Stokes’ email today stated that there will be more reductions in “structural cost” within Power, and that they will be implemented with urgency.
We all know this means more heads will roll (and soon). Just hoping the packages aren’t further reduced from their paltry current state. Good luck to all...may you each find something better soon, and be treated as a valued employee.
Alstom power was bankrupt long before ge got ahold of it. And is the single reason power is having these issues. Time to close down the alstom plants.
Alstom were no 1 in steam turbines. GE wrecked that
Per yesterday's press release, it is now called "Goodwill math". But otherwise your comment is spot on.
Synergy math :
1 + 4 = 3
GE (#1) + Alstom (#4) = GE (#3)
Strictly confidential . Proprietary formula of GE CAS.
"That's GE thinking and why GE has failed."
I may not have explained clearly enough. My rough numbers were based on what I have seen done before and yes leadership will look at financial ratios and one will likely be revenue/head. So I am not justifying it but explaining how the reduction could be estimated. If you run a business with 60K employees this one way to set some targets. Next step is to decide what you will continue to do (and invest in) and what you will stop. Across the board cuts just bleed the patient to death.
There is no way they would combine Power with Aviation because their cost structure flows directly in to DOD and other government contracts. Also, why would you screw up what is viewed as your crown jewel?
"Headcount reduction needs to be at least 10-15%"
That's GE thinking and why GE has failed.
In broad categories there are two groups in GEP. One group needed to maintain and sell the current fleet. Given that parts revenue is way down, there don't need to be nearly as many as those, guess a 20% reduction now with more reductions to follow. The second group is the group needed to field new products. They want to be smart here. GE is slow in fielding new products, too conservative in it's known risks and makes mistakes with it's unknown risks. The culture is all wrong. Wrong in 20/20 hindsight and no sign of being right going forward. What to do? Kill it now? Maybe. Depends on a gut call by the new boss. My guess is that he'll either put an outsider in charge or merge it all into aviation. Dealer's choice.
High school football deserves better
I have been with GE for nearly 40 years in Aviation, and currently Power. I have seen this transition before and frankly have been surprised how slowly it has happened. Historically, you can get an estimate of $revenue/head from "good times" or competitors to current figure out the magnitude of the cuts. If you use Aviation as a benchmark as a gold standard, 2017 Revenue/employee is $27.5B/40K employees or $690k/head. Power 2018 guess is $30B/65k is $462k/head. Headcount reduction needs to be at least 10-15% but attrition is trending towards 5%. If revenue is less than the $30B, just adjust by ratio. I would also expect additional rooftop and management layer consolidation.
They should start with Stokes. He should be coaching high school football.