GE to cut 12,000 power jobs worldwide; CEO in PH stresses need to cope with 4th industrial revolution

December 21, 2017 - 11:36 PM
GE steam turbine
Gigantic steam turbine made by GE for the power generation industry.

General Electric Co. has announced that it is cutting 12,000 jobs in its power business worldwide, Reuters reported on Thursday, citing continued dwindling demand for fossil fuel power plants as the reason behind the layoffs.

The layoffs will primarily be outside the United States, Reuters reported.

In Makati City on the same day, GE Philippines chief executive officer Jocot De Dios stressed the need for companies to cope with the so-called 4th Industrial Revolution, where the rapid development of digital technology is changing the way we work.

Sales of new power plants are falling, GE added, noting that industry outlook of sales are at 110 to 120 new gas-powered turbines a year, even though the capacity at GE and other major suppliers is about four times of that.

At the forum “Are We 4IR-Proof? Philippine Competitiveness in the 4th Industrial Revolution” hosted by the Asian Institute of Management (AIM) Rizalino S. Navarro Policy Center of Competitiveness and Konrad Adenauer Stiftung, De Dios discussed GE’s digital transformation, which, he admitted, has “not been easy”.

“Like any other old, archaic company, we’re faced with challenges,” he said. Under then GE CEO Jeff Immelt in 2010, the industrial company known for building power turbines, generators, health imaging equipment, and jet engines used by 60 to 70 percent of all airplanes worldwide, among others, began turning the vast amounts of data it collects from its customers into something usable.

They were inspired by the “Uberization” of the transport sector, with the mobile application enabling thousands worldwide to hail cars even though Uber, the company, owns none. There is also the model of Airbnb, which owns no real estate, but has become a platform by which travelers can access room and board.

With a team of software programmers and data scientists, GE developed its own industrial platform, called Predix, to develop apps and manage data for their customers’ benefit.

They have successfully worked with U.S. power provider Exelon, for example.

“The aim is, through our software development and our digital transformation, to enable a company like Exelon to do predictive maintenance of their power plant leveraging sensor technology, such that, if there’s an anomaly in your turbine, there’s a little sensor that’ll tell you, and in the boardroom, theoretically, you should see in your iPad that turbine Number One needs an update because there’s a little anomaly in the turbine blade. And it’ll tell you, because of data that we’ve generated from similar turbines all around the world, that, perhaps you don’t need to do this until maybe three months, four months down the road. So, at the next planned downtime that you have, you can replace the turbine blade,” De Dios explained.

Meanwhile, GE also helps oil and gas company BP understand how their wells perform through data analytics.

In aviation, said De Dios, GE is also doing data harvesting and analytics to enable pilots to take off and land as efficiently as possible. Theoretically, he said, after takeoff, a pilot can check his or her tablet and see what he or she did right and what he or she can improve on.

GE is also investing heavily in so-called additive manufacturing. It recently entered into a joint venture with the aviation company Cessna to use 3D manufacturing on its turboprop engines. The company is now looking into how 3D manufacturing can be incorporated into its healthcare, oil and gas, and other verticals.

De Dios noted that artificial intelligence is part of the picture, too. He cited McKinsey & Company as saying even 25 percent of the work of a CEO, in due course, can be done by technology.

“Or, 45 percent of actual work components now across the wage earners can be satisfied by technology,” he added. “It will not be far-fetched to think that the first AI machine could be a member of the board of directors in a corporate company in the next few years. So you just have to open your eyes to appreciate that.”

In the Philippines, people are “great at the social media thing,” but a lot still has to be done in terms of digital transformation. Data scientists are rare, and courses that will help graduates become data scientists are not taught enough in universities.

“We don’t have that educational infrastructure. Not to even mention the broadband or Internet infrastructure,” he said. “We need both the physical and the people infrastructure.”

He continued: “For a 125-year-old company, it takes some doing, but I think we’re on the right path. Obviously within the countries that we operate in, particularly Southeast Asia, the infrastructure environment has to move in step. Otherwise, we’ll really just be left behind with what’s happening.”