Category Archives: GE – General Electric

LG to open Europe’s largest EV battery factory in Poland next year

LG is opening Europe’s largest factory for building lithium-ion batteries destined for use in electric cars, the company announced. Its LG Chem division is going to open the doors for the facility in 2019 in Poland near Wroclaw, per Reuters, and the facility will be able to supply as many as 100,000 EV batteries per year beginning from next year.

For comparison, Panasonic’s latest battery facility in China can make enough to supply the production of around 200,000 vehicles per year, and the Gigafactory hopes to eventually produce enough for around 500,000 vehicles per year. Already, Musk said that the Gigafactory at its current capacity, which is nowhere near total eventual output, is producing more batteries than any other factory in the world, according to Elon Musk.

Battery production could become a major chokepoint for vehicle electrification as more automakers shift more of their model lineups to EVs and hybrids. More factories can definitely help, but supply of base materials could become an even bigger hindrance in future.

The other day we talked about electric car battery shortages and ideas for a BIG DEAL for General Electric Company.

I would RATHER see this on MY BATTERY

Recently we wrote on What Will Bring General Electric Back To The Top???

Feel like I do, contact General Electric.

Advertisements

GE finance chief Jeff Bornstein to leave company in high-profile shake-up

Beth Comstock, John Rice also to leave by end of year

Jeff Bornstein, the GE chief financial officer who was once considered a contender to succeed Jeff Immelt as chief executive, is leaving the industrial group at the end of the year amid a broad shake-up under new CEO John Flannery.

Mr Bornstein, who added the title of vice-chair only four months ago, will leave the company effective December 31, after 28 years. Jamie Miller, the current chief executive of GE Transportation, will take over his CFO duties from November 1. Ms Miller joined the company in 2008.

The Boston-based company also said late on Friday that two other vice-chairs would retire by the end of the year.

Maybe Mr.Flannery needs to re-read our recent blog on What Will Bring General Electric Back To The Top???

https://penneyvanderbilt.wordpress.com/2017/10/04/what-will-bring-general-electric-back-to-the-top/

What Will Bring General Electric Back To The Top???

Photo above is the General Electric Global Research headquarters just outside Schenectady, New York.

Every day I listen to business news. General Electric stock price is flat or dropped. Many people blamed the CEO Jeff Immelt. They got their wish and now and John L. Flannery has taken over.

When my boss started with the General Electric Company in the mid-1960’s, he always heard from old-timers how “the Lighting Business pulled GE through the Depression”. Now they need an 2017-version. Watch more news and see how automotive is going to ramp up electric cars. These things need batteries and better than they make now but at a better cost.

Now General Electric has a division called “GE Renewable Energy”. It is headquartered in Schenectady and it offers Wind and Hydro but also has a piece called “Innovative Solutions”.

Not, of course, going to tell Mr. Flannery what to do; but he should make the electric car battery a priority and make it a priority with the Research Center too!

Maybe it will become what turns the whole company around!!!

General Electric to Shut Down Its Corporate Jet Fleet

GE’s corporate jet fleet includes the Bombardier Challenger 605. Above, that model is displayed at an airshow in 2014. Photo: Krasilnikov Stanislav/Zuma Press

From Wall Street Journal

General Electric Co. GE +0.57% executives will have to find new ways to fly around the globe.

The conglomerate is grounding its corporate fleet of jets and preparing to sell them, as new GE chief John Flannery continues to look to slash costs at the industrial giant.

Mr. Flannery is cutting spending in GE corporate operations, including unwinding the internal airline for corporate executives, effective Wednesday, according to a person familiar with the situation. GE will still operate some helicopters and other aircraft, while using charter services as needed.

GE owns several business jets, federal records show, including at least two Bombardier Challenger aircraft. Its pilots for decades have shuttled executives to business meetings and operations around the globe, racking up hundreds of hours a year.

The company has required its chief executive to use private aircraft for all travel, including personal travel, for safety and security purposes, but the board recently changed that policy to allow for charter and commercial flights. With profits under pressure and sales pinched by weakness in parts of the company, Mr. Flannery is looking for ways to save.

