GE provides update on operations as it moves toward breakup

The General Electric sign over Erie Boulevard is shown at sunset in December 2021.
PHOTOGRAPHER:

The General Electric sign over Erie Boulevard is shown at sunset in December 2021.

GREENVILLE, S.C. — General Electric offered a familiar message Thursday in an update to investors and financial industrial analysts:

Better days are on the way — the company is seeing progress as it concentrates on improving its efficiency and finances.

The investor event at GE Power’s Greenville, South Carolina facility came as the company continues with plans to break into three separate companies. Healthcare will spin off in early 2023, then Power, Digital and Renewables and will spin off as a single entity in early 2024. 

General Electric will then be an aviation-focused company, with what is now GE Aviation at its core.

In the Capital Region, GE Health Care has a small factory in North Greenbush, the world headquarters of GE Research in Niskayuna and a sprawling industrial complex on the Schenectady/Rotterdam border where GE Power builds turbines and generators and where GE Renewables runs its North American land-based wind power operations.

Since the breakup was announced in November 2021, there has been no indication what would become of these local facilities under the plan, nor was there any mention Thursday.

General Electric was born in Schenectady in 1892 and it was once headquartered there. More recently, only GE Power was headquartered in Schenectady. It now says Power has no headquarters, although much of its leadership, including CEO Scott Strazik, is based there.

GE’s Capital Region workforce is a sliver of what it once was. The company won’t quantify it, but has said the company has about 5,000 employees in 25 facilities in all of New York state.

GE CEO H. Lawrence Culp Jr. on Thursday held up changes made at GE Power in Greenville as an example of progress toward the lean profile the entire company is trying to achieve — maximum efficiency of effort invested.

Analysis of the way employees worked allowed the company to reduce the number of times production workers lift objects by 400,000 per year, and eliminated 10 miles a day of walking and forklift travel. Reportable injuries in Greenville are down 60% through the transformation.

GE Power’s Schenectady facility underwent similar self-analysis and self-improvement a few years ago, reducing lead time, effort, and use of floor space in the process.

Strazik spoke of a trilemma facing GE Power: The simultaneous need to protect the existing carbon-based power system while decarbonizing in a way that is affordable.

He also called GE Renewables’ money-losing status unacceptable but fixable, and said onshore wind shows promise for 2023 and offshore wind could be profitable by 2024.

And all the while, GE engineers and researchers are looking for the next revolutionary or evolutionary development. Strazik cited the Haliade X, a monster offshore wind turbine that has been in prototype testing in the Netherlands.

“The team did a substantial red team-blue team exercise with our Global Research Center in Niskayuna to really challenge the art of the possible with this machine,” he said.

General Electric has been dogged by the legacy costs and other impacts of the strategies it adopted in the late 1900s. Culp was brought in to lead a turnaround in 2018 and had made progress before the COVID pandemic rearranged the business world. 

GE’s long suffering stock hit its lowest price in more than a quarter-century in the summer of 2020, but has since rebounded a bit.

It closed at $91.33 per share Thursday, up a 52-week low on Monday.

Culp touched on the latest potential curve ball for GE: Russia’s invasion of Ukraine. There are too many unknowns to factor the war into financial projections at this point, he said, but noted that less than 2% of GE overall sales come from Russia, and said the more pressing priority is the safety of employees in Russia and Ukraine.

Strazik said GE Power derives 3% to 4% of its revenue from Russia.

Categories: Business, News, Schenectady, Your Niskayuna

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