Executive Briefings

GE's Immelt Bets Big on Digital Factories, But Shareholders Are Wary

At a General Electric Co factory in this rural town, Keith Spahn, 60, used to take measurements of parts from railroad locomotives that are in for repair by hand.

Now he uses a tool that reads the dimensions automatically and sends them wirelessly to his computer, where software decides whether the part can be reused or must be scrapped. "It's definitely faster," he says.

Spahn's workbench in this 240,000-square foot plant is one small example of a multibillion-dollar bet by GE Chief Executive Jeff Immelt: digital technology will transform GE's factories, generate new revenue and boost profits.

The $4bn GE has spent on developing digital products — ranging from tiny sensors in jet engines to augmented reality and software that can crunch large volumes of data — is on the scale of investments Google and Facebook Inc made to build their businesses, Bill Ruh, CEO of GE’s digital division, told Reuters.

Now that GE has shed non-essential operations, including most of its large financial unit, its fortunes will rise or fall depending on whether that investment delivers.

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Now he uses a tool that reads the dimensions automatically and sends them wirelessly to his computer, where software decides whether the part can be reused or must be scrapped. "It's definitely faster," he says.

Spahn's workbench in this 240,000-square foot plant is one small example of a multibillion-dollar bet by GE Chief Executive Jeff Immelt: digital technology will transform GE's factories, generate new revenue and boost profits.

The $4bn GE has spent on developing digital products — ranging from tiny sensors in jet engines to augmented reality and software that can crunch large volumes of data — is on the scale of investments Google and Facebook Inc made to build their businesses, Bill Ruh, CEO of GE’s digital division, told Reuters.

Now that GE has shed non-essential operations, including most of its large financial unit, its fortunes will rise or fall depending on whether that investment delivers.

Read Full Article