Dear fellow shareholder,

First, a sincere thank you for sharing your ideas and counsel over the last year. When I began as CEO, it was critical for me to listen, not just to replicate what’s worked for me elsewhere. Your feedback is playing an important role in our efforts to make GE a stronger, more valuable company.

As I laid out in my last letter, I want this document to serve as a reference point for how we run the company so that we can all keep score together. Looking back at 2019, I hope you see a GE that diligently addressed its most pressing issues with grit and reset its foundation to drive long-term profitable growth. I am proud of the progress our team made together, especially in how we operate. While the impact of this work is only starting to become visible to our investors, I’m confident that the “game of inches” we’re playing will become more evident through our results over time.

From the outset, we focused 2019 on two strategic priorities: 1) improve our financial position and 2) strengthen our businesses. We’re doing what we said we would do on both fronts, and we’re on a positive trajectory for 2020.

1. Improve our financial position

Last year, I shared that GE had too much debt and we needed to reduce it thoughtfully and soon. Our work is by no means finished, but we are on the right path.

In 2019, we moved with speed on asset sales to demonstrate that we are serious about reducing both our Industrial and Capital leverage. We began to put that cash to work, including a tender offer for $5 billion of outstanding Industrial debt.

Looking forward, we expect to achieve our leverage targets in 2020. Closing the sale of our BioPharma business and selling our remaining 37-percent stake in Baker Hughes over time will give us more cash to further reduce our Industrial leverage, including pre-funding our U.S. pension and repaying GE’s loan from GE Capital. This in turn will help GE Capital reduce its external debt, including $16 billion that matures in 2020.

2020 Leverage Targets

2. Strengthen our businesses

As we solidify our financial position, it is our next priority—strengthen our businesses—that will drive our long-term transformation. We began with the premise that the people closest to the customer know best how to serve them, so we shifted resources and accountability from Corporate to empower our business units and removed overhead layers in Power and Renewable Energy. These efforts will continue into 2020 and beyond.

We got back to basics in how we work, standardizing common operating metrics with safety always at the core and focusing our attention on customers, operations, and priority-setting. I’m also encouraged by how our team is embracing candor, transparency, and humility with each other. We can solve just about any challenge we encounter, but to do so, we need to put the good and the bad on the table in equal measure. While it takes discipline, we’re fostering this at all levels of the company.

The best tool I know to drive this type of positive change at a fundamental level is lean management, in which a relentless focus on customer value helps leaders get to the root cause of problems, continuously eliminate waste, and ruthlessly prioritize their work. Over the course of 2019, we laid the foundation to apply lean more systematically across GE, driving better results and, in turn, a better culture.

In my experience, lean transformations succeed when the senior team leads by example. So, in June, more than 100 of our leaders and I spent five days at Power in Greenville, South Carolina, for a Lean Action Workout. We divided into 10 teams focused on improving our gas turbine manufacturing, repair, and services.

We failed a lot that week. We tried things that didn’t work and went back to the drawing board to attack the problem differently. Doing this day after day, a remarkable thing happened. Rather than growing tired with each turn, the teams became more energized. Vidya Ravishankar from the materials planning team in Greenville summed up the week perfectly when she said: “The energy levels just kept skyrocketing. The senior leadership at GE cleared their calendars and focused—with such respect—on the problem.” It was an important moment. And a really fun week.

After Greenville, we held lean events almost every week across the company. One of the most pleasant surprises for me as the year went on was the flood of people who began reaching out, raising their hands, and looking to help. Phil Lawrence, a welder at our Aviation Component Service Center in Springdale, Ohio, shared with me how he was hopeful the changes they were making at his site would stick. His site leaders were unequivocal; if anything started to slide back to the way it was, they told him, he should call them immediately. Phil shared that he had never experienced that attitude before at GE—and that improvements at the site were only accelerating.

Across our businesses and around the world, we’re using lean to make real improvements in safety, quality, delivery, and cost. For example, in 2018, a different Aviation plant in Batesville, Mississippi, was losing up to 15 percent of its output due to production defects. Using lean tools, the plant has been able to reduce losses by more than 60 percent so far, saving millions of dollars’ worth of waste. And it applies well beyond manufacturing; our Digital team uses lean to shorten the time it takes for our customers to install or update our software while also creating software for customers to map and eliminate waste in their own processes. This is resulting in significantly quicker turns; for example, we reduced planned downtime on a software upgrade for one major manufacturer by 50 percent.

There are thousands of opportunities like this within GE, each representing untapped potential for customers and investors. This is why prioritizing the goals toward which we channel these improvements is so important. Our new series of operational, talent, strategic, and budget reviews is helping our leaders define what “game” we are playing in each business and how we “win.” At the same time, we’re consciously aligning our incentives with yours, tying our business teams’ compensation more closely to their repective business’ results as well as executive compensation more closely to GE’s stock performance.

