1 00:00:00,280 --> 00:00:03,080 Speaker 1: Just over two years ago. Now, GE announced plans to 2 00:00:03,120 --> 00:00:07,200 Speaker 1: divide its business into three publicly traded companies focused on healthcare, 3 00:00:07,520 --> 00:00:11,239 Speaker 1: energy and aviation. GE Healthcare was spun off just over 4 00:00:11,280 --> 00:00:14,240 Speaker 1: a year ago, and early next month the last piece 5 00:00:14,280 --> 00:00:17,600 Speaker 1: will fall into place when GE separates into GE Aerospace 6 00:00:17,840 --> 00:00:21,759 Speaker 1: and ge Vernova, encompassing its energy business. We sat with 7 00:00:21,800 --> 00:00:24,800 Speaker 1: the GE CEO who has overseen the restructuring from the start, 8 00:00:24,880 --> 00:00:27,440 Speaker 1: Larry Kulp, and the man who will be CEO of 9 00:00:27,480 --> 00:00:29,200 Speaker 1: g Vernova, Scott Straisik. 10 00:00:29,560 --> 00:00:33,840 Speaker 2: If you go back five years, we really were, I think, 11 00:00:34,000 --> 00:00:38,600 Speaker 2: tasked with two simple objectives. One was a significantly leveraging 12 00:00:38,720 --> 00:00:43,479 Speaker 2: of our balance sheet. Secondly, we needed to execute an 13 00:00:43,520 --> 00:00:48,160 Speaker 2: operational turnaround across the business, but it was particularly acute 14 00:00:48,440 --> 00:00:51,080 Speaker 2: in our power segment, particularly the gas power business that 15 00:00:51,680 --> 00:00:55,920 Speaker 2: Scott ran at the time. So you fast forward. We 16 00:00:55,960 --> 00:01:00,320 Speaker 2: reduced our debtload by over one hundred billion dollars. Team 17 00:01:00,440 --> 00:01:05,119 Speaker 2: really executed I think a phenomenal turn in gas power 18 00:01:05,240 --> 00:01:07,880 Speaker 2: and then with the rest of our power segment. And 19 00:01:07,920 --> 00:01:11,080 Speaker 2: we were sitting there as the pandemic was beginning to lift. 20 00:01:11,080 --> 00:01:13,840 Speaker 2: We could see the merger of our aircraft leasing business 21 00:01:14,440 --> 00:01:18,440 Speaker 2: with one of our key competitors, air Cap coming to 22 00:01:19,240 --> 00:01:22,839 Speaker 2: a quick close, and we really had to decide what's 23 00:01:22,880 --> 00:01:26,240 Speaker 2: the go forward structure for GE, And given we had 24 00:01:26,280 --> 00:01:29,720 Speaker 2: had so much success with the decentralization, given that the 25 00:01:29,760 --> 00:01:33,040 Speaker 2: capital markets clearly liked the businesses but didn't like them together, 26 00:01:33,520 --> 00:01:37,120 Speaker 2: it was actually an easy decision when we took a 27 00:01:37,120 --> 00:01:40,080 Speaker 2: little over two years ago to say, it'll take us 28 00:01:40,120 --> 00:01:42,200 Speaker 2: a couple of years to pull this off, but when 29 00:01:42,240 --> 00:01:46,720 Speaker 2: the dust settles, GE Healthcare, chiev Vanova, and GE Aerospace 30 00:01:46,840 --> 00:01:48,480 Speaker 2: will all be on their own bottoms. 31 00:01:48,600 --> 00:01:50,720 Speaker 1: You may have just answered that in your answer, which 32 00:01:50,720 --> 00:01:53,120 Speaker 1: is why'd you pick Scott? Not to speak in your 33 00:01:53,920 --> 00:01:56,000 Speaker 1: presence Scott, but how'd you pick Scott? Is it because 34 00:01:56,000 --> 00:01:57,520 Speaker 1: of the roly had turned around? 35 00:01:58,080 --> 00:02:02,160 Speaker 2: Most definitely? I met Ski back August of eighteen. I 36 00:02:02,240 --> 00:02:05,160 Speaker 2: wasn't even in this chair yet. It was the first 37 00:02:05,200 --> 00:02:08,639 Speaker 2: GE business that I had visited down in Atlanta, and 38 00:02:09,800 --> 00:02:12,799 Speaker 2: I came away thinking, this is a really strong team, 39 00:02:13,480 --> 00:02:15,680 Speaker 2: but there's some things that we're doing that probably are 40 00:02:15,680 --> 00:02:19,840 Speaker 2: working against us. So we began the pivot to focus 41 00:02:19,880 --> 00:02:22,960 Speaker 2: more on the businesses as opposed to the segment. Scott 42 00:02:23,000 --> 00:02:26,040 Speaker 2: was running gas power services at the time, we asked 43 00:02:26,120 --> 00:02:28,079 Speaker 2: him to step up into a big job to run 44 00:02:28,560 --> 00:02:32,280 Speaker 2: all of Gas Power. We knew that was job one 45 00:02:32,360 --> 00:02:36,200 Speaker 2: with respect to the overall operational turnaround at GE, and 46 00:02:36,240 --> 00:02:40,120 Speaker 2: he and the team I think executed near flawlessly through that, 47 00:02:40,400 --> 00:02:42,960 Speaker 2: and then he picked up additional responsibility with the rest 48 00:02:42,960 --> 00:02:48,000 Speaker 2: of the power segment and then in turn the renewables businesses. 