GE’s Larry Culp learns to say “no”

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U.S. President Joe Biden visits the production line for the Hummer EV as he tours the General Motors 'Factory ZERO' electric vehicle assembly plant, next to UAW President Ray Curry, U.S. Secretary of Labor Marty Walsh and General Motors CEO Mary Barra, in Detroit, Michigan, U.S. November 17, 2021. REUTERS/Jonathan Ernst REFILE

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NEW YORK, Jan 25 (Reuters Breakingviews) - There’s lots General Electric boss Larry Culp can’t control. One thing he can do is say “no.” The $106 billion industrial conglomerate, which makes wind turbines and engines for airplanes, is going to benefit when the economy fully returns – and when it can complete its planned breakup read more . Since neither is happening soon, GE’s word of the moment is “selectivity.”

Culp said on Tuesday that supply chain issues hurt its fourth quarter revenue, which fell 3% to around $20 billion. Its onshore wind business had some technical glitches, and orders fell 23% in the quarter compared to the previous year, as they did in its power business. Aviation, the biggest division, looked better. It’s the only bit where revenue increased, and maintenance visits from customers went up too.

But GE also says it sacrificed revenue – up to 4 percentage points – by being picky, and not chasing unprofitable business. That’s sensible, since investors want more of the $5.1 billion in free cash GE generated in 2021 to help pay down debt. For now, though, it means revenue may be slow to pick up. As so often at GE, good news comes with a caveat. (By John Foley)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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Editing by Lauren Silva Laughlin and Sharon Lam

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