving to integrate with the global economy, attract high quality and high-tech investments, strengthen the regulatory environment, advance its workforce, develop its healthcare sector and grow the energy supply by 17 percent per year.
GE’s commitment as a partner in Vietnam’s growth is demonstrated by its investments in trade relations, strengthening the legal and regulatory framework, increasing the quality and safety standards of the local suppliers and contractors, and building a cost-competitive manufacturing facility.
GE Chairman & CEO Jeff Immelt with Vietnam’s Deputy Prime Minister Nguyen Sinh Hung
The decision to build the Haiphong Facility in Vietnam was driven by GE Chairman & CEO Jeffrey Immelt, who believes that not only is Vietnam a cost-effective location to manufacture wind turbine generators, but that successful operations there would demonstrate to other governments and companies that GE can build and operate a world-class facility in the region.
Investing In Trade And Development
Since its initial entry, GE has worked with the Vietnamese and U.S. governments to improve trade relations between thecountries and to support Vietnam's accession to the World Trade Organization (WTO), which it joined in 2007. To develop and sustain U.S.-Vietnam trade relations, GE has promoted U.S. business interests in Vietnam, and helped achieve a bilateral trade agreement with Vietnam — established in 2001 — by working with key U.S. government leaders, including those in Congress.
“GE was active in helping the United States and Vietnam to normalize bilateral trade relations. U.S.-VTC has been in close touch with GE to understand how the implementation process of the WTO commitments affects global players, and how GE’s example can help other companies see Vietnam as a long-term partner for investment.”
— virginia b. foote, the u.s.-vietnam trade council
GE is also working directly with the Vietnamese government to identify and align shared interests and objectives, and thus achieve mutually beneficial outcomes. For example, in a meeting with Vietnam’s President Nguyen Minh Triet in 2007, Immelt reaffirmed GE’s commitment to provide training both at GE’s corporate learning center in Crotonville, New York and in Vietnam for senior leaders from the government, state-owned companies and private companies. “GE values the fast growth of the Vietnamese economy and has complementary technology, services and financing capability to fulfill the huge infrastructure requirement of Vietnam. We hope to help design leadership development programs for Vietnam, which will be essential to sustaining its economic development,” he explained.
To help address the challenge of an under-developed regulatory environment, GE Foundation dedicated a $225,000 grant through the U.S.-Vietnam Trade Council Education Forum and STAR Vietnam to the “Advancing the Rule of Law in Vietnam” program. The grant helps Vietnam integrate with the global economy by implementing WTO requirements such as having a comment period for new regulations and laws. The Rule of Law program is being implemented in partnership with Vietnamese state agencies, NGOs, business associations and academic institutions. Increasing transparency and public participation in the law-making process will not only strengthen the rule of law, but should also lead to increased economic development and growth.
“There is a need to improve public awareness and understanding of the legal frameworks and the opportunities for public engagement in this process.”
— phan van ngoc, actionaid vietnam
Due to a lack of sustainable environmental policies, Vietnam’s integration with the global economy and steady growth has also had negative impacts on the environment, such as pollution and deforestation. To help build Vietnam’s long-term capacity to develop sustainably, GE Foundation granted $100,000 to Duke University to help establish a Master’s in Public Policy in the Environment at the National University of Ho Chi Minh City.
GE’s efforts on trade and development have contributed to several positive impacts in the country, including an enhanced reputation for Vietnam as a favorable country for investment, the creation of high-tech manufacturing jobs, and improved skill levels of the local workforce. Doan Xuan Hung, Vice Minister of the Vietnam Ministry of Foreign Affairs, has said, “GE and other multinational corporations operating in Vietnam will be effective in strengthening the relationship and mutual understanding between the people of Vietnam and other countries, providing information about the socioeconomic and political development of our country.”
“By demonstrating its success in Vietnam, GE can bring other quality investors into the country and enhance Vietnam’s reputation as a good location for investment.”
— my lan nguyen, national executive of ge vietnam
Raising The Bar With World-Class People And Processes
Local economic development in Vietnam is not without its challenges for GE or the community. For a company whose culture is defined by curiosity, innovation, teamwork, bold leadership and robust processes around employee health and safety, it was critical to uphold the same standards and requirements in its Vietnam facility. “One of the biggest challenges for GE Haiphong was the low level of awareness of the basics and importance of worker safety in Vietnam,” explained Gergo Lencses, general manager at the GE Haiphong Facility.
