H. Lawrence Culp Jr. said priorities remain clear for the General Electric Co.
However, the long-term game plan may mean more job cuts at the company’s Power unit.
Culp, in an hour-long telephone conference conversation with financial analysts last week, said he and company officials want to ensure GE businesses reach their full potential.
“And that starts, first and foremost, with power,” Culp said, in his remarks.
Power has been a company weakness. During the fourth quarter of 2018, GE Power sustained an $872 million loss. Revenue dropped 25 percent from the same quarter a year earlier, according to company financial figures.
Culp said the company will become “laser sharp” with priorities.
“GE is a large company,” he said. “GE has a lot of hungry, ambitious talented people, tend to put a long list of objectives up on the screen.
“We’re going to narrow those down,” Culp added. “My philosophy is, if we neck down to a few that are critical and make them a reality, we’re better off. We can do that year in, year out.”
Culp told analysts on the call he sees quality, grit and resilience in his team.
“You look at our technology, obviously at the GRC (Global Research Center) in Niskayuna … a tremendous amount of technical prowess in this company,” Culp said.
The chief executive hinted at reductions in the “middle layers” of the Power organization and other GE units.
Culp said these middle levels are not operating entities.
“They’re collection points,” Culp said. “And the less that we have of that, the more we’re focused on the folks, the engineers, the sales people that serve customers, we think the better off we are and the more impact we’re going to have day in, day out in running the business.”
Culp expects a “multiyear” turnaround for the Power unit.
“I don’t want to sugarcoat that in any way, shape or form,” he said. “There’s a lot of work. It’s a game of inches. But it’s work, I think we know how to do. It’s work we will do. It’s just going to take time.”
Culp promised more details March 14, during an earnings expectation report.
“Relative to the top line, we see low to mid-single-digit organic growth potential here in 2019,” he said. “Again, our better businesses performing well: Aviation, Healthcare, Renewables. Power will be down, though, because as we see some signs of stabilization, it’s still a year given that long cycle nature of that business where we’re going to see revenue pressure.”
But policy decisions are coming.
“We’re going to step up restructuring in Power and elsewhere as we move the center of gravity to the businesses as we ring out as much excess cost from our cost structure in this calendar as we can,” Culp said.
Contact Gazette reporter Jeff Wilkin at 518-395-3124 or at [email protected]
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