Remaking GE, with help from Canada

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Jeffrey Immelt, the CEO of General Electric Co., said Canada will play a part in his effort to transform the iconic 135-year-old industrial conglomerate into a dominant global player in intelligent machines and advanced manufacturing.

Mr. Immelt professes faith in what he calls the "industrial Internet," the merging of advanced machinery with networked sensors and software that allow large components to manage themselves. The grafting of data-driven systems and analytical methods – which drive online platforms such as Google and Facebook – into industrial machinery is meant to make components run more efficiently and cut down on maintenance.

The key to Mr. Immelt's success in remaking GE lies in building the right team, he said in an exclusive interview with The Globe and Mail after opening GE Aviation's new robotics research and development centre at the company's aircraft-engine component manufacturing plant in Bromont, Que., last week.

"When we started this mission, we had 9,000 software engineers in GE, but we didn't think we had the right 1,000 to lead this kind of change. So we went out and recruited people from the industry, from Cisco and from eBay and companies like that, startup companies. We recruit mathematicians and data analysts. It's very important for us to form the resource base, form the talent pool of the company."

As part of the transition, GE formed a joint venture last year with Accenture PLC, called Taleris, which offers airlines sophisticated commercial aircraft data analysis. Earlier this year, GE took a 10-per-cent stake, investing $105-million (U.S.), in Silicon Valley firm Pivotal, a developer of industrial Internet software.

Fairfield, Conn.-based GE is now looking to about 30 companies, mostly software developers, for potential partnerships, equity stakes or other forms of co-operation, including "five or six" located in Canada, Mr. Immelt said. "Canada is rich in software. There's a couple of Canadian companies that we looked at for equity investments or partnerships or things like that," he said.

Asked whether Mr. Immelt, 57, isn't too steeped in traditional manufacturing methods to make GE a dominant player in sophisticated data analytics, he replied: "The CEO of any company has to be a learner and I'm a very inquisitive guy."

As an example of the push toward networked machinery, GE's new-generation jet engines are equipped with 20 sensors that collect data in real time on various metrics. The information provided by these sensors allows for more proactive decisions regarding issues such as performance, maintenance, troubleshooting and fuel burn reduction.

Also part of GE's push is its burgeoning use of 3D printing technology. The aviation division is launching production of a cobalt-chromium fuel nozzle for jet engines that is "grown" in a MakerBot printer, replacing a traditional manufacturing process that requires 18 components. The new nozzle is also 25-per-cent lighter than its predecessor.

GE, with products and services as disparate as dishwashers, finance, health systems, hybrid locomotives and wind and gas turbines, has several operations in Canada, including a Peterborough, Ont., facility that produces large slow-speed motors and an innovation centre in Calgary working on advanced products and processes for the oil-and-gas sector.

The jet-engine facility at Bromont is at the forefront of what GE is doing in three key areas, says Mr. Immelt: robotics, innovative materials and new manufacturing methods.

"In many ways, Bromont is a place where all three come together and in that regard I'd say it's at the top of the heap when it comes to advanced manufacturing. It's an under-known fact that Canada has a fairly deep software pool and one that I think it's inevitable that we have a bigger software presence in the country."

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In his own words

On the role of robotics at the aviation facility in Bromont, Que.: "This notion of robotics, that they are going to pioneer, that could be very important for the company, that could bring even more jobs and that could be a big deal as well."

On Canada's role in the GE empire: "Canada has always been important for the company. We've always had the presence of all of our big businesses here in Canada."

On advanced manufacturing: "We view advanced manufacturing as one of the big productivity thrusts for the company going forward. Manufacturing has always been important, but today the new products that we're launching are ones where the product and the process intertwine, so manufacturing is even more important."

On the Industrial Internet: "Industrial Internet is really our belief that there would be an analytical layer that goes on top of really every industrial product that we make. We make MRI scanners, locomotives, jet engines and all of them now have sensors in them, all of them take real-time data. Our customers value the data because it gives them more up time or better fuel efficiency or better safety. We think the harnessing of this data that's coming off what we call smart machines is something that's really very relevant for our growth in the future."

On GE's need to attract the right people: "You have to be a good beacon for talent."

On strategy: "We have to put more into R&D, we've got to be selling in more countries, we've got to be launching things like Industrial Internet. We've got to be doing all those things."

On doing business all over the world: "We have to be smart about where we make things and how we treat the places that we invest in. And if you want to be a welcome long-term investor, you have to know how to make money in a country and for a country. When I'm in Canada, I have to recognize that the people in this country want to see us investing in the country, want to see us participate. And I think smart business people know how to do both."

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