One Sunday in March, Gary Wiesner, who runs General Electric Co.’s wind-turbine-blade factory in Pensacola, Fla., received something he’d never gotten before: a personal email from the CEO. H. Lawrence Culp Jr. wanted to know if it would be OK if he came for a visit.
When Culp arrived two days later, alone, in jeans, it marked the first time a GE chief executive officer had visited the plant since the company bought it 18 years ago. He spent about two hours walking the floor and chatting with technicians, stopping only briefly for a call with the board of directors.
A longtime devotee of Toyota-style lean manufacturing, Culp was in his element. While overhead screens flashed measurements of the production pace in eight-hour increments, Culp wondered aloud if the metrics were visual enough and whether they could be broken down into 20-minute or even 10-minute slices, so workers would know sooner when they might be falling behind on their goals. At the tour’s end, he urged them to face up to production issues as early in the process as possible—or, as he put it, “Let’s make it red, make it ugly, let’s go fix them,” Wiesner recalls. A half-hour after leaving, Culp sent another email promising to return.
The wind turbine business is among the least of Culp’s worries. GE’s balance sheet is lopsided with debt, its GE Power division is shedding millions of dollars in cash daily, the stock price is barely in double digits, and the Securities and Exchange Commission is investigating the company’s accounting practices. Nonetheless, Culp’s Pensacola visit is a telling example of how the first outsider to run GE is trying to fix it, metric by metric.
(SIDE NOTE:-) More Layoffs to come white and blue collar, and plant closings!
Since taking over as CEO on Oct. 1, he’s eschewed the company’s Boston headquarters for frequent travel, spending day-and-a-half sessions with GE units around the world and meeting with CEOs at Boeing, Duke Energy, and Safran, among other customers. In May, the night before his appointment to see FedEx Corp. CEO Fred Smith, he flew to Memphis to watch a million-odd packages handled in the “night sort” at the company’s main shipping hub. Culp ordered almost 50 GE business heads to take off June 10-14 for an on-the-factory-floor, “true-lean” manufacturing boot camp that he’s helping to teach.
None of this would surprise people who worked with Culp in his 14 years as CEO at Danaher Corp., the low-profile industrial conglomerate. On his watch, Danaher grew fivefold in revenue while Culp, in the mold of GE legend Jack Welch, oversaw scores of acquisitions. And like Welch, Culp isn’t the sort to buy a company and forget it. It wasn’t unusual to see Culp moving equipment around in factories or strolling trade shows seeking time with customers. While studying an orthodontics company Danaher had bought, Culp decided he could best understand its customers by testing the product himself. “Probably he didn’t need braces, but he got braces,” says Vicente Reynal, who ran that business for Culp.
Culp retired from Danaher four years ago at the age of 51. The behemoth he’s charged with rescuing is, with $120 billion in annual revenue, six times the size of that company, with quadruple the number of employees. GE Power, which produces electricity-generating equipment, is by itself larger than Danaher. Whereas Culp expanded his former company with acquisitions, his first job at GE will be to shrink it. At Danaher he could mostly ignore an outside world that mostly ignored him—a luxury he no longer enjoys.
Culp is an “inspired choice,” but the skills he honed at Danaher—buying companies and making them more efficient—don’t prepare him for the mess at GE, concluded research firm Paragon Intel in a recent report. JPMorgan Chase & Co. analyst Stephen Tusa, who predicted GE’s collapse before his peers, has argued that there still hasn’t been a true accounting of the extent of the company’s problems.
Culp’s many acolytes aren’t fazed. Jim Lico, who worked for him at Danaher and now runs Fortive Corp., a Danaher spinoff, says that when he heard of his old boss’s new job, he bought a “meaningful” chunk of GE stock. “And I think most of the people that have worked for him did, too,” Lico says. “When you look at how Danaher changed over the course of his CEO tenure, there might not have been as many zeros behind the numbers, but the work he did to build Danaher was every bit as risky” as what he confronts at GE.
Culp himself doesn’t seem terribly worried, either. “Is it more challenging? I can’t say that it is,” he said in a brief phone interview in January, sounding supremely confident, or deeply delusional, or possibly both. “I wish I had more hours in the day, I wish we had started sooner, but I can’t deal with any of that. We’re just trying to make progress a little bit every day.”
The magnitude of GE’s fall probably helps Culp by giving him a longer leash with investors than his predecessors. Wall Street was always skeptical of Welch’s successor, Jeffrey Immelt, who overpaid for some early acquisitions and later committed the cardinal sin of cutting the dividend. Then John Flannery was too busy dousing fires during his short reign to build rapport with shareholders. Culp brought his gleaming Danaher résumé and zero GE baggage. Although it’s not at all clear that he can return GE to its past glory, he probably can’t make things much worse.
Good read but there is no saving GE Power! Those who stay in GE Power are very foolish and are very unskillful. Any educated or uneducated worker can see what is about to happen. No union or Government can stop this from happening. Plant closings and more Layoffs on a higher scale.