GE Names Rice to New Post in International Expansion
Stock Chart for General Electric Co (GE)
General Electric Co. named Vice Chairman John Rice to oversee a new international business structure as Chief Executive Officer Jeffrey Immelt signals the importance of faster-growing overseas markets.
Rice, 53 and a vice chairman since 2005, will move to Hong Kong and assume the role Jan. 1, GE said in a statement today. He’ll run a dozen new business groups across regions including Asia and the Middle East.
The appointment of Rice, a 32-year GE veteran, will help Immelt accelerate a push to both bolster exports and focus more on regions that are building out transportation, energy and health-care infrastructure. Overseas sales rose to account for 54 percent of Fairfield, Connecticut-based GE’s total revenue last year from 45 percent in 2005 as the U.S. grappled with its worst recession since the 1930s.
“The timing of Rice’s appointment to lead GE’s global operations underscores GE’s redoubled efforts,” said Nick Heymann, an analyst with Sterne Agee & Leach Inc. who has a “neutral” rating on the shares. “If anybody can reignite GE Industrial’s growth prospects, it would be John.”
Rice has overseen the company’s largest industrial units and led partnership negotiations in the Middle East, China, Africa and Brazil. He’s been “a fixture in presidential palaces and customers’ offices” over decades, Heymann said.
GE fell 2 cents to $16.71 at 4:15 p.m. in New York Stock Exchange composite trading. The shares dropped 5 percent when GE reported third-quarter results on Oct. 15 because sales of some large equipment fell short of analysts’ estimates.
Nani Beccalli-Falco, who had led international expansion, will take a new post to bring all of GE’s businesses in Germany into one reporting structure, similar to steps Immelt took in India last year. Germany is home to Siemens AG, GE’s biggest rival in many industries, including energy and health care.
The approach will seek to develop products to sell in the country, as well as some for export. Germany and India are home to two of GE’s global research and development centers. Beccalli-Falco, 60, will move to Frankfurt and report to Rice. He will also oversee efforts in Europe, Japan and Korea.
“We are entering a period of great opportunity in global markets and, as a result, our teams must be more decentralized, faster and more local,” Immelt, 54, said in the statement.
GE has become one of the biggest U.S. exporters behind Boeing Co., selling more than $18 billion in goods and services from the U.S. for overseas customers in 2009, up from $7 billion in 2001, according to the statement.
The company expects about 60 percent of annual sales to come from outside the U.S. in the coming years, Immelt said in the statement.
“We are able to take this next step in our growth as a global company because of the strong foundation that Nani Beccalli built over the past nine years,” Immelt said in the statement. “Germany offers significant growth opportunities.”
Immelt has shifted resources to tap international growth since becoming CEO in 2001, adding resources including the research and development centers with plans for a new complex in Brazil, bringing the number of centers to five.
He’s cited Germany as a model the U.S. should emulate for exports and said that GE sees the region as a target for expansion.
Units that Rice has overseen as CEO of the GE Technology Infrastructure group since 2007 include the world’s biggest maker of jet engines, medical imaging equipment, and locomotives. That position won’t be filled and each CEO for health care, transportation and aviation will report directly to Immelt. The units will each report financial results separately.
Rice’s career includes chief executive positions at progressively larger divisions within GE, including transportation and energy, the world’s biggest provider of power-generation equipment. He ran the audit staff in the mid- 1990s. When Rice was named vice chairman five years ago, he was tasked with a group that included the now divested plastics and security units, as well as appliances.
He’ll lead a dozen new local groupings that include business development, commercial teams, finance and controllership. Regions include China, India, Southeast Asia, Latin and South America, Russia, Canada, Australia, the Middle East, Africa, Germany, Japan and Korea and Europe, GE said.
Immelt is among chief executives who met with President Barack Obama in India this month as the U.S. leader seeks to double exports in the next five years. He sits on Obama’s Economic Recovery Advisory Board.
GE is adding U.S. jobs in businesses from power generation, aviation and locomotives to health care and lighting. The company has announced more than 16,500 new jobs inside the U.S. in the past two years, most recently at its appliance unit last month.
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