General Electric's (GE) Presents at Deutsche Bank 2016 Global Industrials and Materials Summit Conference
General Electric Company (NYSE:GE)
Deutsche Bank 2016 Global Industrials and Materials Summit Conference
June 9, 2016 10:20 AM ET
Jamie Miller - Senior Vice President, President and Chief Executive Officer of GE Transportation
John Inch - Deutsche Bank
All right. It gives me great pleasure to introduce Jamie Miller. She's SVP and CEO of GE Transportation. And in the audience, familiar to everyone, is JoAnna Morris. JoAnna is my favorite company person in the world and I love her to death. And I really - my spirit picks up every time I see her at these events. And I missed EPG; that was absolutely deliberate. That thing is a complete boondoggle that says absolutely nothing.
This is where you get the real scoop and the real insight. And you know what? Ever since I've been a little kid I always wanted - I had a train set. You have the best job in the world, I have to say. This is awesome. So listen, this is a really - this is not a talking head presentation. This is an interesting dive into an important business for GE.
And with that, let me introduce Jamie.
Thank you, John. JoAnna is our favorite too. So, glad to have her here. Listen, today I thought what I could do is talk a little bit about the Transportation business at GE and maybe importantly give you a little bit of a deep dive into the Digital business that we have within transportation and how we really see that affecting our future, but most importantly affecting today.
GE Transportation is a 100-year old business within GE we've got about 10,000 global employees, multiple manufacturing sites, headquartered right here in Chicago so we’re excited to be here with you today. And in 2015 we had about $6 billion of revenues, even though it's 100-year old business I would tell you that the transformation we're seeing inside Transportation right now is really exciting.
I think what you'll see as we talk through this is that the digital impact across multiple sectors is very real and it is really changing how we work and how we work with our customers and I'll talk a little bit more about that later.
Our products pretty straightforward as John mentioned the core of our business is all around the locomotive. About $5 billion of revenues in locomotive, parts, services in 2015 and then taking those adjacent technologies or I should say technologies into adjacent spaces. So wheels and propulsion in mining, marine, stationary and drill and then our growing Digital Solutions business as well.
In 2015, I think one of the most interesting things about our business was our Tier 4 product launch and many of you may have heard that you know the Tier 4 locomotive that we launched in 2015. We built more than 425 of those in 2015 we have about 600 out on the rail running today, Tier 4 was really a new emission standard that required more than 70% emissions reduction in diesel locomotives and really significant particulate matter reduction as well.
Products performing very well you could see here around [2 fly] which is really a measure of quality in the rail industry and we’re very, very focused on making sure that as this launch continues. We focus on reliability and availability for our customers really continuing to deliver a quality product.
I think the nice thing here too is we have invested heavily not only in the technology, but in ensuring that we deliver it at a good cost to our shareholders. The product margin really has been on parity roughly with legacy product, which I think is a very healthy thing, but again here just very focused on delivering.
Just a little bit on the market environment and I know that you know we live in a slow growth and sometimes choppy world. In the North American rail sector, you can see 2015 carloads down slightly I would say 2016 you continue to see that decline happening largely driven this year by the mix shift happening in the coal sector, 31% decline for our customer’s year-to-date in 2016 with coal. Some of that's driven by low oil prices. Some of that's driven you know in a very secular way by the shift away from coal.