”As we have said, we are executing on a plan to take out $2 billion in cost by the end of 2018,” a GE spokeswoman said. “As part of that effort, starting today, we are reducing the Corporate Air Transport services and will use charter companies as needed.”

GE disclosed that it spent $258,000 on personal jet travel for former CEO Jeff Immelt in 2016, counting only the “incremental” costs of the flights such as fuel and crew travel expenses. The company spent another $75,000 on personal travel for other top executives, it said.

The move marks a change from recent plans. When it relocated from Fairfield, Conn., to Boston, the company negotiated with city and state officials to secure parking at Logan International Airport for one executive jet and one helicopter, according to the agreement. The company also requested hangar space at nearby Hanscom Field that could fit six business jets, the documents show.

Mr. Flannery is trimming staff at the corporate level and recently delayed part of the construction of GE’s new headquarters complex in Boston, a relocation initiated by Mr. Immelt.

Mr. Immelt, who stepped aside on Aug. 1, pledged to boost cost-cutting earlier this year after talks with activist investor Trian Fund Management LP, which has been frustrated by missed profit goals at GE.

GE doesn’t just own business jets; it also supplies engines and other parts used on some business jets. The company also makes jet engines for commercial planes, and its GE Capital division has a large business of leasing aircraft, though it sold the unit that rents corporate jets in 2015.

In July, GE told investors they would have to wait until November to hear the new boss’s strategy for boosting results, but investors haven’t been waiting in selling their shares. The stock is down 23% this year amid a surging broader market and has lost 15% in the last three months alone.

Mr. Flannery, who formerly ran GE’s health-care unit, is meeting with small groups of investors and visiting the business units of the roughly 300,000-person company. He has said he would look at every aspect of the company and its strategy, although he won’t consider reducing its dividend.

Write to Thomas Gryta at thomas.gryta@wsj.com and Mark Maremont at mark.maremont@wsj.com

Owen D. Young

In 1929, Owen D. Young was named Time Magazine’s Man of the Year, and it wasn’t because he was Chairman of the Board of the General Electric Co.

Unlike other leaders in the history of the company, Young’s life and career isn’t defined simply by his GE resume. Instead, it was his work as a diplomat that earned him the honor from Time, two years after Charles Lindbergh was the first recipient of the award in 1927, and a year before Mahatma Ghandi gained that distinction in 1930. Also separating Young from the 12 other men who have been at the helm of GE is his strong connection to the region. He is the only CEO, president or chairman who was born in upstate New York, having grown up and spent much of his life in the small hamlet of Van Hornesville in the Herkimer County town of Stark.

“He was a very warm person and was always interested in what people were doing,” said Grace Faith, Young’s granddaughter and a Van Hornesville native now living in New York’s Southern Tier. “I was one of 11 cousins, and he was always interested in what we had to say and what we were all doing. He would always open his home to all of us, and I have personal letters that he wrote to me, like he did all his grandchildren. I think that says something about who he was.”

Young’s ability to connect with people of all types put him on the worldwide stage in 1924 and again in 1929, both times as part of an international committee dealing with German reparations following World War I. On the second occasion he was named chairman of the committee, and the program that came out of the conference was called the Young Plan. During this same time period, Young, who had joined GE in 1913 as its chief counsel, had also created the Radio Corporation of America in 1919 as a subsidiary of GE, and was named GE’s president and chairman of the board in 1922.

“He was a national statesmen who created RCA and really helped GE and the nation through the Great Depression,” said Chris Hunter, senior archivist at MiSci in Schenectady. “There was talk of him running for the presidency. He was a very important individual who would never forget his hometown.”

And in Van Hornesville, the town of Stark and Herkimer County, they haven’t forgotten him.

“To come from such a small hometown and become such a world figure is an amazing story,” said Sue Perkins, director of the Herkimer County Historical Society, who just last week led a successful cemetery tour in Van Hornesville, where one of the more popular stops was Young’s gravesite. “He was a lawyer, an industrialist, a businessman and a diplomat. When I was doing all the research for the cemetery tour, I went to see where he was buried, and I was thinking it would be something large and elaborate. It wasn’t. It’s small and very unassuming.”

