Flexibility, Speed: Essential to Thrive in Today’s MarketBy Sofía Hanna | Wed, 09/21/2022 - 10:16
Q: GE has entered a new era with the introduction of three independent areas: GE Healthcare, GE Vernova and GE Aerospace. What results does the company expect from this change?
A: This decision represents a significant step forward for the company, which has a history of 126 years and has continuously adapted to the new trends and demands of the market. This move aims to separate our business sections into completely independent companies, with unique boards and talent development strategies tailored to each specific area.
GE will seamlessly combine its renewable and energy divisions into GE Vernova. Together with GE Aerospace and GE Healthcare, these three units will individually move faster and create more value for our customers, employees and stakeholders.
Q: How will this plan improve the company's financial position and operating performance?
A: Customers, employees and stakeholders had a positive reaction to the news. They recognize that GE is constantly evolving and innovating, while always maintaining its core in each different phase of the company. We plan to have completely independent and functional organizations, each with their own capital allocation and investment. This change has given the market and stakeholders a positive signal from a financial perspective because of the great opportunity it provides to continue growing.
Q: What role does Mexico play in the modern GE?
A: Mexico is a key market around the world and especially for us. Mexico was GE’s first international market and we have been in the country for over 100 years. Mexico is among the 20 largest and most important markets for GE as it is one of the two largest economies in Latin America after Brazil.
The energy sector is essential for GE and it is our most important industry in Mexico, as half of our operations in the country are energy-related. Mexico has an advantage in its numerous partnerships and trade agreements, especially the USMCA. Having the biggest economy in the world as a neighbor and business ally presents many business opportunities.
Q: GE Healthcare will start operations in 2023. Why was the decision made to start in this area?
A: The separation of GE’s business units will be split into two phases. The first phase, the separation of GE Healthcare will take place next year. The second step will be the launch of both GE Aerospace and GE Vernova. The timing was decided due to the complexity of this process, as it involves splitting one company with over 100 years of history.
Q: Why, despite global uncertainty, is this the best time for GE to divide its business units?
A: It is necessary to move with the market. If one waits for the best time, you risk missing out on the opportunities the industry generates. To take risks and to keep evolving, we need more agile and faster businesses.
Q: GE Aerospace’s predecessor GE Aviation is one of the largest aircraft engine manufacturers in the world. How relevant will GE Aerospace be for the Mexican market?
A: GE has over 60 percent of participation in the airplane engine industry, with more than 39,000 engines in operation globally. Every two seconds, one airplane with a GE engine takes off. In Mexico, we have important clients like Aeroméxico, which flies a 100 percent GE fleet.
GE Aerospace will be valued at over US$20.2 billion, while also being one of the Top 3 commercial engine developers worldwide.
Q: How is GE Aviation adapting to electrification and how will this trend transform the aerospace industry?
A: Many key players in the industry are starting to experiment and try new fuels, engines and mechanisms to electrify their systems. Aerospace is one of the most important sectors around the world. Considering the large number of people flying at any given moment, it makes the reliability of the equipment a priority. Therefore, it will be some time before these new systems arrive in the commercial aviation sector.
In Mexico, we have the largest number of engineers developing products for the aerospace industry. Over 1,800 engineers work in innovation and technology centers in Queretaro. The future independence of GE Aerospace will give the business the freedom it needs to develop new technologies faster.
Q: Mexico hosts one of GE's four innovation and technology labs. Why did the company choose Mexico?
A: Over 23 years ago, GE was looking to accomplish three objectives: globalize product development, find available talent and identify more cost-effective solutions. Mexico was selected because of its young talent and highly competitive environment and cost. Those reasons led to the development of the Queretaro Center, which now has 1,800 engineers dedicated to this industry.
Q: Many companies are facing a continuous lack of talent and talent turnover. How has the company dealt with this issue?
A: Globalization and the COVID-19 pandemic drastically increased the opportunities to work remotely, so employers compete both with businesses inside and outside of Mexico. We face the same difficulties as other businesses and address this problem by adding value and meaning. There is young talent available in Mexico but it is necessary to invest in it. Our strategy has been to bring in and invest in young talent.
Q: How does sustainability impact GE’s operations across different industries and how are your new projects geared toward a greener future?
A: Sustainability is essential for GE. We are already committed to be a carbon-free company by 2030, which is a key opportunity to develop new technology. Innovation is part of GE’s DNA. Anything that helps the world is part of GE’s mission.
General Electric Company (GE) is a US multinational with over 125 years of history and best known for its work in the power, renewable energy, aviation and healthcare industries.