General Electric: The rebirth of healthcare

By José Roberto Arteaga, Forbes Mexico

The company that will be born from the planned separation of GE's segments will give greater agility to the healthcare business, to add new investments, and it expected that it will be able to return in greater amounts destined for its operation in Mexico

Elie Chaillot can't hide his enthusiasm for Mexico and Latin America. The president and CEO of GE医疗 Intercontinental observes the progress of the medical equipment business in the country. “There are more than 128 million people [the population who consume or will consume medical services]. I think you should be excited too”, says the French manager, as he challenges his interlocutor and finishes the comment with a laugh that extends through one of the boardrooms of the General Electric corporate in the Mexican capital.

“It is expected that 2022 will be a record year for us, at GE Healthcare Mexico: the best year”, says, emphatically, the French manager, who emphasizes what he said by placing a hand on the table, in front of the business managers in Latin America and Mexico, Rafael Palombini and Guillermo Murra, respectively.

GE Healthcare Intercontinental is a business unit representing nearly US$3 billion, with 10,000 employees and coverage for more than 6th countries in Latin America, Southeast Asia, India, South Asia, Japan, South Korea, Australia, and New Zealand. Today, 50% of the company's turnover in the country belongs to the private sector, and the same proportion comes from the public sphere, says the CEO of the operation in Mexico, although the challenge is to increase the percentage of the government.

Currently, 30,000 GE Healthcare machines operate in public and private medical facilities in Mexico. Latin America accounts for about 20% of GE Healthcare's current turnover and the company's plans have been incentivized by the demand for equipment in the region, which accounts for almost a quarter of the intercontinental business, with the potential to increase to more than double (and even triple) its current level, although the timing to reach the goal depends on many things, such as the end of the war between Russia and Ukraine, as well as the normalization of the supply chain in the world. Today, they can double it in less than five years.

However, the strategy is no stranger to global challenges. The lack of micro-components has affected everyone and Chaillot has lived it in his flesh since he has not been able to buy a car in recent months, the executive exemplifies, and laughs after his answer.

"We need different components to make up a product, or we start to see different source of?product, or we start to see different sources of supply; in some cases, it delays operations, but we always give priority to serving our products", he says.

Chaillot is asked if they have considered that there are additional investments to compensate for the lack of micro-components. His answer comes immediately: "Absolutely!"

GE has two manufacturing plants focused on components of medical equipment in the country, such as those intended for resonators and ultrasound. A total of 2,914 employees (Backoffice and factory) work at the healthcare firm in Mexico.

The French manager is not the only one excited about the opportunities GE has in the country and the region, the local team shares this enthusiasm.???????

"This year, we increased our production capacity in Juárez and opened two additional production lines, specializing in the care of incubators for newborns. And we will continue to invest", says Guillermo Murra, Country Manager of GE Healthcare Mexico.

Meanwhile, GE is completing the planned separation of its business units, to form independent companies in early 2023. A model that could benefit the investments made in the Mexican Republic.

"I have a mission: to bring health care to all these people, and I believe that all of us, whether it be the private sector, the government, or even health care providers, must do it and we must work together to increase the quantity and quality of life and health care", says the French executive.?

A HUMAN BUSINESS?

General Electric saw the light as a company in 1892. Its history goes back to the acquisition of emblematic firms, such as Edison Electric Light Company, founded by Thomas Alva Edison himself, creator of the first incandescent bulb.?

The development that the firm has experienced in more than 130 years has allowed it to venture into business areas such as aviation, energy, and renewable energies or health care.

Elie Chaillot has worked at General Electric for over 22 years. His professional career has allowed him to work in Europe and Africa, as well as working with teams in Asia (especially in Japan and India), as well as in Latin America and Australia. "I'm a social person. I love people and, wherever we go, we should be in touch with everyone. I like that my family is always learning and, also, with my business colleagues I love to teach them and that we are better every day", he says.

For GE, Healthcare's Business Division accounted for revenues of US$17.725 million in 2021, while the previous year was US$18.009 million, and US$19.942 million in?2019, according to its latest annual report, which shows that the business segment has been reduced in recent years.

But the French executive believes that the region of Mexico can offer not only manufacturing but demand for more medical equipment.

"Mexico is very important to us, and it is for two reasons: this is the second largest country in Latin America and health care is aimed at all people. It is a growing market and is a high priority for the government. And although governments come and go, health is a priority, and this should not change", says Chaillot.

The other reason that clearly explains the importance that the country has within the plans of this company is that it is one of the destinations where its products are manufactured.

Ciudad Juárez, Chihuahua, is home to one of GE Healthcare's production centers, as well as another factory in Monterrey, Nuevo León. "These factories are not only for Latin America and Mexico but to meet global demand", explains the French executive, who is convinced that national talent is another of the country's great attractions.

"Of course, we can't do anything without people. I am very excited to see the level of talent we have in this country and the operations that are being conducted", says the executive.

GE Healthcare teams allow physicians to enter the human body without surgery. In addition, the tools provide data that nourishes the work of health workers. "I think what we need to do is analyze what possibilities this data opens up because there are too many of them. If we don't [take advantage of them], it would be a waste."

The career of the medical teams of the future lies in the generation and use of data for doctors to make better decisions for the benefit of patients,?with better diagnoses and treatments.

One of the goals is to reduce the costs of medical services for the government, for example. "The government is investing in health care and [most importantly] that investment is used for the benefit of patients so that it is profitable." GE will separate its businesses into three global companies, focused on the growth sectors of health care, energy, and aviation. GE Healthcare was the designated name for the American firm's medical equipment business.

"Upon completion of the planned demerger, GE Healthcare shares will be traded on Nasdaq Global Select Market with the 'GEHC' symbol. When listed on Nasdaq, GE Healthcare will benefit from the profile and trajectory of the stock market as a market for innovative and technological public companies, particularly in the health sector", the company said in a statement issued last July.

Five years ago, Chaillot heard for the first time that GE Healthcare would stop being just a business segment, to become an independent company, and hopes this will be the best decision the company has made in the last decade.

"We love to focus on health care. We do not share the same customers [of GE] in the energy, aviation, or in any of the other fields in which we venture, since, from the perspective of the customer, there is not much in common", says the manager.

On the other hand, investors and institutions want to invest in industries such as energy or aviation but may not want to invest in health care. The manager hopes that many investors are interested in the health field and want to acquire shares in the new company.

"This focuses on giving us much more freedom so that we can invest in greater health care solutions. For example, if we want more investment in health care, we can move faster to make this decision; or if we want to add different technologies to the portfolio, our portfolio, then we would be more prepared and more agile to do so", he says.

And "Mexico is a market where speed is important", explains Chaillot.

Twenty-three years ago, when joining the company, the French executive recalled that one of the areas that worked with greater emphasis was that of telemedicine and, today, this segment has grown exponentially from the Covid-19 pandemic.

This is how one of the most complex events concerning health, the pandemic, embraced new technologies and opened the way to other spaces of innovation that tomorrow will be used by the market.

"That helps us to accelerate our investments in telemedicine, the digital environment, and all integrated health", says the manager, who knows that this is the key to reducing costs and democratizing their solutions.

Elie Chaillot recalls that one of his first experiences at GE was serving a dissatisfied customer, and he cannot forget that the company does respond to the end consumer of its products, an aspect that excites him on his visit to Mexico. "I have always believed that the client is the most important thing [...] I make all my decisions with the patient in mind. It's one of the reasons why I came to this company and why I like this job. I feel passionate because the patient can be you... or me."

This is the English translation of the article which was first published by Forbes Mexico in October 2022.