EXCLUSIVE: Interview With Jeff Immelt, GE Global CEO

In the 11 years since Immelt has taken over the company’s leadership, he has wisely capitalised on that rising demand, and has driven GE to predominantly focus on its core sectors, including oil and gas and energy production.

“I tend to pick big themes; if you really do believe in a billion people joining the middle class in the next decade and two to three billion in the next 20 years, that means more cars and more houses which means more consumption of fuels – just like night follows day.

“So we picked around 10 years ago that extraction technologies and mining and oil and gas would be great technologies to be in. And so far it’s proven to be great.

“Our customers have big solutions. People like Saudi Aramco have big demands on technology and that’s the kind of work that GE does. So this has been a nice field for us,” he says.

Going forward, Immelt is bullish that GE’s industrial businesses will continue delivering results in the medium-term.

“Even though we have dramatically multiplied our business, I would be really disappointed if our business doesn’t double again in three or four or five years. We are very strong on this.

“We have shrunk financial services and I think we have come to a good place right now,” he adds.

The company’s move to reduce the size of GE Capital, its financial services unit, is already paying off; its third-quarter net income increased 8.3 per cent year-on-year to $3.49 billion from $3.22 billion.

Revenue during the period rose 2.8 per cent to $36.35 billion from $35.36 billion.

Earlier this year, Immelt announced that GE was on track to post organic growth of at least 10 per cent in 2012, while reducing expenses by around $2 billion through 2014 – starting with between $700 million and $1 billion next year.

The cost-cutting programme will involve running the company more efficiently, he explains to Gulf Business.

“Not that I ever take for granted the value that jobs have. It’s never easy to cut jobs even though sometimes we have to. But I do think we owe it to all our people to run the place well and to run the place professionally and to run it in a non-bureaucratic way.”

The company will be restructuring its European business, and will focus cost-cutting measures in the developed countries.

“I think there are places in the world that aren’t growing and we need to run those more productively, and I think there are places in the world that are growing and we need to re-invest in those. That’s my job inside the company to help make those calls.”

Taking a risk is scary, admits the bold CEO, but not taking one is worse.

“I think companies run into trouble when they say we are going to cut everybody’s budget by 15 per cent – that’s bad leadership,” he says.

“Sometimes, inside the company, people may question my decisions but they never question my intentions. They always know that I do what I think is best for the company, they know the company is always moving forward, not backwards, and I think in the end that’s all that you can do. The world’s volatile and you make mistakes along the way.

“Our back-up is that we have $100 billion cash on our balance sheet – that’s a pretty good back-up, a nice strength to have,” he adds, chuckling.

An optimist and visionary, Immelt is convinced that although uncertainties do persist in the global economy, it is moving in the right direction.

“I tend to have a broader perspective and in general, I think things are moving better. If you could have said to people in September 2008, during the peak of the financial crisis, that we would be where we are today in 2012, everybody would have said ‘sign me up – that sounds great’.

“I think it’s always easy to fall in the trap of studying today’s headlines. I’d say study the big picture: that there will be slow growth in Europe for a while, the US economy is getting better but we need to have some answer on the deficit fiscal cliff – so that’s a big hangover right now.

“China is going through political transition so there’s always uncertainty created by events like that, and then there’s the Arab Spring, so there’s a lot going on in the world.

“But I still believe that even with the volatility, the power of the emerging markets like China, the Middle East, Brazil, Asean countries, will continue to go forward,” he adds.