It was as direct a repudiation of his predecessor as anything Barack Obama could say about George W. Bush.
In the wake of last year’s market crash that financial arm drove the stock price to a low of $6.66 per share in early March. It’s now about double that.
Immelt never made a direct criticism of Welch. He never mentioned him. But he laid out the direction GE will take under his leadership, and it’s not about finance.
Instead it’s all about technology, all about research, all about science, and (most important) all about making things.
Technology is what makes people and countries feel wealthy.
Technology is also the source of competitive advantage.
Immelt is putting GE’s money where his mouth is. He said the company’s research budget has not been cut during the downturn, and that it made $17 billion last year in environmentally-friendly technology.
Immelt was announcing a new Manufacturing and Technology Software Center outside Detroit, costing $100 million, and which he said will launch with 1,200 employees “and grow from there.”
GE has been a company unique in American history. It is the only firm that has been part of the Dow Jones Industrial Average since its launch in the 19th century. It has made it from that day to this with a series of CEOs who were each given the power to create their own vision for the company.
The best template for Immelt’s new direction might be Owen Young, who led the company during the Great Depression and made it dominant in home appliances.
Immelt’s vision turns more toward health care, energy technologies, and high-end manufacturing, but the idea is the same as it was for Young. Make stuff people will buy.
Let 1,000 Immelts bloom.