$18.29 Billion ($147.3B total)
Jeffrey R. Immelt, Chairman & CEO, General Electric
John Dineen, President & CEO, GE Healthcare
Frank Schulkes, VP & Chief Financial Officer, GE Healthcare
Marcelo Mosci, President & CEO, GE Healthcare Americas
Tom Gentile, President & CEO, GE Healthcare Systems
Rachel Duan, President & CEO, GE Healthcare China
Akihiko Kumagai, President & CEO, GE Healthcare Asia Pacific
Brian Masterson, VP, Global Supply Chain
Hooman C. Hakami, President & CEO, Detection & Guidance Solutions, GE Healthcare France
Jean-Michel Malbrancq, President & CEO, GE Healthcare Europe
Joe Shrawder, President & CEO, GE Healthcare Latin America
Terri Bresenham, President & CEO, GE Healthcare India
Kieran Murphy, President & CEO, Life Sciences
Jan De Witte, President and CEO, Healthcare IT and Performance Solutions
James Corrigan, President and CEO, Surgery
Mike Swinford, President & CEO, Global Healthcare Services
NO. OF EMPLOYEES: 54,000 (305,000)
GLOBAL HEADQUARTERS: Fairfield, Conn.
Jeffrey R. Immelt has quite the selection of unconventional calling cards at his disposal: MRI machines, steam turbines, hybrid locomotives, transformers, panelboards, fuel dispensors, capacitors and inverters.
But last fall, the longtime General Electric chairman and CEO chose a Boeing 787 Dreamliner jet engine to mark his company’s admission to the big (data) league. Flanked by the 12-foot-tall contraption on a small stage in San Francisco’s Potrero Hill neighborhood, Immelt unveiled an initiative dubbed the “Industrial Internet” (also known as the “Sensor Revolution” or “Internet of Things”)—an open, global network connecting people, data and machines. Before letting audience members marvel at the magnificence of the Boeing engine, Immelt announced nine new technologies/services focused on product diagnostics software and analytics that will help the world’s airlines, hospitals, railroads, manufacturers and utility companies increase productivity and eliminate $150 billion in waste. The philosophy behind GE’s initiative is simple: Connecting industrial machinery to the Internet could boost efficiency across all global industries by 1 percent (it may not seem like much, but a 1 percent gain in proficiency could save the global energy industry $66 billion, the healthcare industry $63 billion and the aviation industry $30 billion, according to GE).
“It’s about making infrastructure more intelligent and advancing the industries critical to the world we live in,” Immelt explained to shareholders in the company’s 2012 annual report. “…it’s about the future of industry—energy, healthcare, transportation, manufacturing. It’s about making the world work better.”
GE estimates the Industrial Internet could bolster global productivity gains by as much as $15 trillion by 2030. Norfolk Southern, for instance, already is using a GE data/analytics system to optimize train and cargo movement across its rail network; executives estimate that every 1 mph increase in network speed could save the company $200 million in annual capital and operating expenses. Similarly, the Hospital Operation Management (HOM) solutions program launched in Manhattan’s Mt. Sinai Hospital in 2009 enables the renowned healthcare institution to track 15,000 assets and has improved patient throughput by 10 percent. The HOM system tracks various hospital data—from bed assignments, equipment management, transportation and workflow—to ensure quality patient care is provided.
Besides turning it into a serious player among the big data firms, GE’s Industrial Internet effort could help the multinational conglomerate solidify its presence in Sub-Saharan Africa, a region that seldom attracted investment dollars when Immelt became CEO in 2001. The area now generates roughly $3 billion in annual revenue for GE, and Immelt expects that number to double in the next few years as its investments in technology and personnel spawn mini-$1 billion franchises in Angola, Mozambique, Nigeria and South Africa—four of the Dark Continent’s most promising markets.
“Strategy is about making choices, building competitive advantage and planning for the future. Strategy is not set through one act or one deal. Rather, we build it sequentially through making decisions and enhancing capability,” Immelt wrote in his
annual letter to investors. “A GE annual report has never fully featured software and Africa. Today, we feel they are essential and we can lead. Our ability to create our own future is why GE can win in any environment.”
Even in economically challenging settings. Last year, the company’s segment profits grew 11 percent to $22.9 billion and cash from operating activities jumped 48 percent to $17.8 billion, according to GE’s 2012 annual report. Though its full-year revenues remained flat at $147.35 billion, the firm nevertheless navigated a tough turnaround, returning $12.4 billion of cash to investors through dividends and stock buybacks, and growing its total shareholder revenue 21 percent, well ahead of the 16 percent growth among most S&P 500 entities. In addition, GE’s market cap swelled by $30 billion, and its backlog (orders booked) increased to a record high of $210 billion.
