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The house that Jack built: (From top to bottom) Past and present: Former chairman Jack Welch, credited as the modern day father of GE and his successor Jeff Immelt, who four days into his reign experienced a US$600m loss due to the events surrounding 9/11. Product power: Giant aeroplane turbines, a shoe scanner prototype and wind power turbines in the US.

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How GE makes its global billions.

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Globalist: Jeff Immelt says regional mega co-investment deals with government bodies are imminent.

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So you’ve interviewed my friend Steve Forbes, I hear?” asks the 50 year-old six-foot four-inch tall former Ivy League American football player Jeffrey Immelt, taking a giant gulp of his favourite fizzy drink, Diet Coke. A split second after I respond, Immelt hits back with a barrage of questions. “I’m the one supposed to be asking you,” I reply, with a gang of GE’s executive team present in the room, including Nabil Habayeb, CEO for the Middle East, laughing at the chairman and chief executive's rapid-fire enthusiasm.

Well-known for his extra sharp wit, when Immelt speaks it is not just his senior team that listen, the whole of corporate America, let alone the rest of Big Business worldwide takes note. In fact just before we meet, Immelt is granted an audience with HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, a regular date on his calendar, he explains.

“I’ve seen him every time I’ve been here and it’s always good to touch base and see his expectations for the region,” says Immelt nonchalantly, discussing meeting royalty as it were an everyday occurrence.

“Everything [Sheikh Mohammed] has said over the last few times I’ve been here he’s delivered on. He’s very serious about business, is aggressive, fast moving and always thinking. The wheels are always turning.

And it’s great to watch because he sees economic growth as being good for more than just the numbers and good socially. Countries like that are always good to invest in and once you invest in them that relationship continues for years.”

GE stands as the seventh largest company in the US, and 11th in the world, behind several oil and automobile giants, with 2006 revenues of US$163.4bn and US$500bn of financial assets to play with. GE prides itself on its ability to react to any market trends or changes due to its gargantuan size and resources. It sets the global agenda, and people spend in line with its expectations.

The company’s ninth CEO in its 126-year old history has fearlessly steered the good ship GE through some rough waters since he took over six years ago on September 7, 2001, four days before the terror attacks that changed the world. “Three things happened more or less at the same time,” he says, explaining how he felt the full force of a trio of disastrous and unexpected events.

“First came 9/11, then Enron and then the end of the dotcom bubble in the US. I grew up fast, you know.” The events of September 11 alone left him with two dead employees, a US$600m hit to GE’s insurance business, a dramatic slowdown in the company’s aircraft engine operations, and huge uncertainty in an already weak economy.

The 9/11 crisis was then quickly followed up by anthrax attacks at GE-owned television network NBC, while accounting scandals at former energy giant Enron Corporation and Tyco International saw Enron implode (GE later purchased its lucrative wind business that Immelt calls “probably the best deal we’ve ever done”), and investor trust in most US corporations slide to its lowest ever point.

After having spent 18 months being groomed as the great Jack Welch’s successor he had some big shoes to fill and a great deal of convincing to do in a very short space of time. Welch had led the company from revenues of just under US$30bn in 1981 to US$130bn in 2000, and from a market value of US$14bn to one in excess of US$410bn at the end of 2004, making it both the most valuable and largest company in the world at that time. It was then commonly known as “The house that Jack built".

“This was undoubtedly the toughest time of my career,” he says rapidly reaching for his Diet Coke comforter. Most would have caved in at this point but Immelt battled through, albeit with some suggesting he has visibly aged more than most execs of his years. He refused to give up the seat he had worked so hard for in his 22 years at the same company his father had remained loyal to for so long.

He says he had no choice but to look forwards and attempt to claw back some positives from a series of colossally catastrophic events. “In some ways it gave me an opportunity to run the company in a different way; to be more transparent, more focused on the customer. All the things I wanted to do we were able to do over that time period.”

“Corporations change, not just in the US, but everywhere around the world, and those three events have helped reshape corporate society today. The day I took office,” he says, forgetting for a second that he’s not quite running for the Oval Office yet, “I mean took the job, no one thought about Sarbanes-Oxley, no one thought about having shareholders vote on CEO compensation, the whole world is completely different.

My shareholder meetings have been a thrill a minute, you should be in one of them,” he adds. In the five years since “things have been a little easier,” he explains. And they have. Regular earnings gains have meant that Immelt has consistently hit both the numbers year on year and delivered high profit growth.

But GE is a constantly evolving creature, not just in the technology it develops or acquires, but also in the way it is run.

Immelt tells me that the company’s biggest modern day strategic challenge is how the business continually strives to drive growth. “You’ve got to constantly make size an advantage, take risks to leverage your scale, and never let it be a disadvantage,” he emphasises.