Additionally, I spent significant time making sure we have the right leadership in place. More than two-thirds of my direct reports are new to GE or their role since I began as CEO, and I’m looking forward to welcoming our new CFO, Carolina Dybeck Happe, to the team in March. Our new, smaller Board is also now in place, which today includes 10 directors, seven of whom are new to the Board since 2017 and four of whom are women—bringing fresh perspective, diversity of thought, and the right experience for GE. This is a board that is dedicated to doing what is right for the company and has tough, direct, and substantive discussions. GE is becoming a better company as a result.

Overall, as I think about the thousands of employees and customers I met with this year, each interaction has only deepened my excitement about our work. Our people are committed, capable, and enthusiastically driving these changes, and our customers are rooting for us. As we move forward with our lean transformation, we are not looking to simply “check the box.” We are changing the way we run GE, business by business, every day, from the bottom up.

Let me now take you through what our progress looks like by business.

“We're doing what we said we would do, and we're on a positive trajectory for 2020”

General Electric


We focused much of our energy this year on Power, and our progress illustrates the type of improvements we can make across the company over the long term. Power drove tremendous change in 2019, starting by separating Gas Power from Power Portfolio to improve visibility and accountability in these businesses. In Gas Power, the team reduced fixed costs by 10 percent* and narrowed the perimeter of projects it goes after, setting evaluation standards across price, terms, and scope. It also booked 13.6 gigawatts in gas turbine orders during the year, including its 100th HA turbine order and launched its new 7HA.03, now the world’s largest and most efficient gas turbine.

Power Portfolio, which includes Steam, Power Conversion, and GE Hitachi Nuclear, also improved its commercial discipline and cost structure, applying more rigorous daily management both in our operations and at our job sites. The team is focusing on subsegments where we have a differentiated market position, like medium voltage and complex systems in Power Conversion.

Power’s focus on daily management, particularly on the project side, is creating a lower-risk, higher-margin backlog for the future. I’m pleased with the progress Power made in 2019 and look forward to more in 2020.

Renewable Energy

Renewable Energy is well positioned to serve clean energy markets that are expected to grow rapidly over the coming decades.1 In 2019, we brought all of GE’s renewable and grid assets into this business, creating a differentiated offering that can both produce renewable energy and reliably and safely integrate it into electrical grids. The team achieved record unit volume for onshore wind turbines in 2019 while securing nearly 5 gigawatts of commitments for its new offshore wind turbine, the Haliade™-X.

Broadly, though, Renewable Energy’s performance was mixed. I think about the dynamics at play in Renewable Energy in three parts. First, Onshore Wind is our most established, profitable business, and it is meeting high customer demand and growing internationally. Second, we’re placing technology bets in fast-growing markets. In October, for example, Offshore Wind successfully installed the prototype for the Haliade-X, which already is breaking records for power production by a wind turbine. Third are our required turnarounds in Grid Solutions and Hydro. Improving project underwriting and daily execution here will be a major focus for us in 2020.


Aviation delivered strong performance, closing its 100th year of operation with over $270 billion in backlog and an installed base of more than 64,0002 commercial and military engines. This fleet is poised for growth; for example, in our commercial business, nearly 70 percent of the CFM56 fleet has had one or fewer shop visits. As these engines fly for decades to come, they will continue to produce predictable revenue.

That said, 2019 wasn’t without its challenges. Our team worked diligently to support our customers following the grounding of the Boeing 737 MAX, never wavering in their commitment to safety while navigating near-term industry disruption. LEAP continues to be a strong engine program for us, and we delivered 1,736 LEAP engines to Airbus and Boeing platforms in the year.

Aviation’s long-term end-market fundamentals remain attractive, and the team is introducing advanced technologies in growing commercial and military markets. For example, in commercial, Aviation’s newly certified Passport™ engine powered Bombardier’s record-breaking flight between Sydney and Detroit in October, and the GE9X™—the world’s largest, most powerful jet engine—is on track for certification in 2020. In military, Aviation’s new T901 was selected for the U.S. Army’s Improved Turbine Engine Program to power its next-generation Apache & Black Hawk helicopters. Finally, just like in Springdale and Batesville, teams across Aviation are identifying new opportunities to improve their operations.


Healthcare performed well in 2019, growing its backlog to $18.5 billion and segment profit margins to 19.5 percent. The team is at the center of an ecosystem striving for precision health. By bringing together our machines with software, analytics, and artificial intelligence (AI) through our Edison software platform, Healthcare is helping make care delivery more efficient and personalized.

We launched seven new “mission control” Command Centers with customers in 2019, which use predictive analytics and AI to help hospitals coordinate patient care more efficiently. Healthcare also introduced on-device AI on equipment like our Revolution™ Maxima CT, where AI helps position the patient more precisely to improve efficiency, accuracy, and patient comfort during the scan.

We still see room for improvement in Healthcare, particularly driving faster growth and margin expansion in Healthcare Systems. The business is embracing lean throughout its operations; at one lean event at our MR production facility in Florence, South Carolina, the Healthcare team identified $50 million of potential savings in just four days. Even in this strong business, we’re able to deliver further upside.