As for running for president, town of Stark Historian Ronald Smith says Young never seriously considered it.

“I guess he might have thought about it a little, but he didn’t want to get too involved in politics,” said Smith, who grew up on the farm across the road from Young’s. “He’d rather try to do things his own way. He was a very good man, and a very smart man. He was always helping people.”

As a young boy, Smith, who is 79, remembers Young going out of his way to be a friendly neighbor.

“He was always coming over to my father and asking him how the family was doing,” said Smith. “He loved people and the people loved him.”

Historians have referred to Young as an advisor for five presidents (Wilson, Hoover, Harding, Coolidge and Franklin Roosevelt), and he was particularly close to FDR, bringing the then-governor of New York to Van Hornesville to speak at the first graduation ceremony of the Van Hornesville School District in 1931. Young had been the individual most responsible for the school consolidation project in that area, and when he died in 1962 the school was renamed in his honor.

“He was always interested in people who lived in the valley here, and he usually kept an office right in the village,” said Smith. “If you had a problem, you could ask him and he would always try to help. He was that kind of guy. He was also always interested in dairy farming, although he didn’t really do that much farming work himself, and would hire three to five men to do all the haying. But if a farmer or somebody had a problem, he had the knowledge and the desire to make arrangements for them and make sure they got some help.”

Born on October 27, 1874, Young went to St. Lawrence University at the age of 16, his parents paying for his education by mortgaging the farm. After graduating from St. Lawrence in 1894, he got his law degree from Boston University and joined a law firm in that city where he was noticed by Charles Coffin, the president of GE from its founding in 1892 to 1912. Coffin remained on as chairman until 1922, when Young took over. While Young remained chairman until 1945, his term as president ended within the first year with Gerard Swope taking over. An electrical engineer by trade, Swope’s time as president covered just about the same time span as Young’s as chairman. A native of St. Louis, Swope, according to GE historian George Wise, was another very civic-minded GE leader.

“Swope was Young’s partner; ‘Mr. Inside’ to Young’s ‘Mr. Outside,’ and he was at least as important and interesting as Young,” said Wise, a GE retiree who earlier this year produced an on-line book called “Edison’s Decision,” available at the Schenectady County Historical Society’s web site. “This is due to his major influence on national policies ranging from labor relations to social security. His ‘Swope’ Plan was a precursor to the first version of the New Deal, the National Recovery Act. Swope represented the view that a corporation should serve the balanced best interests of its shareholders, employees and customers, as opposed to the later view that a corporation’s only responsibility was to maximize shareholder value.”

While Young, as chairman of the board, oversaw Swope’s efforts as president, many of GE’s leaders in its 125-year history held both positions. They also used different paths to reach the top. Young did it as a lawyer and Swope as an engineer, although his scientific contributions to the company don’t nearly match his work in the financial and managerial realms. Most of the others, with the exception of Jack Welch, who had a Ph.D in chemical engineering, were either business or financial wonks. E.W. Rice, who succeeded Coffin and also had a strong connection to Schenectady having lived on Lenox Road for years, didn’t have a Ph.D or even a college education. He was, however, a brilliant scientist who became a very capable manager. And as for Coffin, he started out as a shoe salesman.

Jeff Immelt, Welch’s successor, and John Flannery, GE’s new CEO, both have business backgrounds, Immelt earning his MBA from Harvard and Flannery from Wharton.

