General Electric, the largest US industrial company, is going through a transformation. It has a new CEO at the helm, has relocated headquarters to Boston, and most important, is trying to position itself as a manufacturing leader in the digital era.
“If we go back in time, say in 2011 to 2012, when as a business, we were facing challenges, Jeff (Immelt, former CEO) realized that unless we leverage software and analytics, true productivity would not be gained,” said Mark Bernardo, GE’s VP of Professional Services, at the company’s temporary new headquarters in Boston on August 30.
Since then, GE has made several strategic business moves to leverage its core competencies: spun off its financial services unit, GE Capital; acquired French company Alstom's power and grid business; launched GE Digital to bring various software groups such as engineering, product development, and IT under one umbrella, and opened its cloud-based software platform for the Industrial Internet, Predix, to outside developers.
Further changes could be on the horizon, as the company is said to be looking at cost cuts to the tune of $2 billion by the end of 2018.
New CEO John Flannery told senior-level executives to expect job cuts at its Boston headquarters, according to a Thursday report from Reuters, which cited a source with direct knowledge of those discussions.
Currently, GE has roughly 250 employees at a rental space in the city’s Fort Point area and plans to eventually bring 800 workers once it constructs the new headquarters. Earlier in August, citing cost concerns, GE said it would break up the construction into two phases, pushing back the completion to 2021 from mid-2019.
These cost cuts notwithstanding, “there is no change in long-term strategy as it relates to digital,” said Jeff Erhardt, GE’s VP of Intelligent Systems.
Erhardt said that machine learning, artificial intelligence along with domain expertise will help boost GE’s digital future. And Predix, its own IOT platform, will play a central role in managing complex data. The platform currently has 100 apps – from MRI machines to turbines to jet engines – created by developers, including many from outside, who mine complex industrial data to make the machines perform more safely and efficiently.
“We spend time understanding how man and machine works, how we can automate and augment decisions,” Erhardt said. “We are going to big tech companies, cherry-picking their top people and they recognize that we are probably 20 years behind what’s going in Google or Facebook, and digitization is the coming next biggest thing (in the industry).”