2014 in Review: GE’s Industrial Revolution

2014 was in many respects a pivotal year for GE, in which the company delivered on plans to bulk up its industrial core and grow its services by connecting machines to the Industrial Internet.

2014 was in many respects a pivotal year for GE, in which the company delivered on plans to bulk up its industrial core and grow its services by connecting machines to the Industrial Internet. By 2016, GE plans to reap 75 percent of earnings from industrial businesses, with the rest coming from GE Capital, its financial arm. Here are the year’s milestones.

In February, GE launched new Distributed Power business. The unit is already helping companies, regions as well as entire countries move from reliance on centralized power to localized power generation. 

In March, GE Healthcare Life Sciences acquired for $1 billion three subsidiaries of Thermo Fisher Scientific to become a one-stop shop for development and manufacturing of biologics, the fastest growing segment of the drug industry.

In April, GE launched its largest acquisition in history, a $13.5 billion bid to acquire the thermal power, renewable energy and electricity grid businesses of the French engineering company Alstom. The deal, which was approved by Alstom’s shareholders in December, is expected to close in 2015. Alstom’s expertise in steam technology will allow GE to build more efficient combined-cycle power plants, and expand its installed turbine base by 35 percent. 

In July, GE sold to the public shares of Synchrony Financial, its North American retail finance business. “This is a good transaction for GE shareholders,” said Jeff Immelt, GE chairman and CEO. “The IPO furthers our strategy to position GE Capital as a smaller, safer, specialty finance leader, and achieve 75 percent of our earnings from our Industrial businesses by 2016.”

In September, GE agreed to sell its Appliances division to Sweden’s Electrolux. Like the Alstom and Synchrony deals, the $3.3 billion all-cash sale was part of GE’s plan to center the company’s core around its industrial units.

In October, GE opened its Predix software platform for the Industrial Internet to software developers. In December, Japan’s SoftBank became the first company to license Predix. GE has spent more that $1 billion to launch its global software center in San Ramon, Calif. The company estimates that the convergence of machines, data and analytics will become a $200 billion global industry over the next three years.

GE’s industrial businesses released a number of new products, including Harriet, the world’s largest most efficient gas turbine, the first locomotive that meets tough Tier 4 environmental standards, and the next-generation LEAP jet engine with 3D-printed parts, which GE makes in a joint-venture with France’s Snecma (Safran).

GE has also delivered on simplification and FastWorks, a set of tools and principles designed to transform GE culture into a leaner and faster company working close to customers. In 2014, the strategy yielded a new power plant for power-hungry Africa and other technology.

 

Looking out to 2015, Immelt told investors in December that he saw the strongest growth from GE businesses like Aviation, which builds jet engines and benefits from a global boom in travel, and Power & Water, focused on building out infrastructure in the developed world but also parts of Asia and Africa. Despite the drop in oil prices, Immelt also sees long-term growth at GE’s Oil & Gas unit.

For more stories like this, visit GE Reports.

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