GE has been in the news quite a bit recently.
From the Motley Fool:
“Sending shares to their highest level since September 2008, investors were clearly quite happy with General Electric’s (NYSE: GE ) third quarter earnings. Perhaps it was the growth of backlogs to a record $229 billion, or perhaps it was the 11% growth in profits for its industrial divisions.”
However, a few other news items mentioned GE, including …
From the Albany Times Union:
From the Anderson, SC Independent Mail:
“General Electric Corporate said layoffs are coming to the Greenville facility. In a statement by GE, the company said it’s looking at ways to reduce the cost across the global Power & Water Business in order to “retain our competitiveness in a tough marketplace“.
From the Indiana Public Media:
“Dozens of GE workers protested layoffs of 160 employees outside the company’s Bloomington plant Thursday morning. GE announced earlier this month it was laying off the employees because of a 30 percent decline in side-by-side refrigerator sales since 2010.”
From YNN in Albany, NY:
“Lawmakers, union employees and community members gathered at the GE plant in Fort Edward for a rally. The plant, which is one of the largest employers in Washington County, is considering moving operations from Fort Edward, to Clearwater, Florida. If it closes down, which union employees say is all but certain, more than 150 people will lose their jobs.”
Massive backlogs, profit growing like crazy … and headcount shopping. I’m sure Jack is proud of his protégé.
It would be easy to point out the sheer hypocrisy of Jeff Immelt chairing Obama’s jobs council in light of the fact that his management skill is limited to mergers & acquisitions, whacking headcount and chasing cheap labor. His actual knowledge of manufacturing management doesn’t rise to that of a mediocre production supervisor.
It would be easy to hoot at the absurdity of GE proclaiming its lean prowess at their appliance plant in Louisville – while laying off folks 75 miles away at their refrigerator plant in Bloomington.
But the ridiculous failure of management at GE is self-evident. They only know one thing – maximize their share price NOW – no matter how much seed corn has to be eaten to do it. Toyota’s fundamental respect for people is completely lacking in the hearts and minds of GE executives. And one can’t blame it on Wall Street pressure – ‘the devil made me do it’ doesn’t fly. The devils on Wall Street don’t make Immelt and his staff do anything. They are their own men (and women) and they are fully responsible for their own actions.
They claim to be driven to maximize shareholder value – guess what? So is everyone else. Immelt and gang choose to maximize it immediately, future shareholders be damned. Wise management choses to do it in the long haul, and maximize value for their employees and everyone else involved along the way. What Immelt et al are really doing is maximizing their personal wealth NOW and they can’t say anyone else is responsible for their decisions to do that.
The stories of GE reverting to Jack Welch, pre-recession, pre-Obama form are not a surprise to anyone who knows much of anything about them. It is in their corporate culture and their DNA. They are staffed at the top exclusively by folks who live and breathe the principle that people are little more than numbers on spreadsheets to be manipulated for short term financial gain. They are steeped in the belief that management creates value and people are disposable tools for them to use as they see fit along the way.
It is such a huge difference from the Toyota Way. I chaired a panel discussion including a couple of Toyota executives last week and their view of the role of senior management could not possibly be farther from the GE view. They are steeped in a servant view of management that is both admirable and completely foreign to Jeff Immelt.