Craiova: the advantages of British investment

I was in Craiova in early December to look at the climate for British investment. I visited one of the largest British investments in the region, the plant run by Cummins Generator Technologies which manufactures electrical generators in a joint venture with Electroputere Craiova. Cummins have installed new equipment and refurbished the existing machines at the site within the Electroputere area of the city to turn the factory into one of their main manufacturing hubs in the world and one of the top ten companies in the Dolj region. The advantages of this British headquartered company investment – for the city of Craiova as well as for the company itself – were plain to see.

The most obvious advantage is the 685 jobs Cummins maintains in Craiova – jobs which have survived the recent economic downturn. Cummins was able to substitute new markets for traditional ones, which means its order book is likely to be very full as the traditional markets now return to previous levels. Secondly, Cummins has introduced new health and safety standards for their employees, investing in the factory to ensure that the working environment is as safe as possible. I visited the plant wearing a high visibility jacket and safety glasses. The company’s employees follow similar safety procedures. Thirdly, Cummins’ employees also invest their time in helping the local community. They have several projects working with blind children in the area, and recently took part in the Let’s Do it! campaign to tidy up local parks. I was really impressed by the commitment of staff to this work, and the fact that they see Cummins’s support for their voluntary work in the community as an added advantage of working for the company.

And what does Cummins get out of its investment? I often hear that Romania’s advantage is the low cost of its work force. I don’t think that gives the whole picture. Certainly, labour costs here can be less than in Western Europe – but there are lower costs in other countries too. The advantage in Romania is the high value of its workforce. Cummins has been able to work with a highly qualified and highly motivated work force. It recently decided to give its workers the opportunity to re-design the manufacturing process using LEAN methodologies, coming up with their own ideas on the shop floor to manufacture generators more efficiently. The result was that the time to produce a single unit halved – in other words, the productivity of the plant doubled. No wonder Cummins are happy with the results of their investment in Romania.