07.27.10
3. GE Healthcare
$16 Billion ($157B total)
KEY EXECUTIVES:
Jeffrey R. Immelt, Chairman and CEO
John Dineen, President and CEO, GE Healthcare
Frank Schulkes, VP and CFO, GE Healthcare
Mark L. Vachon, President and CEO, GE Healthcare Americas
Omar S. Ishrak, President and CEO, GE Healthcare Systems
Peter McCabe, President and CEO, Surgery
Pascale Witz, President and CEO, GE Healthcare, Medical Diagnostics
Brian Masterson, VP, Global Supply Chain, GE Healthcare
NO. OF EMPLOYEES: 46,000 (304,000)
GLOBAL HEADQUARTERS: Fairfield, Conn.
From light bulbs to refrigerators, jet engines to handheld ultrasounds, and transportation management to oil and gas discovery—and a slew of industries in between—General Electric is the quintessential American conglomerate. In fact, this year, Forbes magazine has rated GE the second-largest company in the world. Within its diverse product mix is, of course, one of the world’s largest medical technology companies: GE Healthcare.
GE’s shear size wasn’t enough to keep it immune from the effects of the worst recession the world has seen in generations. In fact, its breadth of product lines probably made it more vulnerable—GE Capital, Aviation, Consumer Appliances. You get the picture.
According to Jeffrey Immelt, GE’s chairman and CEO, the company wants to “help lead an American growth renewal.” Over the course of fiscal 2009, the company has tried to restructure and refine to stay competitive. Since 2008, GE has invested close to $3 billion in restructuring, closed more than 400 facilities, and cut its workforce by 10 percent in an effort to create a “leaner and more agile company.”
But Immelt is quick to caution that all this belt tightening isn’t without a goal and is leading to eventual growth in new markets, development of new products and the creation of jobs in previously untapped areas. GE plans to add nearly 1,200 jobs in Michigan over the next decade to accelerate the company’s capacity in manufacturing. Another 1,000 jobs are planned for Louisville, Ky., to make the next generation of smart appliances. In addition, expansion is planned for Mississippi, South Carolina, Ohio and other regions across the country.
Overall, the company’s full-year revenues decreased 14 percent to $156.8 billion. Full-year earnings from continuing operations were $11.2 billion, down 38 percent from $18.1 billion in 2008. Earnings per share were $1.03, down 42 percent from 2008. Overall segment profit fell 27 percent compared with 2008, largely due to a decline of 73 percent at GE Capital Finance and 28 percent at NBC Universal. Revenue for GE Healthcare was $16 billion, down from $17.4 billion in 2008. Profit for the division was $2.42 billion, down from $2.85 billion in the prior fiscal year.
Healthcare remains part of the company’s growth strategy. GE Healthcare plans to invest $6 billion by 2015 for lower-cost medical equipment and care around the world, at the same time increasing earnings at its medical systems and bioscience division. The company unveiled a program in 2009 modeled after GE’s “ecoimagination” marketing campaign and product development initiative into green technologies.
The company calls it “healthymagination.” The new program will focus on rural and emerging markets, developing low-cost equipment, as well as helping hospitals become more efficient and reduce costs. Roughly $3 billion will be spent on healthcare innovation that will help deliver improved care at a lower cost. In addition, the company plans $2 billion of financing and $1 billion in related GE technology and content to drive healthcare information technology and health in rural and underserved areas.
According to GE officials, the company will launch at least 50 basic products tailored to rural or emerging markets, such as the lightweight portable electrocardiograph machines the company has developed for India. According to industry analysts, it’s unlikely that such low-cost products will boost the company’s lackluster earnings in the near term. GE executives, however, believe the strategy will position them to benefit from healthcare-related stimulus spending and global population trends over the long haul. The program is in response to new opportunities the company has recognized in healthcare, officials said.
