Showing posts with label featured. Show all posts
Showing posts with label featured. Show all posts
Biden Looks to Step Up Federal Disaster Aid for Texas
No commentsFriday, February 19, 2021
Jeff Immelt on the Humbling of GE
No commentsIn the summer of 2001, weeks before Jeff Immelt became CEO of General Electric, he was playing golf with friends at a country club near Chicago when a club member asked him what he did. “I work for GE, ” Mr. Immelt replied, omitting his title. “Ah, GE! Jack Welch !” the man said. “I feel sorry for the poor son of a bitch who’s taking his place.”
The late Jack Welch was indeed a tough act to follow. The man dubbed the “manager of the century” by Fortune magazine quintupled the company’s revenues and increased shareholder returns 70-fold during his tenure from 1981 to 2001. At its 2000 peak, GE’s market capitalization soared to $600 billion.
Twenty years on, GE is a husk of its former self. The nearly 130-year-old conglomerate has shed some $500 billion in value and almost half its global workforce. Its profits have plunged, its stock has tumbled, and it recently paid $200 million to settle with the Securities and Exchange Commission over claims that it misled investors. GE has sold off many of its businesses, and it has cut its dividend to a token penny a share—a stunning fall for a one-time market leader in everything from lightbulbs to jet engines. Many point fingers at Mr. Immelt, 65, who led the company for 16 years until he was nudged out in 2017.
Mr. Immelt (right) and General Electric CEO Jack Welch (left) during a news conference in New York City, Nov. 27, 2000.
PHOTO: SHAWN BALDWIN/BLOOMBERG NEWS“It became clear right away that my main role would be Person to Blame,” Mr. Immelt writes in his new book “Hot Seat: What I Learned Leading a Great American Company,” which will be published Feb. 23. While he admits he made mistakes, he says he felt moved to write about his years at GE’s helm to highlight the often-dire context of his decisions. “I dealt with bad news almost every day,” Mr. Immelt says over Zoom from his home on Kiawah Island, off the coast of South Carolina.
Despite Mr. Welch’s hallowed legacy, Mr. Immelt says that many of GE’s problems were inherited. “I’d become CEO of a company where perception didn’t equal reality,” he writes. GE’s shares were overvalued, high returns from its pension funds inflated earnings, and the company relied too heavily on its financial division, GE Capital, which contributed nearly half the firm’s earnings in 2001 by loading up on debt and becoming overleveraged in the insurance business.
Mr. Immelt says he knew GE Capital’s prominence was a problem, but it never seemed like the right time to curtail the company’s “only engine of growth.” By offering essentially all the services of a bank (consumer lending, auto loans, insurance, subprime mortgages), GE Capital grew almost twice as fast as the company as a whole. GE’s industrial business gave the company an AAA rating, which allowed GE Capital to borrow money cheaply and increased the margins of its financial investments.
Mr. Immelt argues that GE needed these funds to help support its industrial businesses, which he says had suffered from a lack of investment and innovation on Mr. Welch’s watch. But Mr. Immelt says that failing to wean the company off GE Capital’s cash early on was probably his biggest mistake. “We basically decided to try to grow them both simultaneously,” he says of the company’s financial and industrial businesses. “By the financial crisis, that didn’t look so smart.”
The 2008 crisis dealt an existential blow to GE, which had become the largest nonbank finance company in the world, with some $545 billion in debt. It took years and the backing of the Federal Reserve to stabilize the firm after its financial profits cratered. (A self-described stress-eater, Mr. Immelt “could squeeze into” only one of his suits at the time.) By the time Mr. Immelt finally sold off most of GE Capital in 2015, the damage was largely done.
‘I wish I had experienced more different things to be better prepared for the world I saw.’
Mr. Immelt’s first Monday in the top job was Sept. 10, 2001. Al Qaeda’s terrorist attacks the next day “marked the end of an era,” he says. Having joined GE in 1982, after studying math at Dartmouth and business at Harvard, Mr. Immelt rose through the ranks during a largely “tranquil” time when China was a sleeping giant and the U.S. economy expanded at a reliably impressive rate. The world he inherited as CEO, however, was “raucous, volatile and unpredictable,” full of bursting bubbles (dot-com, housing, power), disruptive rivals and increased scrutiny. “I wish I had experienced more different things to be better prepared for the world I saw,” he says.
Yet some of the problems that hobbled Mr. Immelt’s GE were self-inflicted. Critics say that he often bought businesses at too high a price and sold others at a loss. He could be extravagant, traveling overseas with a spare corporate jet, and he made some costly bets that never paid off, such as spending billions on a digital strategy in the industrial-services market that the company has largely dismantled. (Mr. Immelt points to “dozens of disrupters” that are now targeting this market as evidence of his prescience.) He also spent more than $24 billion in 2016 and 2017 buying back stock, only for the price to fall.