One president who fails to get a mention on the company’s web site, ge.com, is Robert Paxton. Paxton was president in 1959 when Ralph Cordiner was chairman and CEO during the price-fixing scandal. GE admitted to some guilt and paid a heavy fine ($7,470,000) in 1962, but both Paxton and Cordiner were cleared of any legal wrongdoing and not indicted. While Cordiner retired in 1963, Paxton, much more complicit in the matter according to some historians, was immediately forced to resign and subsequently written out of the official line of succession.
General Electric executives over the years
Charles Coffin: Born Dec. 31, 1844 in Fairfield, Maine. Was GE president from its inception in 1892 through 1912, and chairman of the board from 1913-1922. Dies July 14, 1926.
Edwin W. Rice: Born May 6, 1862 in Lacrosse, Wisconsin. Was GE president from 1913-1922. Dies Nov. 25, 1935.
Owen D. Young: Born Oct. 27, 1874 in Van Hornesville, New York. Was GE chairman of the board from 1922-1939 and 1942-45. Also served as president of the company in 1922. Dies July 11, 1962.
Gerard Swope: Born Dec. 1, 1872 in St. Louis. Was GE president from 1922-1940 and from 1942-45. Dies Nov. 20, 1957.
Charles Wilson: Born Nov. 18, 1886 in New York City. Was GE president from 1940-41 and from 1945-50. Dies Jan. 3, 1972.
Philip D. Reed: Born Nov. 16, 1899 in Milwaukee, Wisconsin. Was chairman of the board from 1940-42 and 1945-1958. Dies March 10, 1989.
Ralph Cordiner: Born in 1900 in Walla Walla, Washington. Was GE president from 1950-58 and chairman of the board and CEO 1958-1963. Dies December 6,1973.
Gerald L. Phillippe: Born Sept. 27, 1909 in Ute, Iowa. Was GE president from 1961-63 and chairman of the board 1963-67. Dies Oct. 17, 1968.
Fred J. Borch: Born April 28, 1910 in Brooklyn. Was GE president and CEO from 1963-67 and chairman of the board and CEO 1967-1972. Dies March 1, 1995.
Reginald H. Jones: Born Julyl 11, 1917 in Stoke-on-Trent, England. Was GE chairman of the board and CEO from 1972-1981. Dies Dec. 30, 2003.
John F. Welch: Born Nov. 19, 1935 in Peabody, Massachusetts. Was GE chairman of the board and CEO from 1981-2001.
Jeff Immelt: Born Feb. 19, 1956 in Cincinnati, Ohio. Was GE chairman of the board and CEO from 2001-2017.
John L. Flannery: Born in 1962 in Alexandria, Virginia. Currently serving as chairman of the board and will become CEO on Jan. 1, 2018.

Froom St. Lawrence University Library

GE’s New Global Operations Center only one in U.S.

GE is accelerating the establishment of shared services to deliver better outcomes at lower cost for our businesses and customers. Called Global Operations, It is centralizing and simplifying these services to work smarter and more efficiently. Teams of experts at the Global Operations Center in Cincinnati, Ohio, span many functions, including: Accounting, Finance, Communications, Customs, HR, IT, Legal, Logistics, Project Management, Supply Chain, & Enterprise Data Management. They apply their expertise to business processes to make them simple, fast and more reliable, enabling our colleagues to compete and win in the global marketplace.

Cincinnati is one of the four locations for GE’s Global Operations Centers worldwide, with the other locations in Pudong, China; Budapest, Hungary; and Monterrey, Mexico. The Cincinnati Center currently houses approximately 1,000 people working in functions such as Finance/Accounting, HR, IT, Supply Chain, Legal/EHS and Commercial Operations.

The building features open and collaborative work spaces, including a mix of huddle spaces and workstations, with floor to ceiling windows providing sweeping views of the Cincinnati riverfront and downtown. Flexible and productive workspaces underpin GE’s culture and mission, and add to the overall atmosphere, energy, culture and collaboration. These work spaces are extensions of GE culture and motivate employees to contribute their best while maintaining a good work-life balance. The infrastructure and spaces in the new building supports GE’s culture of FastWorks and Lean and promotes collaboration.

1,800 employees projected to be employed at the Center by the end of 2017
We celebrate diversity! Some interesting statistics about our center include:
21 Nationalities represented
25 Languages spoken
50% women
12% of the new hires in 2016 are Veterans

MOTOR CARS TO DIESELS (MOSTLY GE)

In 1847 the Great Eastern Counties Railroad of England tried a 7-passenger steam-powered car. Like every railcar, its objective was to provide service cheaper than could be done with a regular train. Steam cars were used until around 1920. Compressed air cars were tried in the late 1870’s. Their range limited them to short runs. Battery-powered cars first appeared in 1880. Originally, they were also limited to short range, but eventually could cover 100 miles or more.

