SLIDE 1
G E G E D I V E V E R S I F I F I C AT I O N S T R AT E G Y: J A J A N E L I , H O J I N PA R K , D OYO U N G , J U L I A S H Y U S T S T R AT E G I C M A N A G E M E N T N O N O V E M B E R 7 T H
T H,
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v“Diversification is essential for consistent financial performance in volatile times. We navigated our Aviation business through the 9/11 crisis when engine shipments declined 20%. Since then, Aviation earnings have tripled and our share has grown. Our shipments of gas turbines declined by 65% between 2001–2004 as a “U.S. bubble” for power generation burst. Yet we have a stronger Power business today. Through those cycles, the “Big GE” protected the businesses and gave them strategic flexibility. That gives us confidence as we approach a difficult Oil & Gas cycle. Between 2014–2016 we expect our Oil & Gas earnings will decline 20–25%. Like past cycles, the strength throughout GE is being transferred to our Oil & Gas business. We are able to invest more in R&D, something our competitors can’t do. We are providing lower-cost solutions to our customers that allow them to sustain at current resource market
- pricing. And we can invest in new assets based on favorable economics. As in the tough
times in Power and Aviation, our investment in Oil & Gas is a long-term proposition powered by the basics of a vital industry. Our portfolio is set. Going forward, we will get more value from our market position by leading the digital wave that is reshaping the industrial world.” – Jeffrey Immelts, GE Integrated Report, 2015