General Electric has recently announced plans for one of its subsidiaries, Baker Hughes, to build a $4 million hub in Cincinnati, which is expected to eventually employ approximately 40 people. In fact, Baker Hughes has already broken ground on the new building, and the company has stated that it expects the new hub to already be open and running sometime in late 2017.
To commemorate its new innovation and business hub, Baker Hughes hosted a groundbreaking ceremony for the center on Wednesday, July 12. Officially known as the Inspection Technology Customer Solution Center, is located in Sharonville at 11988 Tramway Drive. The purpose of the new center is to serve as a testing and collaboration site for a wide range of industries, including oil and gas, aerospace, automotive, wind energy, additives and heavy equipment.
At 26,000 square feet, the new hub will be the largest such center that GE owns, and the company hopes that by locating it in Cincinnati, it will be able to take advantage of the region’s huge automotive and aviation sectors. The ultimate goal is for engineers employed by the center to help various manufacturers test their new products for any potential defects or design flaws.
In addition to providing on-site testing and inspection services, the hub will also serve as an inspection academy and training center. In total, GE expects that the new hub will bring in approximately 600 customers a year to Cincinnati for training and testing purposes.
Although the center is slated to only have around 15 employees when it first opens, GE and Baker Hughes hope to eventually scale this number up to approximately 40 people.
For those who are unfamiliar with Baker Hughes, it is one of the largest and most profitable oil and industrial service companies in the world. The company is based in Houston, Texas and has offices around the world that focus on providing products and services needed for energy exploration, oil drilling and a range of other energy needs.
Following a failed takeover by Halliburton in 2014, General Electric announced in October 2016 that it was in negotiations to purchase Baker Hughes for $30 billion. GE’s goal was to then merge Baker Hughes with GE Oil and Gas to create a single publicly-traded company. Although the deal took some time, GE eventually reached its goal, and on July 3, 2017, finally announced that Baker Hughes was officially a GE company.
In announcing the merger, GE noted that the new company is now called Baker Hughes, a GE Company. GE also didn’t waste any time in having the company publicly listed as stocks were already listed on the New York Stock Exchange on July 5, just two days after the merger.
It seems GE took over Baker Hughes with specific plans already in mind, and this is obviously evidenced by the fact that the company was already breaking ground on its new Cincinnati hub just a little over the week after the merger. While it is still generally too early to tell just what sort of effect the new Baker Hughes hub will have on the local economy, it’s obvious that there will be at least some financial benefit to the city, local businesses and residents.
The fact that the center only expects to employ 40 people means it generally won’t have an impact on the local job market, but it will have an impact on the engineers and other personnel who end up working there. Still, the bigger impact is likely to come from the 600+ additional visitors that the center expects to attract as these should provide at least a small boost to some local hotels, restaurants and various other establishments.
Another factor to consider is that the new testing center potentially has the ability to persuade other manufacturers to move to the area. For instance, the testing center could prove pivotal if the choice for a new factory came down to Cincinnati and some other city. There is no doubt that any of company in any one of the sectors that the new center is focused on would benefit from being located closer to the center and thus being able to have easier access to the testing facilities.
At a total cost of $4 million, the new center will obviously provide a short-term boost for the local construction industries. In fact, the ground-breaking ceremony would seem to be a good indication that this boost has already begun.
The fact that the new Cincinnati facility was one of the very first moves GE made after the Baker Hughes merger seems to indicate that it’s an important project for the company. In this sense, while it may be too early to predict just how big of an impact it will have, it seems that there is no doubt that this new project is something that GE is taking very seriously. For this reason, it would seem to have an incredibly high likelihood of being a success.