The gasoline (or alcohol or kerosene or whatever) engine was first built in the late 1880’s. The big hit was, of course, the automobile, but in 1890, the Patton Motor Car Co. demonstrated a gasoline-electric railcar. Others such as the Hydro Carbon Company of Chicago built gas-mechanicals without much impact. The McKeen Motor Car Company grew out of Union Pacific’s dislike of high branchline passenger costs. It was started in 1904, spun off from the UP in 1908, and folded in 1920. By 1913, 138 had been built. These pointy-nosed cars didn’t last because the power plant and drive equipment were not insulated very well from the rough tracks which usually comprised branchlines.

In 1904, the General Electric Company’s Railway Engineering Department recognized the potential of the gas-electric car. Henri G. Chatain, A. F. Batchelder and E. D. Priest were given some space in the Schenectady Works to begin development seriously. At that time, J. R. Lovejoy was the department general manager, William B. Potter was the chief engineer, and John G. Barry was the assistant manager.

Barry eventually headed the department and went on to become an industry leader through offices he held in the American Electric Railway Association. Potter was a veteran of electric traction. Beginning with the West End Railway in Boston, he worked on installation of systems in Albany, Utica and Saratoga. He invented the series-parallel controller used on most electric railways. His more than 130 patents included railroad control equipment, electric braking and switching equipment. He developed the otheograph used for recording the wheel action of various types of rolling stock. He participated in some of the major electrifications such as Milwaukee, Great Northern, Paris-Orleans and London Underground.

The best engine for their specifications was built by Wolseley of Great Britain. The Delaware & Hudson lent GE a Barney & Smith combine for experimenting. An ALCO motor truck was added on the front. Two 75 h.p. traction motors and a 600-volt generator were added. Once the huge engine was added, the baggage compartment was filled and the car weighed 68 tons. A trial run from Schenectady to Saratoga showed D&H 1000 (sometimes referred to as GE No. 1) could go 40 mph.

The designers, now joined by William Everett Ver Planck, decided their next car needed: light weight, greater power, single end control, and a more dependable engine. The engine was the most difficult to accomplish. In 1906, a Gas Engine Department was formed. A new V8 was developed that required an explosive charge to start. It weighed 3,900 pounds as opposed to the 7-ton Wolseley. GE No. 2 was an all-steel from Wason Mfg. Co. of Springfield, MA. The final weight was less than half that of car no. 1. This car trialed on the Lehigh Valley; Chicago Great Western; Dan Patch Lines; and the D&H. It was extensively damaged by hitting a locomotive on the Rapid City, Black Hills & Western. Car 2 was later sold to the Dan Patch Lines where it was destroyed in a 1914 fire.

A third GE demonstrator was built which incorporated even more improvements such as a 125 h.p. engine with compressed air starter. Car 3 eventually traveled 50,000 miles in demonstration service.

An attempt was made in 1909 to break into the street railway business. New York’s Third Avenue Railway Company had several “horse-powered” lines. Not wanting the expense of electrification, they had a “bake off” between the GE car and a battery powered one. The battery won.

By 1909, orders were coming in. Southern; Buffalo, Rochester & Pittsburgh; Frisco; and Dan Patch Lines. Many improvements were made by Hermann Lemp. In 1910-11, the Gas Engine Department moved to a new plant in Erie, PA.

Before production ceased in 1917, almost 100 motorcars were built. Several were oddballs. One for the Pittsburgh & Lake Erie was only 42 feet long (as opposed to 70-foot normal). It was designed to pull a trailer. One was built as a line car for the New York, Westchester & Boston. It was the only GE (except no. 1) without a Wason body. Some cars built for southern railroads had two doors – to comply with “Jim Crow” laws.

Operating costs ranged from 12 to 17 cents/mile. Cost of the cars was between $20,000 and $30,000. They usually ran with a crew of two (not withstanding labor agreements requiring more). Don’t forget though gasoline only cost 7 cents/gallon.

In the 1920’s, GE worked with Ingersoll-Rand on switch engines.

There was some degree of internal dissension within GE. Many would rather have sold all-electric. Little did they realize that non-electric would almost end electric.