49 00:02:48,040 --> 00:02:50,600 Speaker 2: And at each step of the way, Scott stepped up 50 00:02:50,800 --> 00:02:54,799 Speaker 2: delivered built teams that did the same. So when it 51 00:02:54,840 --> 00:02:57,680 Speaker 2: came time to think about the next CEO for this 52 00:02:57,720 --> 00:03:00,360 Speaker 2: business as a public entity, Scott was an easy choice. 53 00:03:00,400 --> 00:03:02,800 Speaker 1: So it scotten nowt You've got the big job. I suspect, 54 00:03:02,800 --> 00:03:05,040 Speaker 1: even if it was flawless to use Larry's urnam, it 55 00:03:05,120 --> 00:03:07,760 Speaker 1: was not easy to do that turnaround. What in your 56 00:03:07,800 --> 00:03:10,960 Speaker 1: experience in GE and specifically in that turnaround, really do 57 00:03:10,960 --> 00:03:13,040 Speaker 1: you think prepares you for this big new role. 58 00:03:13,560 --> 00:03:16,040 Speaker 3: Well, I mean GE has always been a great laboratory 59 00:03:16,040 --> 00:03:18,880 Speaker 3: to learn and experiment, and we've always had great people. 60 00:03:19,040 --> 00:03:21,040 Speaker 3: But I think over the last five to five and 61 00:03:21,080 --> 00:03:24,120 Speaker 3: a half years, really the lean operating system that we've 62 00:03:24,160 --> 00:03:27,480 Speaker 3: been implementing and really started with gas right in nineteen 63 00:03:27,960 --> 00:03:30,680 Speaker 3: where we were on a monthly cadence with Larry and 64 00:03:30,760 --> 00:03:35,200 Speaker 3: really focusing a team that always had great ambition, but 65 00:03:35,280 --> 00:03:37,480 Speaker 3: did we really have an ability to focus on the 66 00:03:37,520 --> 00:03:42,240 Speaker 3: critical few customer KPIs every day while also protecting for 67 00:03:42,320 --> 00:03:46,200 Speaker 3: the long term breakthroughs and the ability to multitask those 68 00:03:46,240 --> 00:03:49,240 Speaker 3: things our teams weren't always great with, and that's really 69 00:03:49,240 --> 00:03:51,400 Speaker 3: a lot of what we were focused on in nineteen 70 00:03:51,920 --> 00:03:55,160 Speaker 3: into twenty together is to build that rhythm that we 71 00:03:55,200 --> 00:03:59,200 Speaker 3: could prioritize what mattered most to get the short term right, 72 00:03:59,360 --> 00:04:03,000 Speaker 3: but not at the expense of also investing for the 73 00:04:03,040 --> 00:04:04,760 Speaker 3: long term. And that's a lot of what we worked 74 00:04:04,760 --> 00:04:07,760 Speaker 3: on in gas Power together in nineteen and that was 75 00:04:07,800 --> 00:04:11,160 Speaker 3: really foundational for gas Power and it's really what we've 76 00:04:11,160 --> 00:04:13,160 Speaker 3: been extrapolating across the rest of Vernovo. 77 00:04:13,280 --> 00:04:15,600 Speaker 1: So as you take over this new role, tell me 78 00:04:15,600 --> 00:04:17,400 Speaker 1: what the opportunities you see and break it down, if 79 00:04:17,400 --> 00:04:19,039 Speaker 1: you would, between two categories. One is the one you 80 00:04:19,040 --> 00:04:22,000 Speaker 1: just talk about operationally, your lean approach and what that 81 00:04:22,040 --> 00:04:25,440 Speaker 1: does really more opportunities to really drive that further and 82 00:04:25,440 --> 00:04:28,480 Speaker 1: how much it's just a rising tide with energy transition. 83 00:04:28,760 --> 00:04:31,479 Speaker 3: We are excited about the markets that and where they're 84 00:04:31,520 --> 00:04:33,560 Speaker 3: going and there are a lot of examples of that today. 85 00:04:33,640 --> 00:04:36,680 Speaker 3: You know data centers in the US. It represented two 86 00:04:36,680 --> 00:04:39,599 Speaker 3: percent of the load growth in twenty twenty. Many people 87 00:04:39,600 --> 00:04:41,760 Speaker 3: think it could be eight percent by twenty thirty. 