The clamor following last Sunday's General Electric's announcement in Florence – the company will invest more than €500 million in Italy in the next five years to create a new research and development center based in Tuscany for the study of new-generation compressors and turbines for oil and gas extraction – overshadowed an element that marks Italian institutions' new pace.
The Italian government and Tuscany Region are offering economic incentives to attract foreign investments, just like many American states are doing.
This decision is aimed at strengthening the American multinational's activity (in Italy GE has revenues for more than $10 billion and 12,400 direct employees in nine business divisions).
Two thirds of the resources needed to realize the “Galileo” project – which should result in the recruitment of 500 engineers – will be provided by GE; the remaining third – around €180 mn – will come from public funds (meaning the government, the regions and the EU).
The Tuscany Region said that the form of this co-financing is still to be defined, but the possibilities are some “innovative tax agreements,” or even an involvement of state backed lender Cassa Depositi e Prestiti's resources for co-investments on industrialization. On their side, institutions will promote the shaping of new business roles.
The signatories of the agreement – GE, the prime minister’s office, the Ministry for Economic Development, Tuscany Region and the Florence-based GE unit Nuovo Pignone – will cooperate to assess the project's feasibility and to get to a real framework agreement by May (the one signed on Sunday is just a protocol of understanding) with a clear definition of timing, ways and resources.
GE's industrial plan for 2016-2020 includes a product development-focused activity for the first three years (5 million hours of engineering) and, starting from 2019, the production of approximately 300 gas turbines and 400 centrifugal compressors, for a total amount of 6 million hours of production in the factories based in Florence, Massa-Carrara and the facilities in other Italian regions.
The €500 million investments on Oil&Gas are in addition to the €200 million of the agreement signed in New York recently, during the American road show “Invest in Italy” organized by ITA, defining investments on productive processes' innovation by GE Avio Aero, that produces elements and engines for civil and military airplanes in Piedmont, Puglia and Campania.
“Thanks to these two agreements, it is now possible to estimate a General Electric's investment in Italy at more than $800 million,” said the American multinational.
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