BOSTON — General Electric held its annual shareholder meeting Tuesday as scheduled, but in cyberspace rather than in person.
The COVID-19 pandemic prompted the decision to hold a virtual meeting and it was the focus much of CEO H. Lawrence Culp Jr.’s presentation, as GE’s turnaround efforts have been knocked off track by the global impact of the virus.
Culp’s message was much the same as the one he delivered when presenting GE’s first-quarter earnings report last week: The company has been hit hard by the pandemic and won’t improve until after the pandemic eases. But the changes it has made in the last two years position it better for recovery.
Until then, the plan is: Embrace the new reality, redefine winning and execute the plan.
Culp on Tuesday offered less of the accounting terminology and jargon he typically uses when speaking to analysts, though he managed to avoid using plain-spoken terminology such as “layoff,” “furlough” and “stock value plunge.”
GE said Monday it would cut up to 25 percent of the workforce at its Aviation business and on Tuesday its stock closed at $6.20 per share, its lowest in decades.
“The steps we are taking, as painful as some of them may be, will make us more nimble, more customer-centric and ultimately more effective on the other side of this pandemic,” Culp said.
As GE’s first-ever virtual shareholder meeting progressed in cyberspace Tuesday, members of IUE-CWA, the union representing many of the company’s hourly workers, protested outside GE facilities in Schenectady and eight other cities from Massachusetts to Texas. They demanded that GE stop sending jobs overseas and start manufacturing ventilators with its excess personnel and facilities.
As he started, Culp honored three recently deceased giants in the company’s history: Jack Welch, who in two decades vastly increased GE’s value and profitability; Walter Robb of Niskayuna, former head of research and development for all of GE; and John Lammas, who has GE Gas Power’s chief technology officer had been a frequent visitor to the Niskayuna R&D facility.
“I think the best way we pay tribute to Jack going forward is to continue to strengthen GE with an eye toward winning,” Cup said.
“I also want to recognize two other incredible leaders we lost recently: Walter Robb, a legendary engineer who Jack tapped to lead GE’s medical equipment business, and John Lammas, a brilliant thinker who served most recently as vice president for engineering at GE Gas Power. We thank them for their many contributions to our company and to the world.”
Culp answered questions submitted by shareholders and stakeholders.
- When can we expect in increase in the one-penny quarterly dividend? Culp said he hopes to do that, in time, but he’s got a multiyear transition to profitability and a pandemic to deal with first.
- Is there any consideration of shedding further businesses? The focus now is on improving the existing businesses.
- Would the board members attend the annual retirees’ meeting in September? We don’t envision doing so.
- Will you consider increasing eligibility for or reimbursement through the GE Retiree Reimbursement Account? Probably not.
- Will the GE Foundation resume matching retiree donations up to $1,000? It seems unlikely.
- Will the company offer another lump sum pension buyout this year? That hasn’t been decided yet.
- What do you say to someone who has held GE stock for 20 years?
(Closing price per share was $52.67 on May 5, 2000, vs. $6.20 on May 5, 2020.)
“If you’ve been with us 20 years, we appreciate the support and the loyalty but I can only imagine what that ride has been like.”
Correction: An earlier version of this misspelled the name of John Lammas in the second reference.