In response to the coronavirus pandemic, Henry Lawrence Culp, Jr., Chairman and CEO of GE, shared a message to the company’s employees which highlights the Aviation and Healthcare sectors of the business.
The message to employees included the announcement of Culp forgoing his full salary for the remainder of 2020, and David Joyce, Vice-Chairman of GE forgoing half of his salary.
By taking the actions mentioned in his letter below, Culp believes that the company will preserve $500m to $1bn in 2020.
“As COVID-19 continues to spread, the leadership team and I remain focused on three areas during these unprecedented times: protecting the safety of our employees, continuing to serve our customers in their critical time of need and preserving the strength of our businesses,” Culp says.
“Today, I am writing to you to give you an update on the latest steps we are taking to aggressively mitigate the impact of the pandemic, starting with GE Aviation.”
“The aviation industry is feeling the impact of this global pandemic most acutely. The rapid contraction of air travel has resulted in a significant reduction in demand as commercial airlines suspend routes and ground large percentages of their fleets.”
“As a result, GE Aviation is announcing several steps that, while painful, preserve our ability to adapt as the environment continues to evolve.”
GE Aviation announced the following plans which impacts its US population, while the business works with the appropriate parties to address its global workforce.
- GE Aviation is planning to reduce approximately 10% of its total US workforce.
- There will be a temporary lack of work impacting approximately 50% of its US maintenance, repair and overhaul employees for 90 days.
- These actions build on those the business already has taking, including a hiring freeze, the cancellation of the salaried merit increase, a dramatic reduction of all non-essential spending, and a significant decrease in its contingent workforce.
- Starting April 1, David Joyce, Vice-Chairman of GE and President and CEO of GE Aviation, will forgo half of his salary
“As David Joyce wrote in his note to GE Aviation employees earlier, “Our hardworking, determined employees are the heart of our business, and it is difficult to have to take these steps due to external factors like this. But we must respond immediately with every action within our control to protect our ability to serve our customers now and as the industry eventually recovers.”
“I feel the same way. That is why I will forgo my full salary for the remainder of 2020.”
“GE Aviation is not alone in the challenges it faces. Each GE business and Corporate will need to adjust. For example, GE Healthcare is managing through reduced demand for certain equipment as elective procedures are postponed or cancelled around the world.”
“At the same time, our GE Healthcare team is working heroically to increase manufacturing capacity and output of equipment – including CTs, ultrasound devices, mobile X-ray systems, patient monitors and ventilators – important in the diagnosis and treatment of COVID-19 patients.”
GE’s Chairman and CEO said that the company’s financial position is “sound”, and the closing of the BioPharma sale to Danaher will help the company solidify its financial position further.