88 00:04:42,240 --> 00:04:45,479 Speaker 1: At the center of Vernova's strategy is growing its energy 89 00:04:45,480 --> 00:04:48,080 Speaker 1: business in the midst of a massive transition to more 90 00:04:48,120 --> 00:04:53,159 Speaker 1: sustainable energy around the world. It's chief sustainability officer, Roger Martella, 91 00:04:53,279 --> 00:04:56,039 Speaker 1: gives us an example how Vernova will set its priorities 92 00:04:56,080 --> 00:04:58,240 Speaker 1: in building out the electrical grid in a way that 93 00:04:58,400 --> 00:05:01,200 Speaker 1: is both good business good for the climate. 94 00:05:01,480 --> 00:05:04,000 Speaker 4: We know we're going to deploy the technology and run 95 00:05:04,040 --> 00:05:07,920 Speaker 4: businesses to develop technology to electrify the grid, but from 96 00:05:07,920 --> 00:05:10,520 Speaker 4: a sustainability perspective, we want to do more than just 97 00:05:10,600 --> 00:05:12,600 Speaker 4: put capacity on the grid. We want to focus on 98 00:05:12,680 --> 00:05:15,200 Speaker 4: where are we putting that capacity. How are we helping 99 00:05:15,240 --> 00:05:19,680 Speaker 4: countries that are struggling to provide affordable, reliable, sustainable electricity. 100 00:05:19,839 --> 00:05:22,120 Speaker 4: Can we double click on those countries and make sure 101 00:05:22,120 --> 00:05:24,360 Speaker 4: we're not just going where the phone's ringing? But how 102 00:05:24,360 --> 00:05:26,279 Speaker 4: can we affirm that we reach out to places in 103 00:05:26,279 --> 00:05:29,039 Speaker 4: the world to enhance sustainability. When it comes to. 104 00:05:29,040 --> 00:05:33,159 Speaker 3: Electrification, sustainability really is at the heart of everything we're doing. 105 00:05:33,240 --> 00:05:36,080 Speaker 3: And for us, we define sustainability as the complement of 106 00:05:36,160 --> 00:05:40,000 Speaker 3: both together, keeping the lights on while decreasing the carbon 107 00:05:40,040 --> 00:05:43,279 Speaker 3: intensity the install base every day. And it'd be wonderful 108 00:05:43,279 --> 00:05:46,520 Speaker 3: if we could wave a magic wand and have no carbon, 109 00:05:46,640 --> 00:05:48,920 Speaker 3: but the reality is that's not the world we live in. 110 00:05:49,000 --> 00:05:52,440 Speaker 3: So how do we sustainably electrify the world while making 111 00:05:52,520 --> 00:05:55,800 Speaker 3: it cleaner every day? They really go together, and to 112 00:05:55,920 --> 00:05:59,520 Speaker 3: do that, it really does require a complement of technologies 113 00:06:00,120 --> 00:06:03,200 Speaker 3: where Vernova is somewhat unique because we've got the power 114 00:06:03,279 --> 00:06:08,520 Speaker 3: generation technologies with things like gas, nuclear, wind, but we 115 00:06:08,640 --> 00:06:13,520 Speaker 3: also play across the grid at both moving electrons orchestrating 116 00:06:13,520 --> 00:06:17,000 Speaker 3: the grid, and the system's becoming more complicated, and our 117 00:06:17,040 --> 00:06:20,400 Speaker 3: ability to serve our customers with all of those solutions 118 00:06:20,440 --> 00:06:22,320 Speaker 3: gives us a unique vantage point. 119 00:06:22,520 --> 00:06:24,599 Speaker 1: So, Larry, as somebody who's about to turn over the keys, 120 00:06:24,640 --> 00:06:26,680 Speaker 1: if I can put that way too power, how do 121 00:06:26,760 --> 00:06:29,920 Speaker 1: you assess their opportunities going forward? I mean, what are 122 00:06:29,920 --> 00:06:32,520 Speaker 1: the really growth opportunities for Vernova? 123 00:06:32,880 --> 00:06:35,240 Speaker 2: Well, I think you just hit on it, David in 124 00:06:35,279 --> 00:06:38,599 Speaker 2: the question and Scott talking about all the different dimensions 125 00:06:38,600 --> 00:06:43,360 Speaker 2: of the energy transition We have excellent exposure, leadership positions 126 00:06:43,440 --> 00:06:46,880 Speaker 2: really and almost all the ones that matter. So I 127 00:06:47,200 --> 00:06:51,159 Speaker 2: don't really worry about the top line environment in this business, 128 00:06:51,160 --> 00:06:52,680 Speaker 2: and that we couldn't have said that four or five 129 00:06:52,760 --> 00:06:55,920 Speaker 2: years ago, but the world over, I think we really 130 00:06:55,960 --> 00:06:58,440 Speaker 2: are set in that regard, so we need to make 131 00:06:58,440 --> 00:06:59,800 Speaker 2: sure we execute. 