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Good morning.
There’s a new book out this week on the collapse of General Electric by two Wall Street Journal reporters, Thomas Gryta and Ted Mann. (Their Amazon page says the book is already the “#1 Best Seller in Industrial Manufacturing” –which made me wonder what #2 is!) The Journal included an excerpt from the story here this weekend, that focused on the company’s ill-fated effort to champion the “industrial internet” through GE Digital and its Predix software.
I interviewed then-CEO Jeff Immelt about the effort back in 2016, and found, as always, his articulation of the strategy to be compelling. He had lived through the disruption of the media business–GE then owned NBC Universal–by Facebook, Google, Apple, Amazon, and he didn’t want the same thing to happen to his industrial businesses. “If you think about it, 15%, almost 20%, of the S&P 500 are consumer Internet companies, and the existing consumer companies in those areas–media, retail, consumer banking–got none of that,” he said. “I was able to see that. And I passionately believe that if you are an industrial company, you can’t allow that to happen.”
But articulating a good idea and turning it into a good business are different things. On the second point, GE seems to have failed–mastering the marketing more than the software and money making. (Although my favorite piece of trivia from the book excerpt was a marketing fail: Top GE executives couldn’t agree at launch whether to pronounce the new product “Preed-dix” or “predicts.”)
Immelt proclaimed in 2015 that GE would be a “top 10 software company by 2020.” But that goal has been abandoned by his successors. Today, the company focuses the digital business on its own product lines, and no longer discloses financial results. CEO Larry Culp said earlier this year the digital business “was getting close to break-even.”
I haven’t read the book yet. But if you are looking for a magazine-length take on GE’s fall, I still think Geoffrey Colvin’s 2018 piece– “What the Hell Happened at GE?”–is the best. You can read it here.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Strike for Black Lives
Today is the Strike for Black Lives, a protest organized by unions (here's United Farm Workers of America president Teresa Romero on her union's reason for getting involved.) But what's the protest all about? As Fortune's Jonathan Vanian explains, the strike is intended to highlight the economic plight of service workers, many of whom are people of color, during the coronavirus pandemic. And McDonald's is a major target. Fortune
EBay classifieds
EBay is reportedly in "advanced talks" to sell its classified ads business, in order to focus on its core marketplace business. The prospective buyer is Norway's Adevinta, which already deals in classifieds but would gain a much stronger foothold in Germany if it controlled the eBay Kleinanzeigen website (other eBay-owned classified-ads sites around the world include Gumtree and Kijiji.) Wall Street Journal
European stimulus
The marathon talks among EU leaders, who need to agree the terms of a massive stimulus package to help the bloc recover from the pandemic, are reportedly close to a resolution. The so-called "frugals"–the Netherlands, Austria, Denmark and Sweden–are said to be willing to accept $450 billion of the recovery fund coming in the form of grants rather than loans. The talks will continue this afternoon. Bloomberg
Vaccine signup
The U.K. has signed an agreement to purchase 30 million doses of a potential COVID-19 vaccine developed by Pfizer and Germany's BioNTech. Preliminary testing data suggested positive results and the vaccine will soon be tested on 30,000 volunteers–it's one of 23 currently being evaluated. Germany, France, Italy and the Netherlands have already signed up for 400 million doses of a potential AstraZeneca vaccine. Financial Times
AROUND THE WATER COOLER
Russian vaccine
One reason it takes so long to develop a vaccine is testing–you don't want to be prematurely rolling out an experimental vaccine whose side-effects only become apparent after rigorous tests. Which makes it quite astonishing to read that many members of Russia's business and political elite have since April been getting shots developed by the state-run Gamaleya Institute in Moscow. The vaccine's phase 1 trial only wrapped up last week, and the results are not yet known. Bloomberg
Uighur allegations
Disquiet over alleged human rights abuses in China's Xinjiang province continue to grow. Confronted with drone footage of blindfolded minority Uighurs being led to trains there, Chinese ambassador to Britain Liu Xiaoming said he did not know what the video was showing. He also denied that China is carrying out widespread sterilization of Uighur women, as is reported to be the case. The U.K.'s shadow foreign secretary, Lisa Nandy, fears there is an ongoing genocide of the Muslim Uighurs. Guardian
Voters' stamps
The latest battleground in the upcoming U.S. election: Will postage be required for absentee ballot applications and the ballots, who will pay for it, and what happens to envelopes without stamps? Lawsuits are already flying, with voting-rights groups saying stamps are equivalent to an unconstitutional poll tax. Fortune
Chinese cinemas
China's cinemas–at least, those in "low-risk" areas, covering most of the country–can reopen their doors as of today. Restrictions include a 30% capacity cap and a halving of the number of movies each cinema can display. Everyone will have to wear masks, and movie-goers will have their temperature taken when they show up. Also, in a blow to a traditional revenue stream, no food or drink will be sold. BBC
This edition of CEO Daily was edited by David Meyer.
