GE announced in November that it will go forward as three separate companies. Today, GE Chairman and CEO Larry Culp published a note to employees that outlines the steps the company plans to take to get there. “For GE in 2022, our destination is clear,” he wrote. “We are on a path to become three stronger, more focused companies positioned to lead in the important high-growth sectors of aviation, healthcare and energy.”
The engine powering GE on the journey is lean management, the business philosophy focused on continuous improvement; its core tenets are safety, quality, delivery and cost (SQDC). Culp said that SQDC was “foundational to running a company well and delivering for our customers” and that there was “intention in the order of these words. Safety is first because it is the base that all our work builds on. Fortifying our culture of safety is always our top priority,” he said.
Culp and GE started implementing lean across the company when he took over as chairman and CEO in 2018. “We have made real progress in building a stronger GE financially — reducing our debt by more than $80 billion through the end of 2021 — and operationally through lean over the past few years,” he wrote. “Our continued deleveraging and scaling of lean company-wide will further solidify our financial position and allow GE to play more offense through organic and inorganic growth opportunities.”
The progress allows GE to “lead in areas of urgent global need — the future of flight, precision health and the energy transition,” Culp said. “These are big challenges, and our customers deserve and demand our best work.” To that end, he said, in 2022 GE will laying be the “groundwork for the creation of three independent companies — starting with Healthcare — positioned to succeed on their own.”
He said that GE will “establish each standalone company with well-capitalized balance sheets and investment-grade ratings. As independent companies, each will benefit from greater focus, tailored capital allocation decisions and strategic flexibility to better serve their customers and respond to distinct industry requirements and dynamics.” He said the independent companies “will also be able to move quicker to capture the significant growth opportunities that lie ahead.”
Said Culp: “Ten days into 2022, our work has already begun. I am excited for our road ahead.”
Read the full note here.
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