132 00:07:00,520 --> 00:07:02,760 Speaker 1: How does wind fit into what you're doing, because that's 133 00:07:02,800 --> 00:07:04,839 Speaker 1: been more of a struggle not just for GE but 134 00:07:04,880 --> 00:07:07,880 Speaker 1: for others as well as opposed to gas power. How 135 00:07:07,880 --> 00:07:09,600 Speaker 1: do you see wind playing out? 136 00:07:09,720 --> 00:07:10,080 Speaker 2: You bet? 137 00:07:10,160 --> 00:07:12,920 Speaker 3: It has been an industry wide challenge. But if you 138 00:07:12,960 --> 00:07:15,120 Speaker 3: take a step back and think about the world today 139 00:07:15,240 --> 00:07:19,120 Speaker 3: gets about seven percent of its power from electricity from wind. 140 00:07:19,520 --> 00:07:22,760 Speaker 3: Most projections believe by twenty forty that needs to be 141 00:07:22,760 --> 00:07:26,080 Speaker 3: closer to twenty five percent. So wind matters. But the 142 00:07:26,160 --> 00:07:30,640 Speaker 3: reality is we need to industrialize at scale the wind 143 00:07:30,720 --> 00:07:34,280 Speaker 3: products to a level that it can actually reach those levels. 144 00:07:34,320 --> 00:07:36,400 Speaker 3: And that's really what we're focused on right now is 145 00:07:36,760 --> 00:07:40,000 Speaker 3: building workhorse products that we can do at scale. We're 146 00:07:40,000 --> 00:07:42,520 Speaker 3: seeing real progress with that. We've turned our onshore wind 147 00:07:42,520 --> 00:07:45,280 Speaker 3: business back to profitability the second half of last year, 148 00:07:45,600 --> 00:07:48,520 Speaker 3: with momentum to follow. We're working on doing much of 149 00:07:48,560 --> 00:07:50,080 Speaker 3: the same with our offshore wind business. 150 00:07:50,160 --> 00:07:50,480 Speaker 2: Today. 151 00:07:50,840 --> 00:07:54,080 Speaker 1: The government plays a large role in Vernova's future, as 152 00:07:54,120 --> 00:07:57,160 Speaker 1: it has seen the public private partnership strengthen over the 153 00:07:57,240 --> 00:07:58,840 Speaker 1: last eighteen to twenty four months. 154 00:07:59,080 --> 00:08:02,040 Speaker 3: I do think in the electric power system, public private 155 00:08:02,080 --> 00:08:05,120 Speaker 3: partnerships are always going to matter. We've built this grid 156 00:08:05,160 --> 00:08:08,080 Speaker 3: and the system over one hundred years on the foundation 157 00:08:08,200 --> 00:08:11,000 Speaker 3: of public private partnerships, but there's a lot of other 158 00:08:11,080 --> 00:08:15,040 Speaker 3: drivers beyond that. Today the reality is industries are electrifying, 159 00:08:15,240 --> 00:08:18,560 Speaker 3: and they're going to electrify either way. We think about evs, 160 00:08:18,720 --> 00:08:22,240 Speaker 3: we think about home heating and heat pumps. That's going 161 00:08:22,320 --> 00:08:26,920 Speaker 3: to happen and that demand cycle exists regardless, but there's 162 00:08:26,960 --> 00:08:29,000 Speaker 3: also always going to be a role for that public 163 00:08:29,000 --> 00:08:29,880 Speaker 3: private partnership. 164 00:08:30,040 --> 00:08:32,760 Speaker 4: Jennifer Granholm, the Secretary of Energy, likes to say the 165 00:08:32,880 --> 00:08:36,080 Speaker 4: energy transition should be private sector led, enabled by the 166 00:08:36,080 --> 00:08:39,320 Speaker 4: public sector, and that's just been this fundamental realignment between 167 00:08:39,360 --> 00:08:41,679 Speaker 4: the public sectors and the private sectors that's given us 168 00:08:41,679 --> 00:08:44,680 Speaker 4: great tailwinds to go ahead and partner with the government 169 00:08:44,960 --> 00:08:47,000 Speaker 4: to accelerate innovation and technology. 170 00:08:48,000 --> 00:08:51,079 Speaker 1: We continue the conversation with Larry Culp and Scott Straisik 171 00:08:51,440 --> 00:08:55,240 Speaker 1: taking up Larry's role as CEO of ge Aerospace and 172 00:08:55,280 --> 00:08:57,920 Speaker 1: the common heritage it will continue to share with GeV 173 00:08:58,000 --> 00:08:59,400 Speaker 1: Vernova after the spinoff. 