Ford Expands Regional European Business Service Center in Budapest
Ford has opened its expanded Regional European Business Service Center serving the EMEA region (Europe, Middle East and Africa) in Budapest. The company says it will create 100 more new jobs by the end of this year, with another 100 added by the end of 2019.
Viktor Molnár, regional director of Ford.
With the inauguration of its service center at Váci Greens in Budapest, Ford has opened its largest business service center in Europe. As a result, Ford is now present in three locations in Hungary: two in Budapest and one, its headquarters, in Szentendre.
With the new service center, Ford says it currently employs more than 500 “highly-qualified people”. By the end of this year, that number will increase to nearly 600, making the company the largest U.S.-based automotive employer in Hungary, said Viktor Molnár, regional director of Ford, at the official opening of the center.
Approximately 99% of Ford employees are Hungarian, 98% have a degree (many more than one) and between them they speak 17 languages overall, he added. Access to a pool of well-qualified, foreign language-speaking workers was one of the main considerations for Ford deciding to bring new functions to Hungary.
(In Hungary, there are about 110 business or shared service centers employing nearly 46,000 people, according to information by the Hungarian Investment Promotion Agency. Language command is essential, with some centers provide services in up to 30 different languages.)
“This is a milestone in the history of Ford Hungary, and the coronation of almost two years of negotiations,” said Molnár. The expansion and the introduction of some new services is also the acknowledgement of the quality of the work Hungarian employees have done. HIPA also played a role in the process; the organization acted as a coordinator between the government and the company.
The decision is in line with Ford’s strategy of streamlining its European operations and making them more cost effective. The company, which has been present in Hungary for 18 years, first started to expand its Hungarian team by moving the European financial unit to the country in 2012. The next step, in 2015, saw the establishment of the Business Service Center in Szentendre.
The new office at Váci Greens office building houses many of the functions already present in Budapest. Among them are production planning – the staff of this department is charged with determining which models, and how many, will be sold in Europe’s countries two years in advance.
European finance is a function that has been in Hungary for three years now. After sales and customer literature are somewhat newer – this latter takes care of, for example, the preparation and translation of various manuals into 22 languages.
The new office center will also house what is a new function for Hungary: Global HR. Along with a center in Mexico, and another in India, the new HR department will provide services to Ford’s business operations around the world.
From a strategic viewpoint, it is positive that ever more centers of excellence or functions requiring decision-making are being established in Hungary, László Vizkeleti, team manager of engineering, manufacturing, logistics and supply change at Hays Hungary told the Budapest Business Journal.
This all helps “shift the perception of the country as being a low-cost labor market to that of being a best-cost one”, he added. These areas include supply chain, cost engineering, logistics or, as in the case of Ford, human resources.
With the expansion, the value of the experts needed for functions brought here by Ford and the competition for them will likely increase. Depending on the availability of these professionals, this may even bring about a salary raise, according to the expert.
One major reason why companies are selecting Hungary as a location for these operations is the lower cost of workforce and office space compared to Western Europe, the United States, and sometimes even Asia. At the same time, companies have access to highly-qualified workforce, meaning there is little or no need to employ expats. Hungarian employees have the necessary language command, but there are many foreigners too who come to live in Hungary and can be employed as well, albeit they tend to be counted as local hires.
“The location of the country also makes it attractive for automotive companies: being halfway between the United States and Asian markets makes communication easier,” Vizkeleti said.
Ford says it also supports a continuously expanding supplier network in Hungary, currently consisting of 40 companies and 69,000 employees, manufacturing and supplying parts for Ford production facilities, with a total revenue of HUF 580 billion (USD 2.27 bln) in 2017. That equates to 1.7% of Hungarian GDP, the carmaker says. Ford has been the market leader in overall vehicle sales in Hungary since 2010, with a strong market share in the passenger car segment with 10% and more than 22% share of the commercial vehicle market.
Ford’s Regional European Business Service Center.
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