He has earned criticism for not getting GE completely out of the insurance business. Although the company seemed to shed its risky portfolio in the mid-2000s, in 2018 GE disclosed that it had just written off more than $6 billion for its long-term-care insurance and would need another $15 billion over seven years. Mr. Immelt says that he had to keep these holdings to sell off the others. He now sees that it would have been better to dump these remnants at any price.
Alstom CEO Patrick Kron (left) stands with Mr. Immelt (center) and Steve Bolze (right), chief executive officer of General Electric’s power and water unit, against the backdrop of a turbine unit inside the manufacturing facilities of an Alstom plant, Belfort, France, June 24, 2014.
PHOTO: SIMON DAWSON/BLOOMBERG NEWSMr. Immelt’s biggest deal has often been called his worst. GE spent more than $10 billion in 2015 to buy Alstom, a French company that makes trains, power turbines and generators, but the move proved costly and ill-timed. GE essentially invested in carbon-fueled energy equipment just as that market was cooling, and time-consuming regulations and concessions stripped the deal of much of its value. Mr. Immelt defends the strategy behind the deal and says that the board reviewed the acquisition at least 12 times. He places much of the blame on Steve Bolze, who ran GE Power before he left for Blackstone in 2017, for failing to capitalize on the acquisition. Leaving Mr. Bolze in his job at GE “is something I’ll always regret,” Mr. Immelt writes. Mr. Bolze says that Mr. Immelt’s “narrative simply doesn’t align with the facts…While no deal is ever perfect, I remain proud of the GE Power team and its record executing in a tough and ever-changing environment.”
Mr. Immelt says that he relied on “GE’s system of internal checks and balances.” Some insiders have complained that Mr. Immelt prized optimism and suppressed dissent, preferring “success theater” to rigorous accountability. As both CEO and chairman, he also had some control over who sat on GE’s board. But Mr. Immelt says that he surrounded himself with people he trusted to be honest and regularly invited executives to his home to pick their brains. Looking back, he says that he wishes he had said “I don’t know” more often: “There’s a certain sense of vulnerability to saying I haven’t figured this out yet. But there are a few times when that would’ve served me better.”
Running a company is “a lonely job,” Mr. Immelt found. As a lecturer at Stanford’s business school and a partner at a Bay Area venture-capital firm, he now regularly warns young entrepreneurs that there is no playbook for success. But he feels a responsibility to impart what he sees as the core lessons from his time at GE: When you have a tailwind, don’t get arrogant; and when you have a headwind, don’t give up.
Some Covid-19 Vaccines Are Effective After One Dose, Can Be Stored in Normal Freezers, Data Show
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n a win for global vaccination goals, BioNTech-Pfizer vaccine is shown to generate strong response with one dose and to maintain potency in standard freezers for two weeks
A nurse preparing a shot of Covid-19 vaccine in Jerusalem earlier this month.
PHOTO: ABIR SULTAN/SHUTTERSTOCKEfforts to vaccinate the world’s population against Covid-19 got a boost Friday after research showed that some vaccines provide strong, one-dose protection, and that one of the vaccines can now be stored in normal freezers instead of ultra-cold ones.
The vaccine developed by Pfizer Inc. and BioNTech SE generates robust immunity after one dose, according to new research out of Israel, and further data showed that the University of Oxford and AstraZeneca PLC vaccine similarly prevented Covid-19 when doses were spaced three months apart.
The findings could boost arguments in favor of delaying the second dose of the two-shot vaccine, as the U.K. has done. They could also have substantial implications on vaccine policy and distribution around the world, simplifying the logistics of distribution.
Pfizer and BioNTech said they have asked U.S. regulators to allow their vaccine to be stored and transported at temperatures consistent with standard freezing, around minus 20 Celsius, following successful internal stability testing. Similar filings were being prepared in other countries.
Should Pfizer’s request be granted by regulators, it would mean its vaccine would vastly expand access in rural regions around the world, as well as pharmacies and physician offices, according to industry experts and officials.
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The label change would allow the shots to be kept essentially wherever providers have normal freezers, which would make it much easier to handle and potentially accessible to poorer countries with no access to ultracold distribution and storage equipment. Pfizer’s vaccine would also be able to return to ultracold temperatures after standard temperatures.
“This is excellent news and it will greatly improve the vaccine rollout,” said Ivan Dikic, director of the Institute of Biochemistry II at Goethe University Frankfurt. “The improved protocol will be much easier to handle for both rich and developing countries around the world.”
Pfizer plans to request a label change from the European Medicines Agency, too. If EMA grants the request, the EU rollout could accelerate. EMA didn’t respond to a request to comment Friday. Germany’s Robert Koch Institute, the disease control agency that includes a vaccination advisory panel, said in a statement that it would revisit its guidelines as new data emerge.
