Over the past two years, communications is what Mr. Immelt has done. And I am not talking about his addressing as much Wall Street through some dedicated channels as the public at large (customers and potential investors alike). Indeed, chances are you've seen Immelt's positions on ecomagination or US executives pay.
On the other hand, the year of the large cap stocks, as the investment analysts dubbed 2006, is coming to an end, yet few large caps have done as well as predicted. GE stock price returned to $35, where it started the year, after it reached a low of $32. So, not counting the dividends, GE would have been in business for itself had one considered only its stock price.
From an interview with Mr. Immelt, recently published in Financial Times, we learn more about his perspectives on the world as it relates and surrounds GE. This is the type of statements that we seldom learn from CEOs for it says little about here and now. Moreover, his opinions may well indicate, even if indirectly, what has been going on at GE over the past year or two. Here they are, followed by my comments:
"If you put globalisation to a popular vote in the US, it would lose. It is anissue on which business has to find better ways to present its case."
"If we didn't have access to global markets we would lay people off in Cincinnati and Milwaukee, so [globalisation] is real."
"If the US continues on the current trend towards a service-based economy, it could easily end up with wealth concentrated on the two coasts and bigger discrepancies between rich and poor."
"People think that running GE is like driving a stagecoach: if horse number three breaks down, take it out and shoot it. This way you develop a management team that would rather be bought than stay to fix things and build businesses for the long term."
"Private equity funds are the conglomerates of this era. Strategic buyers have not seized the moment in terms of doing deals they could have done to build their companies for the long term. The vast majority of them only add value through financial, rather than operational improvements. If you took any of GE's top managers and told them that you have to bring the [profit] figure from 4 to 7 in three years, and then they could drop the reins, almost any of them could do it."
"There are people who like thematic work, who build their careers two years at a time, but I want to hire people who are curious to see stuff through to the end."
"I would not tolerate anybody in the company being satisfied with being number four."
As if to match words with personal commitment, in the last 12 months, Mr. Immelt has bought GE stock in the open market for which he paid over $2M. Statements and actions like the ones above should make GE the favorite supplier and employer of most, which in turn will translate in great financial returns. A big question mark remains though. In a June interview with HBR, Mr. Immelt said:
"If we can create a sales and marketing function that is as good as finance at GE, I'll change this company."