GE’s history was wrapped around electric traction. In 1884, Frank J. Sprague, convinced that a street car could be powered by electricity from overhead cables, built a street railway in Richmond VA. By 1888, 40 cars were in operation. The Sprague Electric Railway and Motor Company joined the Edison General Electric Company in 1890.

Elihu Thomson and Edwin J. Houston, two science teachers from Philadelphia, formed a company in Lynn MA that also built streetcars. Their company merged into the Edison General Electric in 1892 to form today’s General Electric Company. One of their employees was Charles Van Depoele, a woodcarver whose trolley-pole proved practical for overhead electric operation.

By 1908, General Electric completed the electrification of Grand Central Terminal. Although this installation used direct current, Charles Proteus Steinmetz, GE’s “wizard of electricity”, developed methods of designing alternating current machinery that would assure the future of GE in electric propulsion.

A big competitor was Westinghouse Electric Manufacturing Company. Beginning in the 1920’s, they built the electrical gear for some diesel-battery cars. Most of these were for Canadian National. New Haven’s Comet of 1925 was an example of a 6-cylinder, 400 h.p. unit (run as a three-car articulate). Boston & Maine got a V-12 about the same time. Between 1928 and 1937 they built several locomotives with Baldwin.

In 1930 General Electric built 34 three-power oil-electric box cab switchers (class DES3) for the New York Central. These were used mostly in the New York harbor area because of their light weight and fire safety aspects. They used battery power for traction. The batteries could be charged through either third-rail contact shoes or a 300 h.p. diesel engine.

The Electro-Motive Company came into being in 1922 in a little shop in Cleveland, Ohio. It got into the railroad business by making gas-electric motor cars using carbodies from St. Louis Car, electrical gear from GE and engines from Winton. In 1930 both EMC and Winton became subsidiaries of General Motors. By 1934, a new factory was underway in La Grange and streamliners were produced for Union Pacific (“City of Salina”) and Burlington (“Zephyr”).

In 1938 a steam-electric locomotive was built for the Union Pacific. Later on, gas turbine locomotives would also be tried.

In 1945 Fairbanks-Morse entered the locomotive business but it didn’t have a plant. GE built 111 locomotives for them before they struck out on their own.

The success of Budd’s RDC prompted GE to draw up plans for a diesel-electric railcar with underslung engines. GE argued that an electric transmission would enable its car to out-accelerate RDC’s and to pull trailers.

In 1960, GE announced its intention to enter the road diesel market with a 2500 h.p. four-motor hood called a U25B (Universal line, 2500 h.p., B trucks). Growth and the overtaking of EMD was accomplished by making good on low fuel consumption, high reliability, attractive financing and favorable trade-in allowances. Over the last 29 years there were some rough spots.

A look inside: GE’s new office at The Banks has no offices

DOWNTOWN – Walking through General Electric Co.’s new office space at the Banks is akin to having a front-row seat to corporate transformation.

GE’s office building, ironically, is office-free. There are dozens of different types of workspaces available from partitioned desks to huddle rooms and multipurpose spaces with telepresence capabilities to a rocking chair in front of a window that overlooks Smale Riverfront Park and the Ohio River.

Floor-to-ceiling windows on each floor are standard. A grab-and-go cafe, game rooms, fitness center, building-wide WiFi and a landscaped outdoor seating and dining area are amenities more commonly at startup offices than those for a 124-year-old corporate giant.

Yet the new building offers GE the chance to reinvent its image in the eyes of workers, many of whom are new to the company. Only 20 percent of GE’s workers in Downtown Cincinnati are internal transfers. At the same time, the company’s global operations division wants to reshape how GE does business around the world.

GE Global Operations was established in 2011 to streamline the company’s operations and accelerate innovation. The Cincinnati center joins three others currently operating in China, Hungary and Mexico.

Standardizing functions in finance, human resources, information technology, supply chain management, legal and sales operations and also co-locating people who work in those roles could help GE become more nimble, company officials said. On a third-floor wall of the building, passers-by can see GE’s goal of being the world’s foremost digital industrial company.