The GE Haiphong Facility has been able to create high quality jobs for the community, employing around 400 people, 99 percent of whom are Vietnamese nationals. The impact has been steady employment at an above average wage, new skill development and increased awareness and application of good safety practices.
“What is most exciting about setting up a manufacturing plant is to see a world-class facility in Haiphong and Vietnam with a great environment, health, and safety culture.”
— bang nguyen, ehs manager for ge in vietnam
To achieve this outcome, GE invested in capacity building — instilling a culture of safety and providing training and development opportunities on site for employees. All GE Haiphong employees completed safety and skills training and the facility has reduced on-site accidents. “Vietnamese citizens expect multinational companies, such as GE, to meet a ‘higher business standard’ and clearly communicate to the public about their intentions and performance,” noted Nguyen Vu Anh Thuy, former General Manager of GJ Vietnam, now called SUNMARK, one of the first producers of solar panels in Vietnam. By maintaining its globally tested environment, health and safety (EHS) approach, and setting the bar high with its Vietnam facility, GE hopes to drive improved safety standards throughout the country.
Similar to safety standards, GE’s culture and commitment to perform with integrity is instilled in every employee. This commitment is guided by the company’s integrity policy, The Spirit & The Letter, which addresses social expectations and employee conduct related to issues such as bribery and corruption, and compliance with regulation.
In addition to having a manufacturing facility with global standards, other positive impacts for the community surrounding the GE Haiphong Facility include the creation of secondary employment opportunities locally, increased household incomes, donations to victims of disasters and to orphanages and funding of educational scholarships.
Addressing Contractor Challenges
Given that Vietnam only recently opened its market to the global economy, GE had initial difficulty finding contractors that met its global standards, particularly considering the low level of safety awareness in Vietnam.
“The first challenge was that most of the workers and engineers are from local companies, where safety and quality standards are not as stringent. The GE project now serves as a model when it comes to safety and quality implementation, particularly in our Vietnam projects. The same standards are now being applied to our other projects.”
— romeo sigua, archetype vn. ltd, contractor for ge haiphong facility
The company’s commitment to safety starts with its global best practices and on-site management team. As Gao Xilin, senior project manager at MaisonWorleyParsons, a contractor for GE Haiphong facility notes, “The strong support and deep involvement from GE top management team has helped to improve the site safety performance.”
Workers in Vientnam to GE's strict EHS standards
GE requires that its contractors in Vietnam adhere to its standards for EHS, quality and project management, as well as its rules, regulations and stringent engineering specifications. Because the company provides contractors with the training and skills necessary to adhere to its standards, GE strictly enforces these EHS policies by assigning contractors a fine for safety infractions. “The first contractor working with GE had 10 small punishments in one day when they first started; by the end of the contract, they averaged one or less violations per day,” noted Gergo Lencses.
As a result of stimulating local and regional development by hiring local suppliers, GE’s strong focus on safety has the additional impact on creating a culture of safety and a safe workplace. Because all workers and contractors have been required to receive safety training, all of the 4,000 individual contractor employees have been trained and passed the GE EHS training. They have collectively logged more than 600,000 safe hours on site.
Working as a GE contractor has enhanced these companies’ standards and reputations, and consequently created opportunities for other work in the region. The impact is not only on the contractor employees directly trained, but improvements also reach other employees at the contracting company, workers at GE suppliers and, ultimately, the country.
“We believe that everyone is motivated to raise their standards to match GE Energy’s standards.”
— chua kian aik, project manager, hitachi plant technologies ltd, contractor for the ge haiphong facility
Tracking Progress And Sustaining Improvements
EHS is a priority for GE and the company applies the same EHS expectations globally. Despite strong improvements in safety performance by GE suppliers and workers at the Haiphong Facility, the management team recognizes that EHS is a constant challenge. GE Haiphong will continue to invest in this area. Safety will be one of the key GE Citizenship Performance Metrics that the Haiphong Facility will track. The objectives include achieving injury and illness recordable rates and loss-time (days away from work) rates that are equal to or lower than the GE average.
The formal opening of the GE Haiphong Facility in 2010 is the culmination of over 17 years of effort by the GE team, addressing a range of issues in partnership with the government of Vietnam and the local community. The result promises to be a sustainable, positive impact for the local economy and for GE.
“The Ministry of Foreign Affairs greatly appreciates GE’s activities during the past years and considers them proof of the company’s commitment to be a long-term and strategic partner to Vietnam, continuously contributing to the socioeconomic development and economic integration of the country.”
— doan xuan hung, vice minister, vietnam ministry of foreign affairs
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