GE 2012 Annual Report Download - page 15

AVIATION 1% Fuel Savings $30B
POWER 1% Fuel Savings $66B
RAIL 1% Reduction in
System Inefficiency $27B
HEALTHCARE 1% Reduction in
System Inefficiency $63B
OIL & GAS 1% Reduction in
Capital Expenditures $90B
15-YEAR SAVINGS
INDUSTRIAL INTERNET = CUSTOMER OUTCOMES
THE POWER OF 1%
Through efficiencies enabled by the Industrial Internet,
a 1% change can deliver tremendous value to customers.
advanced manufacturing process to
build the battery efficiently. In essence,
we created a start-up within the
Company, and we expect the business
will generate more than $1 billion in
revenue annually in just a few years.
Our growth-market revenue
expanded by 11% to $37 billion. We
have a segmented global strategy.
We aspire to grow in China. We will
lead the industrialization of resource-
rich regions. And we will retain our
operating presence in Europe as
it restructures.
GE has a strong franchise in China that
grew by 19% in 2012. Our advantage
is in localization and partnerships. Last
year, we opened two customer inno-
vation centers, in Chengdu and Xi’an.
At the same time, we are partnering
with Chinese state-owned enterprises,
achieving global scale. In 2012, we
announced a joint venture with XD,
a Chinese leader in transmission and
distribution equipment, and digital
energy. This allows us to capture global
growth, in an industry where we have
low share, with a Chinese cost base.
Our other fast-growth global oppor-
tunity is in resource-rich countries,
where we have built a competitive
advantage. From Latin America to
the Middle East to Africa to Russia to
Australia to Canada, their goals are
the same: converting resource wealth
into industrial expertise and jobs. In
these regions, we remain committed
to a “Company-Country” approach.
Last year we announced a $1 billion
investment in Saudi Arabia across four
GE platforms.
The payback from global investments
is huge. Our recent acquisition in
Power Conversion received $600 mil-
lion of orders in Brazil alone by
leveraging GE’s presence and rela-
tionships in the country. Similarly,
GE Transportation is building a
$1 billion business in Russia and
Kazakhstan, based on local capabili-
ties. Excellence in localization is a
GE competitive advantage.
GE has a productive manufacturing
and engineering base in Europe. We
recently entered into an agreement
to acquire Avio, an Italian high-tech
aviation supplier that would add to this
base. While Europe may remain slug-
gish for a while, we have an important
installed base and smart and dedi-
cated teams helping our customers.
We will continue to be a good partner
for Europe, sustaining a robust manu-
facturing and engineering base.
Services growth was 4%, fueled
by a growing installed base and
expanding content. The Industrial
Internet is revolutionizing the services
we provide our customers, helping
them to become more productive
operations. GE will leverage our vast
service backlog to develop technolo-
gies that enhance the performance
of our products—and the enterprises
in which they operate—while growing
our dollars per installed base. The
Industrial Internet is built on intelligent
machines, advanced analytics and
people at work that can save airlines,
railroads, hospitals and utilities billions
of dollars each year.
The impact of these solutions is
being felt by customers across vari-
ous industries. Norfolk Southern is a
large North American Class I railroad
and our launch customer for GE Rail
Network Optimization. This solution
uses data and analytics to improve
operating decisions across the entire
GE 2012 ANNUAL REPORT 13