Baker Hughes, A GE Company

A compelling, transformational combination

 The best partner to Oil & Gas customers … offering solutions based on
complementary equipment & services technology across the full spectrum
of the oil and gas value chain

 More innovative solutions to market faster and more cost effectively …
Baker Hughes’ leading products and services with GE Oil & Gas highly
differentiated manufacturing capabilities

 Best-in class physical + digital technology … combine Baker Hughes
domain expertise, technology and culture of innovation with GE Store and
GE industry-leading Digital Platform

 Value creation for customers and shareholders … positioned to weather
short-term volatility and participate in industry upcycle

Impact for Baker Hughes shareholders

 Ongoing ownership in a stronger, more competitive
business

 Cash dividend of $17.50 per share equal to 30%+ of
undisturbed share price

 Participation in substantial value creation through
synergies

 Revenue growth driven by increased customer touch
points

Deal overview

Merge GE Oil & Gas with Baker Hughes … GE owns 62.5%, new Baker Hughes owns 37.5%
+ Create new, publicly traded company with separate investor base
+ GE to contribute $7.4B to fund cash dividend to Baker Hughes shareholders upfront
+ Close expected mid-2017 … ~$.04 accretive to GE EPS in 2018

Combination of GE Oil & Gas & Baker Hughes establishes a new industry leader
+ 2x scale, complementary capabilities, more diversified
+ Can weather the cycle in short term & over time; significantly levered to recovery

Platform is positioned to deliver substantial customer value
+ Technical solutions  productivity
+ Best digital platform
+ Global execution

Synergy opportunity is substantial … cost and revenue
+ ~$1.6B synergies (~$1.2B cost & ~$0.4B revenue)

Disciplined capital allocation … O&G long-term fit for GE
+ Essential industry & fits GE Store

Efficient transaction structure using like-for-like equity with modest cash outlay
including disposition proceeds

See More about this transaction

So How is the 124-Year Old “Start-Up” Company Doing?

In Greenville, SC; G.E. makes gas turbines.(pictured above)  Because of digital technology and other improvements, the production time of 5 years has been cut in half.

In 2009, Jeffrey R. Immelt, CEO of General Electric, realized how much DATA was being collected by jet engines. It could be a lot of value, but G.E. was not really using it. G.E. needed to be more capable with SOFTWARE. G.E. was a manufacturer (turbines, locomotives, jet engines, medical equipment) but needed to treat Amazon and IBM as competitors.

At that time, G.E. was returning to its industrial roots, dumping GE Capital. In 2011, G.E. opened a Software Center in San Ramon, CA. The Center’s biggest mission is to build an “industrial-strength” computer operating system. You know, like ANDROID or WINDOWS! The aim is to realize this goal by 2020.

Instead of just dumping money into San Ramon, G.E. is involving the WHOLE COMPANY. Many of the 300,000 employees are traveling to San Ramon to “soak up the culture”. The goal is to move the digital wizardy of Silicon Valley into the rest of G.E. and into industrial manufacturing.

The big goal is to incorporate the “Internet Of Things” into something that helps manufacturers. For example, how about using sensors to decide when a machine needs repairs?

It will be a transformation. G.E. will sell “business outcomes” not just machines to it’s customers.

Google and Facebook revolutionized advertising. Amazon changed retailing. G.E. will change manufacturing.

Could be that the all the data and analysis will be worth more than the actual machines!!!

Starting out, GE Digital had some early reluctance to efforts to hire software engineers and scientists. But G.E. has always been great with advertising.

The “digital revolution” is already hitting railroad trains. At this week’s InnoTrans 2016 transportation trade show in Berlin, for example, GE is unveiling a “superbrain” platform for locomotives that transforms them into mobile data headquarters—helping make trains smarter and faster. “A decade from now, digital tools will take railroad productivity and efficiency to unprecedented levels,” says Seth Bodnar, chief digital officer at GE Transportation. “The whole network will light up like a brain.”

It’s about time. Bodnar’s train brain will help railways boost locomotive horsepower, improve operations and burn less fuel. “It’s really about enabling self-aware trains in a smart ecosystem,” he says.

Written by Ken Kinlock