174 00:09:01,040 --> 00:09:05,520 Speaker 2: We have a tremendous visibility both with respect to our 175 00:09:05,600 --> 00:09:08,560 Speaker 2: service business, which represents about seventy percent of our revenue, 176 00:09:08,920 --> 00:09:12,720 Speaker 2: simply because the airlines are back well above twenty nineteen 177 00:09:13,080 --> 00:09:16,880 Speaker 2: activity levels and they need us to support the engines 178 00:09:16,880 --> 00:09:20,120 Speaker 2: that propel all of that traffic. And at the same 179 00:09:20,160 --> 00:09:23,000 Speaker 2: time they're looking to expand and modernize their fleets, both 180 00:09:23,000 --> 00:09:26,480 Speaker 2: in single aisle and wide body configurations. So in order 181 00:09:26,520 --> 00:09:28,920 Speaker 2: for a new plane today, a new engine probably isn't 182 00:09:28,920 --> 00:09:33,079 Speaker 2: fulfilled until twenty thirty. So we have tremendous demand potential 183 00:09:33,200 --> 00:09:35,839 Speaker 2: both in services and in new units. We need to 184 00:09:35,880 --> 00:09:39,280 Speaker 2: make sure we're delivering and delivering profitably over the next 185 00:09:39,280 --> 00:09:39,920 Speaker 2: several years. 186 00:09:40,640 --> 00:09:42,640 Speaker 1: I'm not sure how many people understand. I'm not sure 187 00:09:42,679 --> 00:09:46,640 Speaker 1: I understood. And the extent of your defense contracting, I 188 00:09:46,679 --> 00:09:49,440 Speaker 1: mean a substantial portion, not a majority, but a substantial 189 00:09:49,480 --> 00:09:51,720 Speaker 1: portion is defense. How does that figure a new future plan? 190 00:09:52,080 --> 00:09:55,360 Speaker 2: Well, our defense business. We talked about that this week 191 00:09:55,440 --> 00:09:58,040 Speaker 2: with investors. We're going to call that segment Defense and 192 00:09:58,080 --> 00:10:03,880 Speaker 2: Propulsion technologies. That's nine billion dollar business primarily in defense, 193 00:10:04,040 --> 00:10:07,480 Speaker 2: large position here in the US, particularly with rotorcraft. I 194 00:10:07,559 --> 00:10:11,040 Speaker 2: think helicopters, the Apaches, and the Blackhawks in addition to 195 00:10:11,160 --> 00:10:16,400 Speaker 2: combat fighter aircraft. And as those assets are being used 196 00:10:16,520 --> 00:10:20,320 Speaker 2: with more frequency, we contribute to the readiness of those assets, 197 00:10:20,440 --> 00:10:24,640 Speaker 2: and in turn, as our war fighters need more capability, 198 00:10:25,120 --> 00:10:27,840 Speaker 2: be it in a rotocraft or in a combat jet, 199 00:10:28,280 --> 00:10:31,760 Speaker 2: that's where the next generation of gerospace technology has a 200 00:10:31,840 --> 00:10:32,439 Speaker 2: role to play. 201 00:10:32,600 --> 00:10:33,959 Speaker 1: As we look around the world right now, one of 202 00:10:34,000 --> 00:10:36,640 Speaker 1: the things we hear repeatedly is that geopolitical risk has 203 00:10:36,679 --> 00:10:39,480 Speaker 1: gone up substantially. We've got a ground war in Europe, 204 00:10:39,520 --> 00:10:42,760 Speaker 1: We've got conflict in the Middle East, we've got issues 205 00:10:42,760 --> 00:10:44,400 Speaker 1: with the South China at sea. We're not sure what's 206 00:10:44,400 --> 00:10:47,520 Speaker 1: going they're on as you look out. Does that suggest 207 00:10:47,559 --> 00:10:49,520 Speaker 1: to you that there's going to be a continuing rising 208 00:10:49,640 --> 00:10:51,199 Speaker 1: tide on your defense contracting. 209 00:10:51,640 --> 00:10:53,960 Speaker 2: We believe so, David. Now, obviously there's a little bit 210 00:10:53,960 --> 00:10:58,040 Speaker 2: of political dysfunction relative to the budget currently in Washington, 211 00:10:58,480 --> 00:11:00,680 Speaker 2: but what we shared with investors was very much that 212 00:11:00,760 --> 00:11:05,559 Speaker 2: same geopolitical backdrop. Unfortunately, that may not get better before 213 00:11:05,600 --> 00:11:09,840 Speaker 2: it gets more tense. And again, both here in the 214 00:11:09,920 --> 00:11:14,680 Speaker 2: US and around the world, our business supports the warfighter, 215 00:11:15,080 --> 00:11:18,560 Speaker 2: both in both configurations. And we know that there are 216 00:11:18,720 --> 00:11:22,320 Speaker 2: advanced technologies that governments want to deploy or be ready 217 00:11:22,360 --> 00:11:26,480 Speaker 2: to deploy over time, and that's where we're investing from 218 00:11:26,520 --> 00:11:27,520 Speaker 2: an R and D perspective. 