GE unit merger: Wabtec now covers all rail-based transport in India

After completion of the global merger of General Electric (GE) Transportation with Pittsburgh-based Wabtec Corporation, their combined offering in the Indian market has increased.

GE had spun off its transportation arm into the merged entity, getting in return a 24.9 per cent ownership interest in Wabtec, now an $8-billion entity. In India, the new entity would have Wabtec’s broad range of freight, transit and electronics products, with erstwhile GE Transportation’s equipment, services and digital solutions for the locomotive, mining, marine, stationary power and drilling industries.  

“Globally, we have around 27,000 employees and we can see that around 10 per cent of our workforce is in India,” Nalin Jain, president and chief executive, international, GE Transportaion, told Business Standard. “Wabtec is at a different level in India now in terms of its scale and presence, post the merger. From our (erstwhile GE) point of view, we have a much broader transportation portfolio now, which caters to all segments of rail transportation.” Sixty five per cent of the combined entity’s portfolio globally would now be freight; 35 per cent would be transit. Historically, GE manufactured diesel locomotives and provided services on these. Beside, it has products that go into the mining industry. “The entire propulsion system on the Komatsu trucks, barring the engine, is a GE system, a part of the truck value. This was the GE Transportation business that came into Wabtec,” explained Jain. 

Wabtec grew rapidly in the past decade and has different buckets of products. “The first bucket is freight, in which there are products like brakes, bogies, couplers and draft gears, sold to freight car manufacturers in the Kolkata region, the Indian Railways’ locomotives and coaches. The second segment is what is called as transit, which is because of the Faiveley acquisition that Wabtec did in 2016.”

In the transit space, Wabtec is a world leader in brakes, air conditioning and doors which go on metro trains. It is also a supplier of a host of other products. It is a supplier to Alstom, Bombardier and Siemens, which are implementing metro rail projects in India. “That part of the business for us is growing rapidly because of all the investment taking place in the metro space,” said Jain. For Wabtec, earlier, the India market had been growing at 20 to 25 per cent annually. 

On turnover, India is the entity’s third largest market, after North America and Europe. “India is our high priority market and one of our top five geographies. It is one of those countries in which we have all the capabilities, from engineering to supply chain, manufacturing and services. We have our entire gamut of activities in India,” said Jain.

GE also offered digital and electronics solutions for greater efficiency. In the case of Wabtec, it has a solution called Positive Train Control which has been implemented on the US network and can be implemented on Indian Railways, adds Jain.

Merger Saga

 

• Wabtec Corporation completes merger with GE Transportation on February 25 
• Combined revenue for 2018 is $8 billion
• Total staff strength of the firm is 27,000, of which 10% is in India
• Total value of GE Transportation-Wabtec merger is $11.1 billion