iSixSigma

GE

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  • #29234

    anon
    Participant

     
    GE Is Calling

    We’ve mentioned before in this space that there is one big positive coming out of the Enron mess: the sudden willingness of many companies to open up and let us peek inside their operations. Take mighty General Electric (NYSE: GE), for example. Today, the world’s largest company decided it cared enough about its loyal investors that it held an earnings conference call. Not unusual, you say? Well, this was the first such call in GE’s 110-year history.

    The call followed an earnings report that was somewhat disappointing, at least on the revenue side. First-quarter sales were nearly flat from a year ago, at $30.5 billion. That was about 6% lower than consensus estimates.

    The company’s earnings actually fell, but that was because of a non-cash accounting change related to goodwill for acquisitions. Excluding that charge, GE earned $0.35 a share — in line with estimates and a 17% increase over last year’s first quarter.

    All in all, it appears the company is still trying to shake off the effects of the economic downturn. With CEO Jeff Immelt speaking of “this still-difficult economy,” GE’s outlook is still a bit foggy… although it is, for now, sticking to its full-year earnings target of $1.65 to $1.67 a share.

    GE fell nearly 10% today — one of its worst one-day drops ever.

    Quote of Note

    “For God’s sake, give me the young man who has brains enough to make a fool of himself.” — Robert Louis Stevenson 
    GE Is Calling

    We’ve mentioned before in this space that there is one big positive coming out of the Enron mess: the sudden willingness of many companies to open up and let us peek inside their operations. Take mighty General Electric (NYSE: GE), for example. Today, the world’s largest company decided it cared enough about its loyal investors that it held an earnings conference call. Not unusual, you say? Well, this was the first such call in GE’s 110-year history.

    The call followed an earnings report that was somewhat disappointing, at least on the revenue side. First-quarter sales were nearly flat from a year ago, at $30.5 billion. That was about 6% lower than consensus estimates.

    The company’s earnings actually fell, but that was because of a non-cash accounting change related to goodwill for acquisitions. Excluding that charge, GE earned $0.35 a share — in line with estimates and a 17% increase over last year’s first quarter.

    All in all, it appears the company is still trying to shake off the effects of the economic downturn. With CEO Jeff Immelt speaking of “this still-difficult economy,” GE’s outlook is still a bit foggy… although it is, for now, sticking to its full-year earnings target of $1.65 to $1.67 a share.

    GE fell nearly 10% today — one of its worst one-day drops ever.

    Quote of Note

    “For God’s sake, give me the young man who has brains enough to make a fool of himself.” — Robert Louis Stevenson

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    #74331

    john beaudoin
    Participant

    Note: I am not an employee of GE in making these comments.
    Enron will have some effects accross the country for many companies.  Black and Veatch, the largest engineering firm in the USA is losing business due to the drop in Power Plant constructions fueled by the ENRON collapse.  Also, many companies like Xerox are also worried about accounting issues.
    From reading your message, I would infer that you are trying to make a point that because a company adopts a 6-Simga strategic implementation, the company doesn’t show any long-term benefits or realize any significant improvements with your evidence being the earnings per share and the falling stock price of GE.  Also, you are stating that GE’s 6-Sigma savings may have been grossly inflated and that all of the companies implementing 6-Sigma today did so because of GE’s success, which you are supposing is not really a success.  If this is the case, I would have to disagree with your assumption.
    First of all, if you look at the resulting data of earnings for share, you must realize that there are many variables that go into determining that number (accurate accounting asside).  Note that there are not many companies that have done well in the economic downturn, which started when the Fed was raising interest rates over a year ago because of there was nothing left in the labor pool pond and also had the goal of breaking the tech bubble.  The downturn was compounded on Sept. 11.  In spite of this, if you look at many of the 6-Sigma companies, they still reported profits.  Many other companies had losses for the year.
    Another influence is the way GE manages its business.  GE uses a forced distribution in the way they evaluate the performance of their employees.  In doing so, they take the bottom 10% of their performers and let them persue carreer opportunities elsewhere.  They use internal competition as a means to motivate their employees.  If Demming is the savior of business, then GE is the anti-savior.  Any company can perform much better with internal cooperation than internal competition.  As a result, their employees work under a lot of stress, may try to undermine each other in some cases, etc.  This management style is very counterproductive to 6-Sigma.  Another problem is that all of their belted employess are competing for savings dollars, have incentive to cheat the numbers to avoid from being in the bottom 10%, etc.
    There are other 6-Sigma companies that do not use forced distributions, inspire a more cooperative environment, have goals for evaluations agreed upon between the manager and employee up front, and focus on core competancies and how things get done over just meeting the number in the end.  Take Sony for example.  Because of the economy, it is not a big profit year for the company, but the stock has performed extremely well, quality levels of the product are extremely high, and the company has now passed Panasonic to be the number one producer of consumer electronics.  Guess what: Sony has been 6-Sigma for the last 3 years, and is still growing within the company.

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    #74339

    RR Kunes
    Member

    What does this garbage have to do with six sigma?  Come on guys let’s get back to the basics of this site.

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    #74363

    Jack Welch
    Participant

    What does it have to do with 6S?   First Motorola hit the skids, then Enron, now GE accounting practices are being questioned.  Doesn’t the accountants have to sign off on 6S projects.  Bring on the soft savings boys and let the next generation worry about explaining them.   If nothing else you can always blame the bottom 10% you let go…………….got to love the GE way of life and its 6S marriage!

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    #74366

    Mikel
    Member

    Hey Jack,
    Read the post – I did. GE falls short of expectations but continues to be insanely profitable. Spew your nonsense where there is at least a hint of something to support it.

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    #74382

    Jack Welch
    Participant

    Stan, get your head out of the sand!  GE is a profit’s leader?  Why are investors bailing out of GE stock as it share price pluments?  Why is the SEC looking at questioning GE’s accounting practices? This same accounting team that is scamming investors and raising the eyebrows of the SEC is the same one that approves 6S projects.  Got to love those soft savings that reach the bottom line!

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    #74404

    Thomas Swieringa
    Member

    This all so good!! Time to bring in Goldratt’s Accounting Methodologies, we’re on a mission!

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    #74406

    Mikel
    Member

    Jack,
    You are a joke, you don’t know what you are talking about.

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    #74412

    Jack Welch
    Participant

    Stan, quick sell off the GE stock before you lose any more!  All I do is read the newspapers and watch the stockmarket..its all black and white to touch, feel and see unlike those funny soft saving
    You GE-er!
     
    Jack W.

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    #74416

    john beaudoin
    Participant

    The stock has dropped 10%.  This is the best opportunity to purchase GE stock in a long time.  You buy low and sell high, right?  There is a GE 6-Sigma Master Blackbelt in one of my MBA classes at KU, he indicated that although revenues have been flat, their profit has actually gone up over last year due to lowered expenses as the result of 6-Sigma projects.  The big panic in the market is only due to the fear of investors that their could be some accounting irregularities.  After the smoke clears, I beleive you will see investors return to GE.  Note:  I don’t work for GE.

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