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GE-CGR targets Germany from French European hub


When GE acquired Paris-based Thomson-CGR five years ago, manypredicted that a serious clash of cultures would follow. Theyweren't disappointed. But out of the confusion created by turnoverin top management and jumbled product lines has emerged a

When GE acquired Paris-based Thomson-CGR five years ago, manypredicted that a serious clash of cultures would follow. Theyweren't disappointed. But out of the confusion created by turnoverin top management and jumbled product lines has emerged a newcompany that appears eager to challenge Siemens and Philips formarket leadership in Europe.

Housed in its new $25 million business center in Buc, 20 milesfrom Paris, GE-CGR is moving ahead with its manufacturing of x-rayand mammography equipment and preparing to start up a pan-Europeanremote diagnostics service program for its equipment users.

Most of the dust raised when the U.S. firm bought CGR has settled,leading to a rebound in sales in the home market. GE-CGR expectsto make money this year for the first time.

For president and CEO Steven C. Riedel, an American who speakslittle French, GE-CGR's credibility problems are behind it. GE'sdecision to make its Buc facility much more than just a distributioncenter is a vote of confidence in the future of the European market,he told SCAN in an interview at the Buc business center.

"We've merged product lines and stabilized our businessbut are still only in the middle of where we want to be post-acquisition,"said Riedel, who was previously vice president of marketing andengineering for GE Medical Systems in Milwaukee before movingto France in 1989. "We are now starting to roll out a consistentand global product line. These systems have been optimized toEuropean conditions."

Of GE-CGR's 5500 employees, 2100 are in France, including 1200in Buc. The company also operates manufacturing plants in Belgium,Italy and Spain. Revenues in 1991 were $950 million, of which$550 million came from France, according to Riedel. (The companydoes not discuss profit figures.)

Since the acquisition, the importance of the French marketto GE-CGR has diminished; the French government no longer showsthe favoritism it did toward Thomson-CGR. It is the German market--bothWest and East--on which GE-CGR has set its sights.

GE-CGR DID NOT HAVE A SINGLE ORDER in five years for a CT scannerfrom a German university hospital until this spring, noted Riedelas an example of the company's overall lack of past sales successin Germany.

"When I talk to German doctors, they always refer to GEhaving been in and out, in and out. We didn't have a sustainedsales presence," Riedel said. "We want a solid and legitimatepresence in Germany like Siemens has in the U.S. This will probablytake the rest of the decade to achieve."

Germany is the third largest medical imaging equipment marketin the world, trailing only the U.S. and Japan. As a German company,Siemens is not likely to lose its favored status among Germandoctors, Riedel said.

"Frankly, the only advantage we have there is small (market)share. We have lots of room to grow," he noted. "Germanyis investing in health care very aggressively, especially in theEast. Fortunately, Siemens doesn't have all the advantages therethat it does in the West."

In France, a two-year freeze on the acquisition of CT and MRsystems for private hospitals is thawing. GE-CGR expects to benefitfrom a local market revival. France presently has the second lowestconcentration of MR units in Western Europe, next to the U.K.

"Excitement over MR is starting to grow all over Europe,"Riedel said. "The referral base is starting to ask for it."

It is x-ray systems, however, that executives in Buc directlysupervise. An R&D facility for magnetic resonance that predatesthe GE-CGR merger continues to operate, but GE high-tech devicesare imported to Europe from North America and Japan, where GEruns its majority-controlled Yokogawa Medical Systems subsidiary.

The market for x-ray products in Europe (including the MiddleEast) is $1.2 billion a year.

Jack Price, general manager of GE's global x-ray products andan American, is based in Buc. Roughly 75% of all x-ray engineeringis done there, with the rest occurring at GE world headquartersin Milwaukee. The responsibility for launching new products lieswith Price and his team.

An estimated 1000 to 1200 Senographe mammography systems--oneof GE's most successful x-ray products--will be built this yearin Buc. The centralization of all x-ray manufacturing productsshould save about 20% in inventory costs alone, noted Serge Huot,vice president of manufacturing.

Perhaps the activity of which GE-CGR executives are proudestis their new European service organization. Modeled after GE'stelecommunications-based InSite system in the U.S. (SCAN 1/29/92),the European network is working with 30 customers in a pilot program,with another 70 to be added by September.

At present, no imaging equipment company operates what couldbe called a pan-European service organization, said Marc Onetto,vice president of European service.

"Our goal is to provide customers throughout Europe thesame level of service, regardless of where they are," Onettosaid. "Europe is indeed in the making and we want to takeadvantage of this movement to improve our customer satisfaction."

Because of differences in national telephone companies, itwas not possible five years ago to make toll-free calls acrossborders in Europe, as InSite users there will soon be able todo. The psychological barrier of the non-French calling a Frenchphone number should not prove insurmountable since support engineerswill be available who speak all major European languages. Theeffort required to overcome the system's technical challengesis worthwhile, Riedel added.

"This industry will evolve by the turn of the centuryfrom technology to a high-tech services orientation," hesaid. "We will still be technology-based but not technology-drivenlike we have been."

The quicker and more efficient dispatching of service to equipmentcustomers is nothing new to the computer industry, and in medicalimaging both Siemens and Philips are following suit in Europe.GE-CGR hopes to distinguish itself by outperforming the competition.

"We don't have the national attachments like our competitors,"Onetto said. Providing the same level of service across Europeis a fairly radical idea, he noted. "We are taking some risksin doing this, but the new Europe also affords a major opportunityto do it right."


  • Gendex of Des Plaines, IL, continues to aggressively expandits dental and medical x-ray business. The firm has signed a letterof intent to purchase Eureka X-ray Tube of Arlington Heights,IL, from Siemens. Gendex was formed in 1983 with the acquisitionof GE's dental x-ray business. It purchased medical x-ray firmUniversal/Allied Imaging three years ago. This year, Gendex expandedits dental side by buying the dental x-ray business of Philips(SCAN 1/29/92).

Eureka was an independent supplier of x-ray and CT tubes forthe diagnostic imaging industry prior to its purchase by the majorGerman-based medical imaging vendor three and a half years ago(SCAN 11/23/88). Siemens has its own European-based tube supplyand was looking for a buyer for Eureka, according to a sourceoutside the two companies.

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