GE restructures business

29 July 2008

GE has restructured its operations into four divisions from six, with healthcare now joined with Aviation, Transportation and Enterprise Solutions in the GE Technology Infrastructure 'segment'.

GE Chairman and CEO Jeff Immelt said, “GE is a global infrastructure, finance and media company that is well positioned to capitalize on some of the major growth themes of this era. With the announcement of our focus on a possible Consumer & Industrial spin-off, we can structure the company in a simpler way that can maximize future growth.”

“Infrastructure leads our growth, with revenues approaching US$90bn. Our infrastructure businesses are all global, technology based and have dynamic service opportunities. The new organization will put two strong leaders in position to drive execution,” said Immelt.

Effective immediately, GE moves from six to four segments, including two infrastructure segments:

  • GE Technology Infrastructure — led by Vice Chairman John Rice, this segment includes Healthcare, Aviation, Transportation and Enterprise Solutions. These businesses have opportunities to leverage technology, software and engineering.
  • GE Energy Infrastructure — led by newly appointed Vice Chairman John Krenicki, this segment includes Energy, Oil & Gas and Water. These technologies already work together with large customers, particularly in emerging markets.
  • GE Capital — Led by Vice Chairman Mike Neal, this segment aggregates all the financial service businesses including Commercial Finance, GE Money, industry verticals (GECAS, Energy Financial Services), and Corporate Treasury. This organization will improve GE Capital’s opportunities to allocate capital, grow globally and reduce cost.
  • NBC Universal — led by Jeff Zucker this segment is unchanged and will continue to focus on its strategic evolution through globalization and diversification.

“We have been upgrading our portfolio of businesses and simplifying our organizations for market focus, efficiency and execution,” Immelt said. “We have higher-growth, higher-margin businesses and organizationally have simplified the company from 11 business segments in 2001 to four segments today. At the same time, we have structured the company to best utilize our strong leadership team while maximizing synergy and execution.”

GE's second quarter revenue (to 30 June) was up 11% to $46.9bn but consolidated net earnings were down 6% at US$5.1bn. The healthcare segment revenue was also up 11% at US4.5bn, but earnings were up 8% at US$747m.

Earlier this month GE announced the appointment of John Dineen as president and CEO of GE Healthcare. Dineen, 45, is a 22-year GE veteran and since 2005 has been president and chief executive officer of GE Transportation, a $4.5 billion global leader in the rail, mining, marine, drilling and wind industries. In his new position, Dineen will be located in London, where GE Healthcare is headquartered.

Before leading GE Transportation, Dineen served as vice president and general manager of Plastics at GE Advanced Materials and held various assignments in Corporate Finance. Dineen also served as general manager of GE Power Equipment; general manager of the Meter business; general manager of the Microwave and Air-conditioning businesses; manager of finance for GE Asia in Hong Kong; and president of GE Plastics-Pacific. He joined GE in 1986 as a telecommunications engineer.

Dineen succeeds Joseph Hogan, who has taken a position outside the company as CEO of ABB.

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