IndustryWeek spoke with John Rice, a General Electric Co. vice chairman who serves as president and CEO of the company's Technology Infrastructure segment. IW interviewed Rice for a profile on GE that will appear in the upcoming July issue, which also will feature IW's annual list of the U.S. 500 largest publicly traded manufacturers. GE ranks No. 3 on this year's list based on revenue of $156.8 billion. Rice spoke about the company's renewed focus on manufacturing and its future growth plans.
IW: Jeff Immelt mentioned GE's financial services business became too big and GE must become an industrial company first. What does that mean to you?
JR: When he says that, it's measured by earnings, and financial services became about half of our earnings up through 2007 or so, and we are first and foremost an industrial or an infrastructure company. That's kind of our heritage and it's not that financial services won't play an important role in our company. We do important things around middle-market lending; we think we're very good at it, but we're going to make sure we continue to fund the right infrastructure investments in the future. We're quite proud of the fact that in the toughest recession we've seen, we continue to grow our investment in R&D and did that in 2009. I think R&D was up 7%, and it will be up double digits this year. So we will continue focus and accelerate our investments in R&D doing the kind of things that we've been doing for a number of years in our energy business, our aviation business and our transportation business.
IW: What are some of the key investment areas in the Technology Infrastructure segment?
JR: I think the interesting part about what we do is these are long-cycle businesses where investments typically take many years to mature so for example the Evo locomotive (Evolution Series), which is the most efficient and environmentally friendly locomotive technology out there. It's a 10-year journey, so we've been investing in that for the better part of the decade. In the aviation business we're launching the GEnx engine that goes with the Boeing 787 Dreamliner and that's also a journey that takes about a decade, so in this world where companies sometimes get criticized for being too short-term focused most of what we do on the industrial side of our businesses requires multiyear thinking, multiyear investing and a real focus on the long term.
IW: What would you consider to be the fastest-growing business within your sector?
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