GE reorganisation leaves healthcare division unchanged
24 June 2005
Fairfield, Conn. USA. General Electric has reorganised its vast business
empire from 11 units into 6 industry-focused businesses: GE Infrastructure;
GE Industrial; GE Commercial Financial Services; NBC Universal; GE
Healthcare; and GE Consumer Finance. "This change allows us to leverage our
exceptionally deep leadership team to accelerate growth and improve
productivity," said Geff Immelt, GE CEO.
In GE Healthcare, Joe Hogan has been named President and CEO. He will
succeed Sir William Castell when Castell retires from Healthcare in 2006, in
accordance with his wishes. GE's Healthcare business will continue to be
based in London. "Bill has brought tremendous vision to our Healthcare
efforts and will continue to be an important part of our leadership team,"
Immelt said. Sir William came to G.E. in 2004 in the acquisition of
Amersham, a maker of medical diagnostics equipment. According to the New
York times, Sir William's future board service is undecided.
New vice-chairmen will lead three of the businesses: Dave Calhoun, 48,
Infrastructure; Michael Neal, 52, Commercial Financial Services; and John
Rice, 48, Industrial. As vice chairmen of the company, they will act as
advisors to the GE Board of Directors. All three are experienced GE leaders
and currently presidents and CEOs of GE businesses.
GE Infrastructure, led by Dave Calhoun, will include Aircraft Engines,
Rail, Energy, Oil & Gas, Water and the financial verticals associated with
these industries. "Dave will lead our efforts to penetrate fast-growing
global infrastructure markets," Immelt said. "This organization will
accelerate our progress in developing markets like China, India and the
Middle East. Leveraging common technology and services will also result in
substantial gains in productivity."
GE Commercial Financial Services, led by Mike Neal, will include Commercial
Finance and Insurance. "Mike will continue to build our commercial finance
assets in exciting global markets," Immelt said. "At the same time, he will
continue our strategic process in insurance. Mike will chair the GE Capital
Board. Our risk policies will remain unchanged. GE CFO Keith Sherin will
have responsibility for financial services risk oversight."
GE Industrial, led by John Rice, will include Plastics, Silicones/Quartz,
Consumer & Industrial, Security & Sensors, Automation, and Equipment
Services. "John is one of our best operating leaders," Immelt said. "He will
accelerate our efforts to improve growth rates, margins and cash in these
"These changes will accelerate GE's growth in key industries," Immelt
said. "We have been moving toward a more customer-focused organization for
several years. In addition, we believe we can reduce $200-300 million of
cost in savings and structural redundancies."
The operating structures of NBC Universal, led by GE Vice Chairman Bob
Wright, and Consumer Finance, led by Dave Nissen, are unchanged.
Ralph Larsen, presiding director of the GE Board and chairman of the
Management Development and Compensation Committee, said, "These changes are
the culmination of a long series of reviews with the GE Board for well over
a year. We feel that they strengthen the management team, retain the best
talent and broaden the experience base of our next generation of leaders."
Other changes include putting in place a line-up of leaders that will
drive the Company for the future. Reporting to the six businesses are 35
operating leaders, 40% of whom are global and diverse.
Immelt also announced that GE Vice Chairman Dennis D. Dammerman, who has
been with GE for 38 years, will retire at the end of this year.
"Dennis Dammerman's value to GE cannot be overstated," Immelt said. "He has
helped lead the growth of our financial services businesses, helped build
our financial and controllership capabilities and has been a teacher,
advisor, counselor to innumerable GE executives, including me.
"These changes are a natural evolution in a company like GE," Immelt said.
"We have a profound commitment to investors that we will always attract,
train and promote great people. We are putting a terrific team on the field
for the future. And we do this at a time of strength. Our Company is in
great shape and positioned for continued double-digit earnings growth,"
Immelt said. "We are on track to hit our earnings estimates of $.43-.45 per
share for the second quarter and $1.78-1.83 per share for 2005. We see
continued double-digit growth into 2006 and beyond."
Immelt also said the changes would enhance the company's financial
transparency by providing key financial data for significant units within
the six businesses.
An organization chart can be found at www.ge.com.