Progress… 4 Years In

Team,

Today marks my fourth year of service as Chairman and CEO of GE. I recall vividly walking into the Boston office that Monday morning in 2018 honored to be in the role, optimistic that my prior experience as a public CEO of a portfolio of businesses would serve me well, while mindful that I had much to learn about GE in a short period of time.

Looking back over the last four years, I am immensely proud of what we have accomplished together, and I hope you are as well.?Our progress has truly been a team effort.?

Early on, we set two critical objectives: improving our financial position and strengthening our businesses.

We’ve reduced our debt load by nearly $90B – that’s no small feat. Often there were hard decisions to make, but those choices have given us the foundation to play more offense both organically (think R&D and sales and marketing) and inorganically (i.e., acquisitions and investments) to set up our businesses for future growth. All across the company, everyone had an important role to play here. Today, we have a much stronger balance sheet, and we are operating from a position of strength.

We are running our businesses better today, transforming GE into a simpler and leaner organization.?Developing a lean mindset takes many years, but we are gaining ground—removing the waste that holds us back to allow for real breakthroughs. I recently had a chance to check back in with my Kaizen Week team at our GE Aerospace facility in Lynn, Massachusetts, to see how the closed-loop machining process is performing. Since our kaizen, the team has executed many improvements, including changes to midframe operations, which are now delivering 100% first time yield compared to 59% prior. I see lean at work everywhere, not just the manufacturing floor, and I am encouraged by how we’re using lean to improve our business performance.

Our progress on these two objectives enabled us to make the exciting announcement we did last November.?We are forming three independent, investment-grade industry-leading public companies focused on important growth sectors in healthcare, energy, and aerospace. I believe this will best position each of our businesses for long-term growth. The response to this news has been quite positive and I’m really enjoying watching GE’s U.S. TV ads celebrating our new brands.

And we did all of this despite a global pandemic and inflationary pressures not seen since the 1980s.

I’ll update you on our third quarter performance when we release earnings on October 25.?Let’s work together to finish 2022 strongly.?Our customers are relying on us.

Looking forward, I expect the macroeconomic environment to become more challenging in 2023.?Yet, we’ll continue to work our plan.??We will continue to embrace reality all the while controlling what we can control. There is still much to do, but I’m confident in our future.

In particular, in 2023, we will:

• Spin GE HealthCare in the first week of Jan…launching a standalone public company leading precision health innovation. Pete and the team are ready!
• Embed lean more deeply in our operating routines… Jon Wood asked me recently in our GE Aerospace all-employee meeting about when I expect us to reach the tipping point where lean becomes instinctive and embedded across our organization.?My answer was 2023 at Aerospace, and the same must be true across GE.?We have countless examples now of effective utilization of these principles and tools across GE.?Each of us now needs to build on these experiences and apply them on a daily basis.?
• Continue to transform our culture with our leadership behaviors… acting with humility, leading with transparency, and delivering with focus.?The lean progress I mentioned earlier will serve as the catalyst here.

Business is a team sport. Over the past four years, our GE team has proven that to be true time and again. Thank you for your engagement, support, and commitment to GE.

Larry