59June 17, 2019The Great American Company
O
neSundayinMarch,GaryWiesner,whorunsGeneral
ElectricCo.’swind-turbine-bladefactoryinPensacola,
Fla.,receivedsomethinghe’dnevergottenbefore:a personal
emailfromtheCEO.H.LawrenceCulpJr.wantedtoknowif
it wouldbeOKif hecamefora visit.
WhenCulparrivedtwodayslater,alone,injeans,it marked
thefirsttimea GEchiefexecutiveofficerhadvisitedtheplant
sincethecompanyboughtit 18yearsago.Hespentabouttwo
hourswalkingthefloorandchattingwithtechnicians,stop-
pingonlybrieflyfora callwiththeboardofdirectors.
A longtimedevoteeofToyota-styleleanmanufacturing,
Culpwasinhiselement.Whileoverheadscreensflashedmea-
surementsoftheproductionpaceineight-hourincrements,
Culpwonderedaloudif themetricswerevisualenoughand
whethertheycouldbebrokendowninto20-minuteoreven
10-minuteslices,soworkerswouldknowsoonerwhenthey
mightbefallingbehindontheirgoals.Atthetour’send,he
urgedthemtofaceuptoproductionissuesasearlyinthepro-
cessaspossible—or,asheputit,“Let’smakeit red,makeit
ugly,let’sgofixthem,”Wiesnerrecalls.A half-hourafterleav-
ing,Culpsentanotheremailpromisingtoreturn.
ThewindturbinebusinessisamongtheleastofCulp’s
worries.GE’sbalancesheetislopsidedwithdebt,itsGE
Powerdivisionis sheddingmillionsofdollarsincashdaily,
thestockpriceis barelyindoubledigits,andtheSecurities
andExchangeCommissionisinvestigatingthecompany’s
accountingpractices.Nonetheless,Culp’sPensacolavisitis
a tellingexampleofhowthefirstoutsidertorunGEis trying
tofixit,metricbymetric.
SincetakingoverasCEOonOct.1, he’seschewedthecom-
pany’sBostonheadquartersforfrequenttravel,spending
day-and-a-halfsessionswithGEunitsaroundtheworldand
meetingwithCEOsatBoeing,DukeEnergy,andSafran,among
othercustomers.InMay,thenightbeforehisappointmentto
seeFedExCorp.CEOFredSmith,heflewtoMemphistowatch
a million-oddpackageshandledinthe“nightsort”atthecom-
pany’smainshippinghub.Culporderedalmost 50 GEbusiness
headstotakeoffJune10-14foranon-the-factory-floor,“true-
lean”manufacturingbootcampthathe’shelpingtoteach.
Noneofthiswouldsurprisepeoplewhoworkedwith
Culpinhis 14 years as CEO at Danaher Corp., the low-pro-
file industrial conglomerate. On his watch, Danaher grew
fivefold in revenue while Culp, in the mold of GE legend
Jack Welch, oversaw scores of acquisitions. And like Welch,
Culp isn’t the sort to buy a company and forget it. It wasn’t
unusual to see Culp moving equipment around in factories
or strolling trade shows seeking time with customers. Whilestudying an orthodontics company Danaher had bought,
Culp decided he could best understand its customers by test-
ing the product himself. “Probably he didn’t need braces,
but he got braces,” says Vicente Reynal, who ran that busi-
nessforCulp.
CulpretiredfromDanaherfouryearsagoattheageof51.
Thebehemothhe’schargedwithrescuingis,with$120bil-
lion in annual revenue, six times the size of that company,
with quadruple the number of employees. GE Power, which
produces electricity-generating equipment, is by itself larger
than Danaher. Whereas Culp expanded his former com-
pany with acquisitions, his first job at GE will be to shrink
it. At Danaher he could mostly ignore an outside world that
mostly ignored him—a luxury he no longer enjoys.
Culp is an “inspired choice,” but the skills he honed at
Danaher—buying companies and making them more effi-
cient—don’t prepare him for the mess at GE, concluded
research firm Paragon Intel in a recent report. JPMorgan
Chase & Co. analyst Stephen Tusa, who predicted GE’s col-
lapse before his peers, has argued that there still hasn’t been
a true accounting of the extent of the company’s problems.
Culp’s many acolytes aren’t fazed. Jim Lico, who worked
for him at Danaher and now runs Fortive Corp., a Danaher
spinoff, says that when he heard of his old boss’s new job, he
bought a “meaningful” chunk of GE stock. “And I think most
of the people that have worked for him did, too,” Lico says.
“When you look at how Danaher changed over the course
of his CEO tenure, there might not have been as many zeros
behind the numbers, but the work he did to build Danaher
was every bit as risky” as what he confronts at GE.
Culp himself doesn’t seem terribly worried, either. “Is
it more challenging? I can’t say that it is,” he said in a brief
phone interview in January, sounding supremely confident,
or deeply delusional, or possibly both. “I wish I had more
hours in the day, I wish we had started sooner, but I can’t
dealwithanyofthat.We’rejusttryingtomakeprogressa
littlebiteveryday.”
ThemagnitudeofGE’sfallprobablyhelpsCulpbygiving
hima longerleashwithinvestorsthanhispredecessors.
WallStreetwasalwaysskepticalof Welch’ssuccessor,
JeffreyImmelt, who overpaid for some early acquisitions
and later committed the cardinal sin of cutting the divi-
dend. Then John Flannery was too busy dousing fires during
his short reign to build rapport with shareholders. Culp
brought his gleaming Danaher résumé and zero GE bag-
gage. Although it’s not at all clear that he can return GE to
its past glory, he probably can’t make things much worse.