“Our newest innovations—low-cost digital X-ray machines, portable ultrasounds, more affordable cardiac equipment—will save costs for doctors, hospitals, the government, families and businesses. This will help level the playing field in healthcare. With our technology, rural and urban areas and developing countries can have access to the best technology, affordably,” Immelt said.
John Dineen, president and CEO of GE Healthcare said, it was the “right time to reposition” the business given the changes and challenges in the industry.
The division isn’t retreating from expansion completely, however. It built a new $165 million digital mammography production facility in North Greenbush, N.Y., in the Rensselaer Technology Park at Rensselaer Polytechnic Institute (RPI). The new 230,000-square-foot facility added 150 high-paying manufacturing jobs in Rensselaer County with an annual payroll of $10 million. While other GE businesses have a long history in New York, this was the first expansion of high-tech medical equipment manufacturing by a GE Healthcare operation in New York.
Leading the Diagnostic division’s efforts is Pascale Witz. She was named president and CEO of the division last year. In her most recent assignment, Witz led GE Healthcare’s Healthcare Systems Interventional business, which develops technologies to help physicians diagnose and treat disease earlier, faster and more accurately.
Another growth area that GE isn’t planning to ignore is the burgeoning field of home health, which analysts consistently point to as one of the next big blockbuster sectors for medical device development. In December, GE Healthcare bought Living Independently Group Inc., the provider of QuietCare, a passive monitoring system used to assist in the care of seniors. The acquisition follows the September 2008 announcement that GE Healthcare had acquired a minority ownership stake in Living Independently Group and that the two companies had agreed to market and co-develop the QuietCare technology globally. Financial terms were not disclosed.
QuietCare is a passive activity monitoring system that uses wireless sensors to non-intrusively track the daily patterns of seniors’ activities. QuietCare alerts caregivers to behavioral changes that may signal potential health issues or emergency situations, allowing earlier intervention.QuietCare is used in many assisted living facilities and senior communities across the United States, GE officials said. In April 2009, GE Healthcare and Intel announced an alliance to invest $250 million in the development of new technologies to assist independent living for seniors and patients with chronic diseases.
$16 Billion ($157B total)
KEY EXECUTIVES:
Jeffrey R. Immelt, Chairman and CEO
John Dineen, President and CEO, GE Healthcare
Frank Schulkes, VP and CFO, GE Healthcare
Mark L. Vachon, President and CEO, GE Healthcare Americas
Omar S. Ishrak, President and CEO, GE Healthcare Systems
Peter McCabe, President and CEO, Surgery
Pascale Witz, President and CEO, GE Healthcare, Medical Diagnostics
Brian Masterson, VP, Global Supply Chain, GE Healthcare
NO. OF EMPLOYEES: 46,000 (304,000)
GLOBAL HEADQUARTERS: Fairfield, Conn.
From light bulbs to refrigerators, jet engines to handheld ultrasounds, and transportation management to oil and gas discovery—and a slew of industries in between—General Electric is the quintessential American conglomerate. In fact, this year, Forbes magazine has rated GE the second-largest company in the world. Within its diverse product mix is, of course, one of the world’s largest medical technology companies: GE Healthcare.
GE’s shear size wasn’t enough to keep it immune from the effects of the worst recession the world has seen in generations. In fact, its breadth of product lines probably made it more vulnerable—GE Capital, Aviation, Consumer Appliances. You get the picture.
According to Jeffrey Immelt, GE’s chairman and CEO, the company wants to “help lead an American growth renewal.” Over the course of fiscal 2009, the company has tried to restructure and refine to stay competitive. Since 2008, GE has invested close to $3 billion in restructuring, closed more than 400 facilities, and cut its workforce by 10 percent in an effort to create a “leaner and more agile company.”
But Immelt is quick to caution that all this belt tightening isn’t without a goal and is leading to eventual growth in new markets, development of new products and the creation of jobs in previously untapped areas. GE plans to add nearly 1,200 jobs in Michigan over the next decade to accelerate the company’s capacity in manufacturing. Another 1,000 jobs are planned for Louisville, Ky., to make the next generation of smart appliances. In addition, expansion is planned for Mississippi, South Carolina, Ohio and other regions across the country.