219 00:11:27,880 --> 00:11:29,439 Speaker 1: So, Laurie, you and I have talked about it before 220 00:11:29,679 --> 00:11:32,800 Speaker 1: every CEO, Scott and you maybe your most important, most 221 00:11:32,800 --> 00:11:36,080 Speaker 1: immediate task is allocating capital, figuring out to you keep it, 222 00:11:36,120 --> 00:11:37,640 Speaker 1: do you invest it? To your return it back to 223 00:11:37,679 --> 00:11:40,959 Speaker 1: the Showders. You made an announcement this week about returning 224 00:11:40,960 --> 00:11:43,720 Speaker 1: to shareholders subcapital. Give us a sense of why you 225 00:11:43,800 --> 00:11:44,720 Speaker 1: made that decision. 226 00:11:45,559 --> 00:11:48,880 Speaker 2: Well, David, a lot of investors have been anticipating a 227 00:11:48,920 --> 00:11:53,280 Speaker 2: significant excess capital position at Geero Space, and I love 228 00:11:53,320 --> 00:11:55,320 Speaker 2: saying that because again, it wasn't that long ago. We 229 00:11:55,320 --> 00:11:57,000 Speaker 2: were looking at a mountain of debt that we needed 230 00:11:57,040 --> 00:12:00,000 Speaker 2: to knock down, and we did. But what we share 231 00:12:00,120 --> 00:12:02,640 Speaker 2: with investors was we think over the next three years, 232 00:12:02,800 --> 00:12:06,440 Speaker 2: we probably have thirty four to thirty six billion dollars 233 00:12:06,440 --> 00:12:10,600 Speaker 2: of capital to allocate. Will first tend to what we 234 00:12:10,679 --> 00:12:14,920 Speaker 2: need to attend to from an operating perspective, organic investments 235 00:12:15,720 --> 00:12:19,800 Speaker 2: be it R and d cap X are a second order. 236 00:12:20,400 --> 00:12:22,360 Speaker 2: But we're still going to have a tremendous amount of 237 00:12:22,360 --> 00:12:24,960 Speaker 2: capital to deploy. And what we said is we see 238 00:12:25,000 --> 00:12:28,280 Speaker 2: seventy to seventy five percent of that going back to 239 00:12:28,320 --> 00:12:31,480 Speaker 2: shareholders by way of buybacks in dividends. The board just 240 00:12:31,559 --> 00:12:35,320 Speaker 2: last week authorized that fifteen billion dollar stock buy back. 241 00:12:35,840 --> 00:12:38,120 Speaker 2: That will leave twenty to twenty five percent of our 242 00:12:38,160 --> 00:12:42,559 Speaker 2: available free cash to reinvest inorganically. And I don't think 243 00:12:42,559 --> 00:12:44,959 Speaker 2: we'll do a lot of big M and A to start, 244 00:12:45,360 --> 00:12:48,079 Speaker 2: but you'll see us continue to do smaller boltons and 245 00:12:48,160 --> 00:12:51,439 Speaker 2: I think four to five our existing competitive positions. 246 00:12:51,520 --> 00:12:53,160 Speaker 1: I think a lot of people would hear that and say, well, 247 00:12:53,200 --> 00:12:55,079 Speaker 1: that's really good news for the shareholders because they get 248 00:12:55,080 --> 00:12:57,160 Speaker 1: more cash in their pocket that they can do with 249 00:12:57,240 --> 00:12:59,400 Speaker 1: what they want. At the same time, and also indicates 250 00:12:59,400 --> 00:13:01,559 Speaker 1: you don't see a lot of great investment opportunities out 251 00:13:01,559 --> 00:13:03,480 Speaker 1: there for that capital, because if you did, you'd keep 252 00:13:03,520 --> 00:13:04,400 Speaker 1: the capital invested. 253 00:13:05,040 --> 00:13:05,199 Speaker 4: Well. 254 00:13:05,240 --> 00:13:08,880 Speaker 2: I think that we have reserved the right to explore 255 00:13:09,120 --> 00:13:12,600 Speaker 2: those inorganic opportunities. But in many respects, David, the best 256 00:13:12,600 --> 00:13:16,040 Speaker 2: investment that we can make is in geero Space, and 257 00:13:16,080 --> 00:13:18,400 Speaker 2: that's what you see with that capital allocation framework. 258 00:13:18,800 --> 00:13:20,800 Speaker 1: What about your capital allocation? What are you looking AT's 259 00:13:20,800 --> 00:13:21,880 Speaker 1: gun a. 260 00:13:21,840 --> 00:13:24,840 Speaker 3: Lot of organic growth opportunities. Again, when we think about 261 00:13:24,880 --> 00:13:28,240 Speaker 3: the grid and the substantial modernization needed of the grid, 262 00:13:28,280 --> 00:13:31,800 Speaker 3: we're going to invest substantially in capacity additions to do that. 263 00:13:32,400 --> 00:13:35,800 Speaker 3: There is still new technology that needs to be advanced on, 264 00:13:35,920 --> 00:13:39,720 Speaker 3: things like direct air capture, things like small modular reactors 265 00:13:39,760 --> 00:13:43,000 Speaker 3: and the grid software that's critical to the future. That's 266 00:13:43,040 --> 00:13:46,480 Speaker 3: really our near term priority is really investing