General Electric announced a major restructuring of its Renewable Energy division, adding the grids, solar and energy storage businesses currently housed in the company’s Power division – while eliminating the top layer of management at its global onshore wind business.
The restructuring will greatly expand the Paris-based Renewable Energy (GE-RE) division, adding roughly $5bn in annual revenues to create a $16bn global business with 40,000 employees, up from about 23,000 today. GE-RE is already among the most technologically diverse in the global renewables industry, holding GE's onshore wind, offshore wind and hydroelectric businesses.
The move appears to be a vote of confidence from GE’s new chief executive Larry Culp in both GE-RE and its leader, Jérôme Pécresse, who came to the company as part of its GE’s acquisition of Alstom’s power and grids businesses in 2015.
"This strategic realignment positions GE to lead in the fast-growing renewable energy market," Culp said in a statement.
By bringing GE’s various renewables, storage and grids technologies into a “single, simplified” Renewable Energy division, the company aims to operate more efficiently, and be better positioned to integrate technologies and pursue hybrid projects.
As part of the shakeup, the top management layer at GE's global onshore wind business currently led by Pete McCabe will “disappear”, Pécresse said in a call with journalists. Going forward, “the decision power and execution capabilities will be transferred to the regions”, he said, and “the regions will report directly to me”.
The result will be an onshore wind turbine business that’s “more reactive and closer to customers”.
“We’re eliminating a layer in the organisation, so there will be some minimal job reductions, but no site closures and no headquarters closures.”
In response to a question about McCabe's future, the company said: "Pete is a valued member of the GE team and is exploring possibilities for his next role."
In another change, GE will tie together its various wind services units – now spread across onshore, offshore and blades – into a single Digital Services business to be led by Anne McEntee, currently vice president for Digital Services at GE-RE.
GE, whose fourth-quarter financial results are due out tomorrow, is undergoing one of the largest restructuring efforts in its history, retrenching around three core industrial businesses – Aviation, Power and Renewable Energy.
Last autumn GE booted chief executive John Flannery after just a year on the job, replacing him with Culp – previously the long-time CEO of rival US conglomerate Danaher.
Pécresse said the ongoing uncertainty around GE is not impacting his division's relationship with its customers, adding that the newly expanded business "will only help" those relationships.