Ge Larry Culp 61782535271b0

Supply Chain Snarls ‘Akin to Playing Whac-a-Mole,’ Says GE CEO

Oct. 26, 2021
Larry Culp tells analysts and investors this environment is the most challenging he has seen in his career.

Let’s just say Larry Culp has a mild difference of opinion with some of his big-company peers.

The CEO of General Electric on Oct. 26 said he wouldn’t go on the record, as a few other leaders have said of late, as saying that the kinks in the global supply chain peaked in August or September. Asked about his view of the market on the heels of GE’s third-quarter earnings report, Culp said dealing with today’s challenges “really is akin to playing Whac-A-Mole.”

“I’ve talked to some of those CEOs. Some of those CEOs are friends of mine,” Culp said. “I’m not sure we’re yet in a place where we would say that things are stable.”

The issue, Culp added, isn’t that certain specific elements of the supply chain are particularly hung up. It’s more that new headaches and question marks surface as others recede, making the current environment the most challenging he has seen in his career.

“We may have lines of sight, we may have improvements in one commodity or one line of business,” he said. “But almost without fail, the next day, a commodity, a supplier, a logistics provider that we thought was good for the next six weeks or the next six months offers up a revision to that outlook […] It just seems like every day, there’s new news to balance.”

On their conference call with analysts and investors, both Culp and CFO Carolina Dybeck Happe lauded the teams across GE’s business units for how they’re handling the various crunches. GE, they said, is improving its efficiency and pushing through some price increases to offset the rising costs of doing business.

“It really is a tactical, muscular endeavor right now that we’re working our way through,” Culp said. “We’ll work our way through it. Things will level out over time. While it’s more challenging in the short term, we’ll be better for it in the medium or long term.”

On his team’s call, Culp also suggested GE will become more active on the mergers-and-acquisitions front as it completes the combination of its capital aviation services business with AerCap Holdings N.V. as well as the $1.45 billion purchase of BK Medical. The latter deal, Culp said, is “admittedly small but strategic” and will build up GE’s ultrasound business.

“That’s what we should be doing more of “ to go with organic growth and efficiency initiatives, Culp said.

Popular Sponsored Recommendations

Five Ways Aerospace and Defense MRO Can Prepare for the New Normal!

Dec. 6, 2023
The right tools can help A&D suppliers track the essentials & ultimately, boost their margins. Advanced analytics can also help determine the profitability of contracts, drive...

The Realist Guide to Sustainable Supply Chains

Sept. 28, 2023
A ‘roll up your sleeves’ guide to driving green line performance at your organization. Learn with this easy-to-understand ebook how to implement green supply chain management ...

Beat the odds. Optimize product costs. Mitigate supply chain issues.

Sept. 12, 2023
Leverage fact-based supplier negotiations. Enhance design. Get to market faster. Our comprehensive Should Cost Analysis guide shows you how.

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!