Overall, the company’s full-year revenues decreased 14 percent to $156.8 billion. Full-year earnings from continuing operations were $11.2 billion, down 38 percent from $18.1 billion in 2008. Earnings per share were $1.03, down 42 percent from 2008. Overall segment profit fell 27 percent compared with 2008, largely due to a decline of 73 percent at GE Capital Finance and 28 percent at NBC Universal. Revenue for GE Healthcare was $16 billion, down from $17.4 billion in 2008. Profit for the division was $2.42 billion, down from $2.85 billion in the prior fiscal year.
Healthcare remains part of the company’s growth strategy. GE Healthcare plans to invest $6 billion by 2015 for lower-cost medical equipment and care around the world, at the same time increasing earnings at its medical systems and bioscience division. The company unveiled a program in 2009 modeled after GE’s “ecoimagination” marketing campaign and product development initiative into green technologies.
The company calls it “healthymagination.” The new program will focus on rural and emerging markets, developing low-cost equipment, as well as helping hospitals become more efficient and reduce costs. Roughly $3 billion will be spent on healthcare innovation that will help deliver improved care at a lower cost. In addition, the company plans $2 billion of financing and $1 billion in related GE technology and content to drive healthcare information technology and health in rural and underserved areas.
According to GE officials, the company will launch at least 50 basic products tailored to rural or emerging markets, such as the lightweight portable electrocardiograph machines the company has developed for India. According to industry analysts, it’s unlikely that such low-cost products will boost the company’s lackluster earnings in the near term. GE executives, however, believe the strategy will position them to benefit from healthcare-related stimulus spending and global population trends over the long haul. The program is in response to new opportunities the company has recognized in healthcare, officials said.
“Our newest innovations—low-cost digital X-ray machines, portable ultrasounds, more affordable cardiac equipment—will save costs for doctors, hospitals, the government, families and businesses. This will help level the playing field in healthcare. With our technology, rural and urban areas and developing countries can have access to the best technology, affordably,” Immelt said.
John Dineen, president and CEO of GE Healthcare said, it was the “right time to reposition” the business given the changes and challenges in the industry.
The division isn’t retreating from expansion completely, however. It built a new $165 million digital mammography production facility in North Greenbush, N.Y., in the Rensselaer Technology Park at Rensselaer Polytechnic Institute (RPI). The new 230,000-square-foot facility added 150 high-paying manufacturing jobs in Rensselaer County with an annual payroll of $10 million. While other GE businesses have a long history in New York, this was the first expansion of high-tech medical equipment manufacturing by a GE Healthcare operation in New York.
Leading the Diagnostic division’s efforts is Pascale Witz. She was named president and CEO of the division last year. In her most recent assignment, Witz led GE Healthcare’s Healthcare Systems Interventional business, which develops technologies to help physicians diagnose and treat disease earlier, faster and more accurately.
Another growth area that GE isn’t planning to ignore is the burgeoning field of home health, which analysts consistently point to as one of the next big blockbuster sectors for medical device development. In December, GE Healthcare bought Living Independently Group Inc., the provider of QuietCare, a passive monitoring system used to assist in the care of seniors. The acquisition follows the September 2008 announcement that GE Healthcare had acquired a minority ownership stake in Living Independently Group and that the two companies had agreed to market and co-develop the QuietCare technology globally. Financial terms were not disclosed.
QuietCare is a passive activity monitoring system that uses wireless sensors to non-intrusively track the daily patterns of seniors’ activities. QuietCare alerts caregivers to behavioral changes that may signal potential health issues or emergency situations, allowing earlier intervention.QuietCare is used in many assisted living facilities and senior communities across the United States, GE officials said. In April 2009, GE Healthcare and Intel announced an alliance to invest $250 million in the development of new technologies to assist independent living for seniors and patients with chronic diseases.