By coincidence, I was reading Ted Mann and Larry Gryta’s excellent book Lights Out when news about GE broke this week. It’s a stunning reminder of how quickly business fortunes can change. At the turn of the century, GE was the most valuable company in the U.S., and Fortune had declared CEO Jack Welch the “Manager of the Century.” Today the company is being broken into pieces. Big pieces, to be sure—each of the three public companies should end up comfortably in the Fortune 200. But still, a shadow of what GE was.
I talked briefly with CEO Larry Culp yesterday. Culp came in as an outsider and has done much to reduce the company’s debt and boost its profitability. He had indicated earlier in his tenure that he had no desire to break the storied company up. But yesterday, he had no regrets:
“We are of the view that investors win, employees win, and customers win. These businesses will be more focused, have a greater level of accountability, sharper and better capital allocation, and more flexibility.”
Okay, that makes sense. But then, was there ever a good reason for wildly different businesses to be joined together in the first place? Or does the end of the world’s greatest conglomerate signal that something significant has changed in the business environment? Culp, who is as tightly disciplined in his messaging as he is in his managing, responded:
“I have spent very little time the last three years looking back over GE history. Since the fall of 2018, it has really been about today and tomorrow for me.”
He did acknowledge, though, one thing that had changed since Welch’s time—the aspirations of employees:
“Increasingly, recruitment and retention is about more than the corporate whole. It’s about position and purpose…There was a point in time when people said, ‘I want to work for GE.’ Today, people are more focused on addressing climate, or being in health care, or in aviation. I think going forward, what we do in recruiting and retention will be a function of what we are doing from a P&L situation.”
More news below. And read why Mary Barra believes GM can catch Tesla here.
Boeing has agreed to take responsibility for the 2019 crash in Ethiopia of one of its 737 Max planes, and to compensate most families of the 157 victims. Under the deal, the families agree not to seek punitive damages. New York Times
U.S. and China
The U.S. and China have agreed to work together on climate action. Details are scarce, but they're talking about stepping up their collaboration within this crucial decade. Apparently the two sides already have 30 meetings under their belts, regarding the issue. Fortune
Uber discriminates against disabled people by charging "wait time" fees for those who need extra time to get into a car, according to a federal suit. Uber claims it is surprised by the accusations, and the fees "were never intended for riders who are ready at their designated pickup location but need more time to get into the car." Fortune
The addition of 2.1 million new customers to Disney+ in the fiscal fourth quarter was smaller than what Wall Street was hoping for. It was generally a disappointing quarter for the entertainment giant, and the results knocked its shares by around 4%. Fortune
AROUND THE WATER COOLER
Elon Musk this week exercised 2.15 million of his stock options ahead of a window closing next year, then sold stock to "satisfy the reporting person’s tax withholding obligations related to the exercise of stock options." Overall, he sold a few percent of his holdings this week—not (yet) quite the 10% his Twitter followers advised him to sell, which he said he would honor. Fortune
A COVID-19 patient being treated with Gilead Sciences' antiviral remdesivir appears to have developed resistance to the drug, marking the first time such resistance has been spotted outside of laboratory settings. Fortune
Coinbase CEO Brian Armstrong reckons the exchange's cryptocurrency business could be outstripped by the market for non-fungible tokens. Coinbase is of course about to open an NFT marketplace, and says it has received over 2.5 million sign-up requests. Fortune
Around two-fifths of U.S. employers have expanded workers' access to mental health services during the COVID-19 pandemic, according to a Kaiser Family Foundation survey. Nearly half of large companies found more employees using such services since the pandemic began. Fortune
This edition of CEO Daily was edited by David Meyer.
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