The answer is entering and developing emerging markets, the “biggest growth factor for Big Business over the next decade”, Immelt predicts, with China, India and the Middle East at the heart of the debate. “My philosophy of globalisation is that if you want to make money in a region, you have to learn how to make money for a region.”

The chairman is a huge advocate of globalisation, wanting to spread the business to as many parts of the world as possible. But with that another challenge on his long ‘to-do’ list is how to carry this out in a company where just over 50% of both its employees and its business interests are from outside the safe ground of the United States.

“I’m not sure I can say yes right now,” he says, responding to the possibility of an Arab national one day running GE, “but doors will be opening to have a non-US citizen potentially running the company. I think globalising the company is key. In other words, we’re an American company but for the first time in 2006 the company is now 50/50 outside of the US, and the part outside the US is growing faster than the one in it, so planting flags and moving people and capability — those are fun challenges.”

Immelt doesn’t have much time for the “big meetings” such as the World Economic Forum’s annual Davos gathering and says these “get-togethers” find it tough to turn thought into action, however he views the “promotion of globalisation as an economic principal” as “crucial.

GE is a truly global business and has a significant footprint in over 100 countries. Immelt explains that his “globalist” vision is to concentrate on emerging markets — including rapidly increasing its own — as well as its partnership activities in the Middle East.

“Over the last five years our total investment stands at over US$100m across the region. Compared to the other emerging markets it’s less than China and India but more than any place else,” he adds in his strong south-western Cincinnati twang. This investment is going to dramatically leap, explains Immelt, particularly as Middle Eastern governments begin to think of environmental factors, and further into the future, alternative sources of energy. Mubadala, the Abu Dhabi government’s investment arm, for example, has announced plans to open a US$350m 500MW solar power plant by 2009. “If you look at this region, take desalination or water reuse, there’s going to be some of the most advanced technology in the world over the next 10 years, where the ideas will be transported to the rest of the world.”

GE has built a financial and regional centre in Dubai and Immelt says that it plans to hire over 100 engineers over the next two or three years who will design products for oil and gas services or water re-use technology, for example.

“Maybe then we’re looking at a day when we work with Dubai International Capital (DIC) to co-invest and go into another country in the region with them, and build a capability that’s 50% General Electric and 50% DIC. Those are all out there, those are imminent.”

Immelt adds that some of the biggest business stars are emerging from the Middle East and that the younger generation is both rapidly and sensibly transforming the massive wealth the region has into sustainable development.

“The most significant opportunity and challenge is turning massive wealth created from one single commodity into sustainable wealth that exists regardless of the price of oil. That didn’t happen 25 years ago. The difference is I see a young generation of Arab leaders who connect the dots and who can compete with anyone in the world and it’s exciting to see how they’re developing.

“We have a big role to play and it’s up to us to come in and play it. GE can do two things here. Our technologies help make the oil infrastructure more productive, and we can also help teach management practices and open up a window on the world that didn’t previously exist.”

Despite the large majority of the world viewing GE as the inventors of the lightbulb (by founder Thomas Edison in 1876), it does more in the Middle East than many people think. People’s perception of the business, however doesn’t concern Immelt. “I don’t think naturally they know what we do. Nobody here in the Middle East knows we have a US$48bn global real estate portfolio, they think we’re a lighting company but knowledge grows over time. We have some consumer franchises but we’re primarily a business-to-business company so knowledge moves slower.

“Hospitals will know what we do but the basic person on the street may not know that we have a US$16bn healthcare business. The right people know but more broadly it takes us a while to get the message out, it’ll always be that way. We’re not on billboards like Samsung and because they make TVs and cellphones, we don’t make those, we make turbines. People don’t walk down the street thinking ‘that makes that turbine?’” he says laughing, and his other executives following suit. GE’s primary sectors are in infrastructure, consumer finance, healthcare, industry and entertainment, but within those five categories it spreads far and wide into every sector you can dream of. Within infrastructure, for example, it is dominant in technology, water, rail, energy, aviation, transportation and construction. Immelt says it would not take part in the Dubai Metro project, for example, and instead concentrate on heavyweight industries such as commercial rail and freight, even hinting that it might have a big project in Saudi Arabia in the future.

“I look at all of them and don’t just have one area of expertise. I’m a jack of all trades and have to be. I’ve spent a lot of time in the company and worked in three of four businesses in a more detailed way. We have a very formal operating mechanism to allow me to learn the businesses.

“Look, I’m never going to build or design a jet engine, but I know enough to be able to pick the right people that are going to go do it, or help them make the right investment decisions.”

Immelt cites his worst decisions as moving too slowly to sell off GE’s plastics and insurance businesses, but with billions of dollars of GE investment waiting to be poured into the region over the next decade, this will surely never be a mistake he is likely to repeat.

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