organically and 267 00:13:46,559 --> 00:13:49,400 Speaker 3: positioning this business to grow. And as we do that 268 00:13:49,480 --> 00:13:51,959 Speaker 3: first things first, we'll then evaluate some of these other 269 00:13:52,000 --> 00:13:52,760 Speaker 3: things over time. 270 00:13:54,200 --> 00:13:56,959 Speaker 1: You cannot talk about the future of the aviation business 271 00:13:57,040 --> 00:14:00,839 Speaker 1: without talking about the future of aviation itself, and ge 272 00:14:00,880 --> 00:14:05,000 Speaker 1: Aerospace VP of Engineering Muhammad Ali has some bold thoughts 273 00:14:05,000 --> 00:14:06,839 Speaker 1: about what that future may hold. 274 00:14:07,559 --> 00:14:13,000 Speaker 5: Our purpose statement is we invent the future flight, lift 275 00:14:13,000 --> 00:14:16,360 Speaker 5: people up and bring them home safely. And we believe 276 00:14:16,400 --> 00:14:19,840 Speaker 5: it starts with bringing people home safely, and that earns 277 00:14:19,880 --> 00:14:23,320 Speaker 5: us the right to lift people up, which in turn 278 00:14:23,440 --> 00:14:27,160 Speaker 5: earns us the right to invent the future flight. I 279 00:14:27,200 --> 00:14:32,680 Speaker 5: think Rice has this beautiful open fan technology which attracts 280 00:14:32,680 --> 00:14:34,800 Speaker 5: all the attention and obviously a lot of the questions. 281 00:14:34,800 --> 00:14:39,200 Speaker 5: But right behind that hyper electric capable, state of the 282 00:14:39,320 --> 00:14:43,880 Speaker 5: art high pressure temperature capability, hYP pressure turbine capability that 283 00:14:43,920 --> 00:14:48,120 Speaker 5: we are designing using state of the art supercomputing, we 284 00:14:48,160 --> 00:14:51,520 Speaker 5: are also at significant advances in materials that we are 285 00:14:51,520 --> 00:14:56,280 Speaker 5: putting in there, and sustainable aviation fuel capable from day one. 286 00:14:57,240 --> 00:14:59,960 Speaker 2: This is a business that has really been built developing 287 00:15:00,120 --> 00:15:05,200 Speaker 2: generational improvements in sustainability in jet engines over time, but 288 00:15:05,280 --> 00:15:08,600 Speaker 2: we've often not referred to it as sustainability. We've really 289 00:15:08,640 --> 00:15:10,920 Speaker 2: referred to it as efficiency. But every time a next 290 00:15:10,960 --> 00:15:14,400 Speaker 2: generation aircraft comes forward, it's really the result of a 291 00:15:14,440 --> 00:15:17,800 Speaker 2: next generation engine technology coming to market. 292 00:15:18,000 --> 00:15:19,840 Speaker 1: Scott, the same question to you when it comes to power. 293 00:15:20,080 --> 00:15:23,160 Speaker 1: We've got technological development. What are you looking at? What 294 00:15:23,320 --> 00:15:26,360 Speaker 1: is out there on the horizon for ge, for nova. 295 00:15:26,160 --> 00:15:29,040 Speaker 3: There's a lot of exciting things. Direct air capture, how 296 00:15:29,040 --> 00:15:31,880 Speaker 3: do we manage carbon? We've got a prototype right now 297 00:15:31,880 --> 00:15:34,400 Speaker 3: that's pulling carbon out of the air as we speak, 298 00:15:34,640 --> 00:15:38,080 Speaker 3: small modular reactor three hundred mego op blocks of power 299 00:15:38,120 --> 00:15:41,280 Speaker 3: that we'll commission this decade that we think can transform 300 00:15:41,680 --> 00:15:45,960 Speaker 3: the nuclear industry, robotics and inspection technology with our wind 301 00:15:46,000 --> 00:15:49,880 Speaker 3: business that ensures that every blade that leaves our factory 302 00:15:49,960 --> 00:15:53,480 Speaker 3: has been fully inspected to get quality right the first time. 303 00:15:54,240 --> 00:15:58,000 Speaker 3: Grid software our grid OS grid Orchestration system as we 304 00:15:58,040 --> 00:16:00,600 Speaker 3: say it, to really help our customers deal with the 305 00:16:00,640 --> 00:16:04,040 Speaker 3: complexities and the grid today as more folks put solar 306 00:16:04,040 --> 00:16:07,840 Speaker 3: panels on their homes and chargvs at night, and there's 307 00:16:07,840 --> 00:16:12,920 Speaker 3: more bidirectional flows of electricity, all opportunities, so a long list. 308 00:16:13,640 --> 00:16:17,000 Speaker 1: Even as aerospace and energy separated ge there is a 309 00:16:17,080 --> 00:16:20,040 Speaker 1: deeply shared DNA