Much of the company’s financial good fortune last year was driven by growth in its seven business segments, all of which posted a profit for the first time since 2006. Oil & Gas led the charge, generating an additional 16 percent in revenue ($15.2 billion), followed by Energy Management, which boosted earnings 15.4 percent ($7.4 billion), Transportation, which improved its balance sheet by 14.8 percent ($5.6 billion) and Power & Water, which generated the most revenue for GE ($28.3 billion) in 2012 but posted the fourth-lowest surplus (8 percent). Healthcare, on the other hand, barely enhanced its earnings but was the third-highest moneymaker, collecting $18.29 billion in the 12-month period ending Dec. 31. The total represented a 1.1 percent increase compared with the $18.08 billion the segment generated for GE in 2011.
Healthcare’s profits were considerably more sound, rising 4.1 percent to $2.9 billion on higher volume and increased productivity. GE executives attributed the growth in both revenue and profits to improved equipment sales and robust product demand, particularly in emerging markets.
Such demand compelled GE to open its first customer innovation center last spring in Chengdu, the capital of Sichuan Province in southwest China, a region that has morphed into a leading economic, transportation and communication center. In 2007, the World Bank christened Chengdu a “benchmark city for investment…in inland China.”
Located in the west park of the ancient city’s High-tech Industrial Development Zone, the $80 million innovation center features 360,590 square feet of R&D and office space, 30 laboratories and state-of-the-art equipment designed to help GE tackle some of China’s most critical environmental and healthcare needs, including shale gas drilling technology, green energy and industrial automation solutions.
Seven weeks after opening the Chengdu Innovation Center, GE unveiled a second facility 1,859 miles to the northeast in Xi’an (the capital of Shaanxi Province) to develop products and solutions in lighting, aviation and energy.
“We believe the customer innovation centers we have built in China’s hinterland is a perfect fit to the country’s ongoing shift in growth pattern,” GE Greater China President/CEO Mark Hutchinson said at the Xi’an Innovation Center opening in mid-July 2012. “These facilities are more than regular corporate R&D institutions. They will play an instrumental role in building out much-needed local innovation capabilities in these areas, enabling a healthy innovation ecosystem essential for sustainable growth.”
The innovation centers, however, are just one component of GE Healthcare’s overall plans for The Middle Kingdom. The
company hopes to increase its small city/rural area sales from 20 percent to 50 percent in less than five years through dozens of new product releases, a majority of which will be targeted at China’s primary care market. To achieve its goal, the company
intends to help small medical facilities (generating between 5-12 million yuan) finance their purchases, GE Healthcare China President and CEO Duan Xiaoyin told the Chinese news website Morningwhistle.com last fall.
GE Healthcare executives also solidified the division’s emerging markets footprint last year with the purchase of Xpro, a Brazilian manufacturer of interventional X-ray equipment. GE added the company to its Detection & Guidance Solutions segment, which grosses $2 billion globally, employs about 1,700 people and markets various devices and related medical equipment in the United States, China, France, Hungary and India. The deal gives GE targeted, lower-cost devices it can sell to the developing world through its global marketing reach.
The company entered a few unconventional markets as well, opening a new $4.6 million cell science laboratory center in
Cardiff, Wales, to develop novel technologies for drug development, cell bioprocessing and cell therapy; introducing a pocket-sized ultrasound visualization tool (Vscan) in Mexico, and becoming an official partner of the XXX Olympiad (Summer Games) in London, United Kingdom.
The polyclinic GE built in London’s Olympic Village gave the company unparalleled exposure to more than 200 potential markets and 10,000 future customers. The facility was equipped with the latest imaging technology, including two advanced magnetic resonance imaging scanners (Discovery MR750w wide bore 3T and Optima MR450w wide bore 1.5T, both with GEM Suite), the Discovery 750HD computed tomography (CT) scanner, the Discovery XR656 wireless digital X-ray system, and the Venue 40 and LogicIQ E9 ultrasound scanners. Several MAC 5500 electrocardiography (ECG) diagnosis systems also were on hand to monitor, analyze and interpret heart rhythms, and the Centricity RIS/PACS system provided necessary clinical data to medical staff.
GE received U.S. Food and Drug Administration approval for the CT750 HD FREEdom scanner about a week before the Olympic games began last July. The CT750 was built to address the “foremost challenges in cardiac CT such as radiation dose, calcium blooming, coronary motion, high heart rates, plaque composition and myocardial perfusion, according to the company.
