General Electric Strengthens Commitment to Restructuring for 2016

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Researched by Industrial Info Resources (Sugar Land, Texas)--Power and Manufacturing giant General Electric Company (NYSE:GE) (Fairfield, Connecticut) plans to increase its restructuring budget to $3.4 billion for 2016, double the amount of $1.7 billion it targeted last month. The company reported total industrial segment profits of nearly $18 billion for the year 2015, a 1% increase compared to the year before.

Industrial Info is tracking 20 GE-related projects worth $1.18 billion, including the $700 million dollar project to install sulfur dioxide emission control equipment at the Homer City Generating Station in Pennsylvania. The project involves installation of Alstom NID dry flue-gas desulfurization scrubbers on generating units 1 and 2, which have a combined capacity of 1,320 megawatts (MW). The project kicked off in 2012 and is set for completion in second-quarter 2016. Kiewit Power Engineering, part of Kiewit Corporation (Omaha, Nebraska), is performing the construction.

Industrial Info is also tracking the $1 billion grassroot LEAP (Leading Edge Aviation Propulsion) jet engine plant in Lafayette, Indiana, which is due for completion in March this year.

According to Reuters, the company's restructuring plans include reducing overhead and decreasing product costs, improving plant efficiency and consolidating factory and service-center real estate.

The firm's plan to sell its appliance unit to China-based Haier Group for $5.4 billion will help fund the restructuring efforts.

"...with the Appliances transaction we're now looking at the ability to fund incremental restructuring," said GE chief executive officer Jeff Immelt. "In addition, this gives us upside to our disposition cash for the year."

Total industrial segment revenues for GE for 2015 stood at $119.6 billion, falling 1% from 2014. Total industrial segment revenues for the fourth quarter 2015 were $33.9 billion, down 2%.

The company acquired French engineering firm Alstom S.A. in November 2015 for $9.5 billion. The acquisition added $29 billion to GE's backlog, bringing the backlog up to $315 billion, a 7% increase the acquisition. Alstom also added China-based hydro businesses to the company as well as Hinkley Point nuclear steam turbine in the U.K.

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