Let’s just say Larry Culp has a mild difference of opinion with some of his big-company peers.
The CEO of General Electric on Oct. 26 said he wouldn’t go on the record, as a few other leaders have said of late, as saying that the kinks in the global supply chain peaked in August or September. Asked about his view of the market on the heels of GE’s third-quarter earnings report, Culp said dealing with today’s challenges “really is akin to playing Whac-A-Mole.”
“I’ve talked to some of those CEOs. Some of those CEOs are friends of mine,” Culp said. “I’m not sure we’re yet in a place where we would say that things are stable.”
The issue, Culp added, isn’t that certain specific elements of the supply chain are particularly hung up. It’s more that new headaches and question marks surface as others recede, making the current environment the most challenging he has seen in his career.
“We may have lines of sight, we may have improvements in one commodity or one line of business,” he said. “But almost without fail, the next day, a commodity, a supplier, a logistics provider that we thought was good for the next six weeks or the next six months offers up a revision to that outlook […] It just seems like every day, there’s new news to balance.”
On their conference call with analysts and investors, both Culp and CFO Carolina Dybeck Happe lauded the teams across GE’s business units for how they’re handling the various crunches. GE, they said, is improving its efficiency and pushing through some price increases to offset the rising costs of doing business.
“It really is a tactical, muscular endeavor right now that we’re working our way through,” Culp said. “We’ll work our way through it. Things will level out over time. While it’s more challenging in the short term, we’ll be better for it in the medium or long term.”
On his team’s call, Culp also suggested GE will become more active on the mergers-and-acquisitions front as it completes the combination of its capital aviation services business with AerCap Holdings N.V. as well as the $1.45 billion purchase of BK Medical. The latter deal, Culp said, is “admittedly small but strategic” and will build up GE’s ultrasound business.
“That’s what we should be doing more of “ to go with organic growth and efficiency initiatives, Culp said.