“We believe the traditional challenges of cardiac CT are in large part beatable with a smarter software and electronic approach,” Steve Gray, vice president and general manager for CT and advantage workstation at GE Healthcare, said at the time of approval. “FREEdom Edition offers physicians a new tool to help overcome coronary motion, and various artifacts that may stand in the way of a highly accurate, confident cardiac diagnosis in a variety of clinical settings.”
The CT750 features exclusive FREEdom technologies (Fast Registered Energies and ECG) that provide a three-prong solution to traditional cardiac CT challenges: Motion FREEdom, which corrects unwanted motion through a program called SnapShot Freeze; Calcium FREEdom, which gives doctors a better view of the body’s coronary system (using Gemstone Spectral Imaging); and Horizon FREE opportunities, which allow clinicians to better evaluate the makeup of plaque material and more accurately calculate blood delivery to capillary beds.
GE claims that SnapShot Freeze can help significantly reduce coronary motion and overcome the inherent limitation of all hardware-only solutions. By precisely detecting vessel motion and velocity, SnapShot Freeze can determine actual vessel position and intelligently correct the effects of motion during cardiac CT exams. Bench-top evaluation of SnapShot Freeze intelligent motion correction has demonstrated that the technology can achieve a 58-millisecond (ms) equivalent gantry rotation speed, which is four to six times faster than hardware-only gantry rotation speed alone. This translates to a 29-ms effective temporal resolution, which achieves for the first time a cardiac CT temporal sampling similar to the frame rate of a cath lab.
The Discovery CT750 HD FREEdom Edition also is the first cardiac spectral CT scanner that merges GE’s SnapShot Pulse technology with GSI’s fast kV switching, allowing for a registered spectral CT dataset. Spectral CT takes traditional CT beyond anatomy to create images of quantitative material density, which then can be synthesized into monochromatic energies.
Monochromatic images have key advantages in virtually beam hardening artifact-free images, and improving contrast-to-noise at a given dose. For the first time, coronary images with calcium suppression are possible for challenging patients with high calcium burden. Additionally, GSI Cardiac enables investigations into new areas of CT coronary plaque assessment and quantitative myocardial perfusion.
Other notable product releases last year included the Optima NM/CT 640, the Optima MR360 Advance, the Brivo MR355 Inspire and the FlightPlan for Liver.
The Optima NM/CT 640 integrates the latest general purpose camera with a newly developed four-slice CT designed for hybrid rather than standalone use. The CT is available in 2.5-millimeter and 5-millimeter slice thickness, and can be fully upgraded on location from a Discovery NM630 SPECT only system. The Optima MR360 Advance is a premium 1.5T system designed to enhance the patient’s magnetic resonance (MR) experience while improving productivity and clinical confidence, the company asserts. The system’s technology is engineered to balance refined workflow capabilities and a wide range of clinical applications. The Brivo MR355 is similar to the Optima MR360, featuring a 1.5T MR system with various clinical applications but also includes a new “caring design” to improve patient comfort.
Approved in late November, GE’s FlightPlan for Liver is designed to simplify complicated liver embolizations. Using a catheter tip, doctors need only select a hypervascular tumor on a 3-D image and let the software highlight the specific blood vessels traveling from the catheter to the lesion’s vicinity. The highlighted vessels can be used as a 3-D roadmap and superimposed on a live fluoroscopic image to help guide the catheter into the target artery.
FlightPlan for Liver has commercially been available in Europe, Latin America and Asia since 2011, and has been installed in more than 30 healthcare institutions in 10 countries.
One of the year’s most significant coups occurred shortly before Christmas with the licensing of its investigative Alzheimer’s imaging agent flutemetamol to Merck.
Injected into patients before PET (positron emission tomography) scans, flutemetamol detects beta-amyloid deposits in the brain, a major sign of Alzheimer’s destructive advance. Merck agreed to test the agent with certain clinical trial participants taking MK-8931, a hoped-for blockbuster Alzheimer’s treatment. The imaging agent already has shown promise as far as Phase III, detecting beta amyloid with a 75 percent to 100 percent sensitivity and 99 percent to 100 percent specificity.
The deal pairs the agent with Merck’s drug, which works by inhibiting an enzyme that aids in developing amyloid beta peptide, thereby cutting back amyloid.
After using flutemetamol to choose trial participants, Merck will evaluate the agent as a possible future companion diagnostic, Senior Vice President Darryle Schoepp said.
“There is a serious unmet need for a reliable method for measuring beta amyloid deposits to help physicians diagnose Alzheimer’s disease at its different stages and study its progression,” Schoepp said in a statement, adding that GE’s agent holds the promise of marking the often clandestine disease and guiding treatment.