GE 2009 Annual Report Download - page 10

Productivity and cost control will be important. Since 2008, we have invested about
$3 billion in restructuring. We have closed more than 400 facilities, while creating a
leaner and more agile company. We are on track to reduce working capital by $5 billion
in 2009 –10. We remain near the top of our industrial peers in margins and returns.
In the near future, we expect to earn a full return on investment in GE Capital, with
annual profit growing substantially in the next few years. Regardless of how
financial regulation evolves, there will be great demand for strong lenders that can help
companies grow.
Capital Finance earned $2.3 billion in 2009 and should strengthen during 2010. Earnings
could experience a significant “bounce back” in 2011. Our credit costs in 2009 –10 are
about three times those in the last few years. But it appears that nonearning assets have
peaked and losses will be declining substantially over the next year or two. At the same
time, margins on new business remain strong.
We should have more than $25 billion of cash at the GE parent
during 2010, including cash from internal generation and the impact
of announced divestitures. In addition, this cash will grow in line with
profits each year and could be even greater as we restore the
GE Capital dividend in the future.
We plan to allocate capital for acquisitions to build out our strong
infrastructure franchise and grow our dividend in line with earnings.
Over time, we may buy back stock. We will be disciplined, patient and
committed to improving long-term returns.
We worked hard during the crisis to prepare the Company for the
future. We are emerging as a “Renewed GE,” a company that is more
competitive and positioned for long-term growth.
Business Accountability
My job is to run GE. But we all have responsibilities to our country,
and there are times when CEOs need to speak up about practices that
are not in the best interests of the United States and our free market
economy, that great engine of prosperity. A recent Gallup poll showed
that only 13% of Americans trust big business, while more than
40% have no confidence in its integrity and competence.
When citizens distrust big business, governments will follow suit.
We can find ourselves in a sort of “dark cycle,” where the people
who can make our economy better are considered its worst enemies.
The rallying cry becomes, “Why can’t you clowns just create some jobs?” That is where
we are today, both in this country and in much of the developed world. I fear that if we
don’t improve the mood in our country, populism will turn to protectionism, to the great
detriment of us all.
Americans are angry. People around the world are angry. But anger is not a strategy.
The only strategy we can have as a country is to create more growth. And GE will continue
to be a tough-minded and optimistic growth company.
GE wants to help lead an American growth renewal. We are investing more in technology
than at any time in our history. We are rebuilding manufacturing capability. We are
selling our products in every corner of the world. We are one of the country’s biggest
exporters, with $18 billion in export-related revenue. We are financing small and
medium-sized companies and working with them to grow their businesses.
GE wants to help lead an American
growth renewal. We are investing
more in technology than at
any time in our history. We are
rebuilding manufacturing
capability. We are selling our
products in every corner of the
world. We are one of the
country’s biggest exporters, with
$18 billion in export-related
revenue. We are financing small
and medium-sized companies
and working with them to grow
their businesses.
8 GE 2009 ANNUAL REPORT