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There is plenty of work yet to do on the portfolio that Welch created. GE's long-cycle businesses, such as power and aircraft, where orders are locked in years in advance, are in good shape. Not so the short-cycle divisions, such as appliances and lighting. Many observers expect Immelt to get out of the cutthroat business of selling dishwashers and refrigerators, which Welch was unable to do. Still, "having a few consumer brands is worth something," says Noel Tichy, a University of Michigan management professor who ran GE's famed Crotonville executive-training center in the mid-1980s. Immelt wants to quicken the pace of innovation at GE, and a year-old R.-and-D. center in India--along with China, the key global market he'll have to tap for growth--should help. He also plans to push the company's continuing move into the digital age, expanding the use of online auctions to cut costs.
A potential stumbling block is, quite simply, GE's size. At some point, skeptics argue, GE will find it nearly impossible to continue its torrid pace of growth. "Ultimately, the law of large numbers will have to win out," William Fiala, an analyst at Edward Jones, wrote in a report on GE that came out last week. He means that to increase sales just 10%, GE will have to find $13 billion in new business this year and $14.3 billion next year. Not surprisingly, Immelt, who sees GE as a collection of smaller pieces with lots of room to grow, doesn't agree. "I don't feel burdened by size. A great idea at GE is worth a billion dollars, not a million."
GE typically makes 100 acquisitions a year--fuel for much of its annual growth over the past 15 years. That pace may have to quicken. Earlier this summer, GE Capital paid $5.3 billion for Heller Financial, which should give it more access to financing small and medium-size businesses. Capital's only possible "missing link," Merrill Lynch analyst Jeanne Gallagher Terrile points out, is a thriving business managing money for aging baby boomers.
The economic slowdown has been feeding time for GE Capital, which is busy scooping up distressed assets, but it's a decidedly different experience for the $6.8 billion-in-sales NBC network. Like all other media, the network is suffering through a painful advertising slump. The current woes, however, haven't convinced Immelt, who's being counseled on the vagaries of the broadcasting business by NBC boss Robert Wright, that he has to marry NBC to a wider media portfolio, whether a Hollywood studio or a cable company. He says he has no plans to sell NBC, though he'd like to acquire more stations.
Perhaps, in retrospect, Immelt should have dressed a little snazzier for his coming-out party last November. Despite the fact that he and his boss both showed up wearing the same casual outfit--slacks, sports jacket and blue open-collared shirt--Immelt isn't a Welch clone. Where Welch is known for a blowtorch temper, Immelt is low-key and understated--more likely to tease employees than scold them to get his point across. "If you, say, missed your numbers, you wouldn't leave a meeting with him feeling beat up but more like you let your dad down," says Peter Foss, a longtime friend and colleague of Immelt's and president of GE Polymerland, part of its plastics business.