GE 2008 Annual Report Download - page 10

GE has enormous and enduring strengths that are underestimated right now. We
have leadership businesses and a dedicated team. We have outperformed the S&P 500
in earnings over the long term, including 2008.
One important reset is in financial services. Earlier this decade, our financial services
earnings received a valuation similar to our industrial earnings; today, it is lower. In the
end, having financial services as 50% of our earnings was too high. We intend to reset
this business to be smaller, less volatile and more connected to the “GE core.”
In addition, we determined that this was a good time to rethink how we communicate
about the Company and to provide only an annual framework on our operations,
instead of detailed quarterly guidance. We’ve always tried to be transparent, to offer
a lot of detail and data, and describe the Company externally the way we run the
Company internally, and we will continue to do so. As a long-cycle business, we want
our investors to focus on long-term results.
For 2009, we have sharpened our strategic processes and scenario planning. We have
increased the frequency and changed the agendas of our operating meetings. Each of
our businesses has set up a process to identify the “naysayers” in each of our industries
to make sure their voices are heard inside GE. From top to bottom and across GE, we
must and will listen more critically and respectfully to each other.
I have also learned something about my country. I run a global company, but
I am a citizen of the U.S. I believe that a popular, thirty-year notion that the U.S. can
evolve from being a technology and manufacturing leader to a service leader is just
wrong. In the end, this philosophy transformed the financial services industry from one
that supported commerce to a complex trading market that operated outside the
economy. Real engineering was traded for financial engineering. In the end, our businesses,
our government, and many local leaders lost sight of what makes a nation great:
a passion for innovation.
To this end, we need an educational system that inspires hard work, discipline, and
creative thinking. The ability to innovate must be valued again. We must discover new
technologies and develop a productive manufacturing base. Our trade deficit is a sign
of real weakness and we must reduce our debt to the world. GE will always invest to
win globally, but this should include a preeminent position in a strong U.S.
GE plans to play an important role in this process. We are, first and foremost, a
technology company. And we will continue to invest increasing amounts in R&D to
develop innovative solutions for our customers. In addition, we will continue investing to
improve the education system, around the world, to produce more competitive students.
People come to GE because they understand there is more to life than making a buck.
People come here because they want to make a difference, and never has this been
more important than it is right now.
The current crisis offers the challenge of our lifetime. I’ve told our leaders at GE that
if they are frightened by this concept, they shouldn’t be here. But if they’re energized,
and desire to play a part in transforming the Company for the future, then this is going
to be a thrilling time to be a part of GE.
GE will be a better company winning through this crisis. Your GE teams have dug
in and are dedicated to the tasks ahead. My thanks go out to all investors who
continue to support our efforts. If you are a prospective investor, let me say, now
is the time to invest in GE!
Jeffrey R. Immelt
Chairman of the Board
and Chief Executive Officer
February 6, 2009
8 ge 2008 annual report