The requirement for ultra-cold storage of the shots has been a major obstacle for some providers and local health departments, prompting them in recent months to purchase special equipment. The restrictions have also contributed to the glacial pace of Europe’s vaccine rollout, making it complicated for the vaccine to be administered in general surgeries and nursing homes.
Doses were wasted early on in the rollout as local authorities failed to adhere to the strict handling rules. In the German state of Bavaria, 2,000 doses were discarded due to exposure to higher temperatures.
In the U.S., retail chains such as CVS Health Corp. and grocers, major health systems and other providers have some ultracold freezers, but many communities don’t have them.
PFIZER’S VACCINE
Experts say the change could help with storage as supply increases and as more vaccination sites become available for the general public to visit. Neighborhood pharmacies and physician offices that might otherwise have been left out could administer the vaccine more easily.
“It does definitely increase the number of sites,” said Moncef Slaoui, the former chief adviser to Operation Warp Speed, the Trump administration’s Covid-19 response program, in an interview Friday. “Most immunization sites would have a minus 20 freezer like everybody has at home.”
Challenges remain, vaccine experts say, because Pfizer’s vaccine will continue to be shipped in its specialized boxes that can carry as many as 975 vials, making handling difficult for small sites such as doctor’s offices and pharmacies that may not need many doses.
Rival vaccines are still easier to store. Moderna Inc.’s vaccine can be stored at standard freezer temperatures for up to six months and remain refrigerated for up to 30 days. Johnson & Johnson’s vaccine, which U.S. regulators are weighing authorizing and which has been shown to safely protect against Covid-19, can be kept in normal freezers for up to two years, with at least three months in the fridge.
The findings regarding single-dose effectiveness are likely to renew debate over whether dosing schedules should be adjusted amid limited vaccine supply.
In research published Friday in the Lancet medical journal, one dose of Pfizer’s vaccine was shown to be 85% effective in preventing symptomatic disease 15 to 28 days after being given, according to a peer-reviewed observational study of about 9,000 people conducted by the Israeli government-owned Sheba Medical Center.
Pfizer and BioNTech have said the second dose should be given three weeks later, the schedule that was used in its late-stage study that found the vaccine to be 95% protective. They also have said they haven’t studied alternative dose schedules, but that changes should be up to health authorities.
The U.K. delayed a second dose by up to 12 weeks so it could use limited supplies to deliver a single dose to more people. Almost one-third of the U.K.’s adult population has now received at least one shot. Parts of Canada and Europe have implemented similar measures, though many countries including the U.S. haven’t done so.
The Israeli findings came from real-world data about the effect of the vaccine gathered outside of clinical trials in one of the leading nations in immunization against the coronavirus pandemic. Israel has given the first shot to nearly half of its 9.3 million citizens.
The authors noted, however, that the findings don’t justify changing dose schedules, and that more follow-up to assess long-term effectiveness of a single dose is needed before deciding to delay second doses.
“This is the first study assessing effectiveness of a single vaccine dose in real-life conditions and shows early effectiveness, even before the second dose was administered,” said Eyal Leshem, director of Sheba’s Center for Travel Medicine and Tropical Diseases and one of the authors of the study.
The results might differ from others because the subjects were largely younger and healthier, said Gili Regev-Yochay, another of the authors. She also said the study couldn’t confirm how long protection from one shot would last, as most of the subjects received a second shot.
Also Friday, in the Lancet, the vaccine co-developed by the University of Oxford and AstraZeneca was shown to be 81% effective at preventing symptomatic Covid-19 when doses were spaced 12 weeks apart, compared with 55% spaced six weeks or less, according to results of a peer-reviewed study. Researchers also reported two doses of the vaccine were shown to potentially reduce cases by 50%—a number that scientists said is lower because it included people with and without symptoms. The vaccine’s effect on curbing asymptomatic cases is lower, they said.
Friday’s study updated data published this month that hadn’t yet been reviewed by independent researchers.
Pfizer’s late-stage, 44,000-person study found a two-dose regimen to be 95% effective at protecting against symptomatic Covid-19. The study found the vaccine to be more than 52% effective after one shot but didn’t specify further before the second dose is given.
During the period when the data for the Israeli study were gathered, a coronavirus variant that was first detected in the U.K. and is considered more contagious than the original pathogen made up more than 81% of confirmed infections. The data amount to strong evidence that the vaccine is highly effective against a mutation that has forced European governments to prolong lockdowns.
Ugur Sahin, the co-founder of BioNTech, told The Wall Street Journal in December that next-generation Covid-19 shots would probably consist of one dose.
“This groundbreaking research supports the British government’s decision to begin inoculating its citizens with a single dose of the vaccine,” said Arnon Afek, Sheba’s deputy director general.
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