going all the way back to Thomas 310 00:16:20,200 --> 00:16:23,960 Speaker 1: Edison shared DNA. None of the sister companies wants to 311 00:16:23,960 --> 00:16:24,400 Speaker 1: give up. 312 00:16:24,880 --> 00:16:28,920 Speaker 5: We absolutely have shared heritage and actually that shared heritage 313 00:16:29,080 --> 00:16:32,320 Speaker 5: goes all the way back to Thomas Edison who founded 314 00:16:32,480 --> 00:16:36,080 Speaker 5: General Ectric Company, and that shared heritage. There is a 315 00:16:36,160 --> 00:16:41,080 Speaker 5: statement that's written at the entrance to many our facilities, 316 00:16:41,080 --> 00:16:46,640 Speaker 5: including our aerospace research facility, that says that quote from 317 00:16:46,680 --> 00:16:50,840 Speaker 5: Thomas Edison that said, I find what the world needs 318 00:16:51,360 --> 00:16:55,280 Speaker 5: and I go about inventing it. And that's exactly what 319 00:16:55,320 --> 00:16:57,840 Speaker 5: we will be doing in g Aerospace and I am 320 00:16:57,880 --> 00:17:00,960 Speaker 5: confident that that's what the GE Vernova team is going 321 00:17:01,000 --> 00:17:02,560 Speaker 5: to be doing as well well. 322 00:17:02,560 --> 00:17:04,879 Speaker 4: One thing I'd say about working at Jieve Andover you 323 00:17:04,880 --> 00:17:07,280 Speaker 4: come to work every day and you feel like you're 324 00:17:07,320 --> 00:17:10,159 Speaker 4: in awe of history. We have eighty thousand employees with 325 00:17:10,200 --> 00:17:13,080 Speaker 4: these incredibly diverse backgrounds, all around the world, doing so 326 00:17:13,119 --> 00:17:15,719 Speaker 4: many different things. This is the one thing we have 327 00:17:15,800 --> 00:17:19,080 Speaker 4: in common. We're motivated by this purpose, this purpose built 328 00:17:19,080 --> 00:17:23,760 Speaker 4: company of electrification and decarbonization. So that's what inspires us 329 00:17:23,840 --> 00:17:24,399 Speaker 4: every day. 330 00:17:24,800 --> 00:17:27,080 Speaker 2: When I reflect on the last five and a half years, 331 00:17:27,400 --> 00:17:30,200 Speaker 2: it really has been about the team. David Scott talked 332 00:17:30,200 --> 00:17:32,679 Speaker 2: about what we take forward. We take a lot of 333 00:17:32,720 --> 00:17:37,800 Speaker 2: technology forward, but this is an immensely talented, resilient, ambitious 334 00:17:37,840 --> 00:17:40,800 Speaker 2: team that I couldn't be more proud of. Go back 335 00:17:40,840 --> 00:17:43,000 Speaker 2: to twenty eighteen, there were a lot of people who 336 00:17:43,040 --> 00:17:45,879 Speaker 2: wanted to give up on our company. We didn't, and 337 00:17:45,960 --> 00:17:47,639 Speaker 2: there were a lot of folks that came into our 338 00:17:47,640 --> 00:17:51,600 Speaker 2: boardroom and into the management ranks who understood just how 339 00:17:51,640 --> 00:17:55,919 Speaker 2: good these businesses can be, how strong this team is 340 00:17:56,000 --> 00:17:58,359 Speaker 2: day in day out. We just needed a little bit 341 00:17:58,359 --> 00:18:01,080 Speaker 2: of time to work through some of those Scott and 342 00:18:01,119 --> 00:18:04,280 Speaker 2: I know our companies go back to Edison right. A 343 00:18:04,320 --> 00:18:08,040 Speaker 2: lot of us over time have studied the GE management playbook. 344 00:18:08,280 --> 00:18:12,399 Speaker 2: Scott grew up in that environment. I grew up looking 345 00:18:12,400 --> 00:18:15,440 Speaker 2: in from the outside. So we're proud of that history 346 00:18:15,480 --> 00:18:19,520 Speaker 2: and everything that so many people have contributed to our 347 00:18:19,600 --> 00:18:22,639 Speaker 2: company over time. We're the stewards of the business at 348 00:18:22,680 --> 00:18:24,640 Speaker 2: this point in time, and even though we go forward 349 00:18:24,640 --> 00:18:28,040 Speaker 2: as three, we'll share that brand, we'll share that DNA, 350 00:18:28,640 --> 00:18:32,120 Speaker 2: and I'm sure Edison and everybody else looking down will 351 00:18:32,160 --> 00:18:34,520 Speaker 2: be proud of what they see from these three businesses 352 00:18:34,560 --> 00:18:36,320 Speaker 2: on an independent basis going forward. 353 00:18:36,960 --> 00:18:39,840 Speaker 1: Many thanks to Larry Kulp of GE Aerospace and Scott 354 00:18:39,840 --> 00:18:41,800 Speaker 1: Straisik of GE Vernova.