GE will reorganize its Energy business into three standalone businesses
FAIRFIELD, Conn.--(NYSE: GE) – GE announced today that it will reorganize its Energy business into three standalone businesses effective in the fourth quarter of 2012. The Energy headquarters organizational layer will be phased out by the end of 2012. This change will speed decision making, reduce layers and decrease cost.
GE Energy Infrastructure includes approximately 100,000 employees and will have revenues of approximately $50 billion in 2012. The three new businesses will report directly to GE Chairman and CEO Jeff Immelt:
*GE Power and Water, led by GE Senior Vice President and Power and Water CEO Steve Bolze, is headquartered in Schenectady, NY. It provides full lifecycle solutions for power generation customers, including renewable energy and water processing technologies. It will have approximately 41,000 employees and planned revenue of approximately $28 billion in 2012.
*GE Oil and Gas, led by GE Senior Vice President and Oil and Gas CEO Dan Heintzelman, is headquartered in Florence, Italy. It provides equipment and services for all segments of the offshore and onshore oil and gas industry, including turbomachinery and drilling and surface, subsea, and pipeline equipment and services. It will have approximately 33,000 employees and planned revenue of approximately $15 billion in 2012.
*GE Energy Management, led by GE Senior Vice President and Energy Management CEO Dan Janki, is headquartered in Atlanta, Georgia. It consists of technology solutions for the delivery, management, conversion, and optimization of electrical power for customers across multiple energy-intensive industries. It will have approximately 27,000 employees and will have planned revenue of approximately $7 billion in 2012.
GE will begin reporting separate segment financial results for these three businesses beginning with the fourth quarter of 2012.
GE today delivered its ninth consecutive quarter of strong operating earnings growth. GE remains on track to deliver double-digit earnings growth in 2012 in its Industrial businesses, GE Capital and GE Energy.
Immelt said, "Big companies are always fighting organizational complexity. We are taking action at a time when the Energy business is doing well. The business had a solid quarter with earnings up 13% and has a big backlog of great products. Removing layers is one way to reduce costs and increase our speed, focus and agility in the marketplace so we serve customers better.
"This move will greatly simplify the way we communicate to investors and customers," Immelt said. "We have built three strong franchises with solid growth prospects for each in the future. Our Energy portfolio is well positioned for future growth, our commitment to having the best technology is paying off with customers and we will continue to invest in our growth and competitiveness capabilities."
GE Vice Chairman and GE Energy Infrastructure CEO John Krenicki will oversee the transition to the new Energy structure during the third quarter. During the fourth quarter, he will continue to serve as a GE vice chairman and advisor to Immelt. Krenicki has decided to leave the company at the end of 2012.
Immelt said, "In his 29 years with GE, John Krenicki has always made decisions with the best interests of our shareholders and our customers first. The decision to simplify the Energy Infrastructure business shows the kind of leadership John has demonstrated over the years. He will leave behind a tremendous legacy of operating businesses, and developing talented leaders."