This is GE: four mission-critical, global industrial businesses, each with growing backlogs and sizable installed bases where services represent more than half of our revenue and give us daily opportunities to serve our customers. GE Capital’s financing capabilities, including at GE Capital Aviation Services (GECAS) and Energy Financial Services (EFS), catalyze new growth and opportunity for our Industrial businesses and customers, enabling more than $6 billion in Industrial orders in 2019.

We’ll continue to shift people, processes, and accountability to the businesses to be closer to customers and reduce cost at Corporate. But if you look at what ties GE together, our “mortar between the bricks”—such as GE Research’s advanced work in technology and material science, Digital’s industrial software and services, and our local capacity and global organization—is helping our businesses serve their customers better and set GE apart.

Investing for the future

Dawn Hall, Operation Management Specialist, from GE Gas Power in Greenville, South Carolina.

Alex Saldana, the Executive Project Fulfillment Leader in charge of commissioning and testing the Haliade-X.

A GE Additive AddWorks team in Cincinnati, Ohio review a 3D printed helicopter engine frame designed for a CT7.

Scott Strazik, CEO of GE Gas Power, with leaders from GE’s customer Azito Energie S.A. in Abidjan, Côte d’Ivoire.

Alexis Conway, a Manufacturing Improvement Specialist, works to lean out inspection processes on the GE9X.

Santhosh Kumar C from GE's Edison Engineering Development Program presents in our ForGE Lab in Bangalore, India.

Over 60 GE wind turbines work together at Meikle Wind Farm, the largest wind farm in Western Canada.

Leader Milena Chapuis and Manufacturing Process Engineer Estelle Le conduct a quality check on GE Healthcare's production line.

GE Healthcare's Hino factory has been applying lean for decades, now using software like GE Digital's Proficy Operations Hub.

Path to growth

Our priorities looking forward are clear. We are solidifying our financial position, continuing to strengthen our businesses, and driving long-term profitable growth. As we execute, we can grow our revenues profitably while improving our overall cash generation—and we will.

GE’s mission also holds a larger purpose. It always has. Communities around the world want to generate more sustainable growth, broadening access to electricity, healthcare, and transport to enable a better quality of life for their citizens. And we have the long-standing knowledge of local markets, deep expertise in technology and financing, and the ability to manage complex global supply chains to help our customers execute these critical infrastructure projects and be a partner in their progress.

One of the most urgent challenges I’ve heard from our customers is finding a way to build all of this while reducing their greenhouse gas emissions. Our leadership and Board are focused on this, too. Investing in efficient technology is an important part of the solution, and we’ve been working on this for decades—from building the world's most powerful offshore wind turbine and 100th HA turbine order and launched its new 7HA.03 most efficient gas turbine, to creating jet engines that are significantly more fuel-efficient than their predecessors, to developing breakthroughs in grid-scale energy storage and enabling combustion of carbon-free fuels like hydrogen. While there’s more work ahead, GE will continue to be at the center of the energy transition in the years to come.

GE’s people rise to challenges like this in every corner of the world every hour of every day. Our leading technology, global network, and exceptional team, anchored in the service of others, are the same strengths I shared with you in this letter last year. I’m confident in our future, even more now than a year ago, because of them.

And atop this bedrock we are making real progress. One Friday morning in October, I drove up to Aviation’s plant in Lynn, Massachusetts, where a lean event had just taken place. What I observed there gave me so much pride and hope. One team, flush with excitement, described how they’d significantly reduced production time on an engine part. In response, Barbara Colby, a material handler, urged her supervisors to keep the operators’ momentum going. “Don’t let them off the hook,” she told her colleagues. I know they won’t.

I hope you will hold us to this same level of accountability as we transform GE, one day at a time. We are doing it from a place of greater strength and with a mission that matters—building a world that works. Thank you for joining us on this journey.

Larry Culp signature

H. Lawrence Culp, Jr.
Chairman of the Board and Chief Executive Officer
February 24, 2020

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Forward-looking Statements

Some of the information we provide in this document is forward-looking and therefore could change over time to reflect changes in the environment in which GE competes. For details on the uncertainties that may cause our actual results to be materially different than those expressed in our forward-looking statements, see We do not undertake to update our forward-looking statements.

Image Caption

Header Image: Kevin Jones, a Development Assembly Mechanic, performs a perfection review on the propulsor for GE Aviation’s GE9X engine before it is shipped for certification testing.

Middle Image: Wysheka Austin, Senior Operations Manager, works on a combustion unibody for GE Gas Power's 7HA gas turbine in Greenville, South Carolina.

Final Image: Larry Culp with Joe Newkold, Combustors Repair Operations Leader at GE's Aviation Component Service Center (ACSC) in Springdale, Ohio. Continued improvement actions out of a December Lean Action Workout at ACSC are driving toward a fifty-percent reduction in turnaround time at the site, positively impacting both customers and GE's bottom line.

* Non-GAAP Financial Measure

1 IEA, Offshore Wind Outlook 2019, World Energy Outlook special report, November 2019

2 Including GE and it's joint venture partners

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