GE's Ecomagination Is a Muddle

Executives are in general good at saying nothing, but GE has turned it into an art form.
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With revenue of $17 billion,

General Electric's

(GE) - Get Report

clean-tech business sounds like serious stuff.

Though if aircraft engines that pollute a bit less than they used to can be considered clean tech, the number suddenly makes a whole lot more sense.

"Green is kind of what you want it to be nowadays," says Bill Batcheller, chief investment officer of Tower Wealth Management in Cleveland, who manages several accounts that own GE shares.

Maybe that explains why Eric Butterfield, GE's head of technology, was the executive trotted out to speak on the company's behalf at the Deutsche Bank Alternative Energy/Clean Tech Conference last week, even though his title does not contain the words "eco" or "clean" in it. If everything GE does is clean, then the head of technology is, by default, the head of clean technology.

At any rate, Butterfield seems to have big responsibilities, so I attempted to wade through a transcript of the speech and question and answer session he gave, and above all what he says is, well, nothing.

Executives are in general good at saying nothing, but GE has turned it into an art form -- talking about what they're going to talk about, describing how some segment of GE is organized without ever providing a sense of how it fits into the whole, referring to meaningless acronyms and the like.

My favorite part of Butterfield's presentation was this: "It was a rallying cry for all our employees to get behind this vision and develop eco products to serve the marketplace. 'Green is Green.' It was a business strategy as well as an internal strategy." OK!

This clean-tech business, whatever it is exactly, aims to have revenue of $25 billion in 2010. In a report released at the end of May, GE CEO Jeff Immelt and Steve Fludder, vice president of Ecomagination, said they will "strive toward" that goal.

"The $25 billion is a stretch target, no question," Deutsche Bank analyst Nigel Coe told me in an email he sent via a bank spokeswoman, "It depends how quickly stimulus money reactivates key markets such as wind."

Butterfield also used the word "stretch" in talking about this goal, though his statement is so difficult to understand I had to email GE spokeswoman Anne Eisele to be sure it wasn't a typo. Here it is, according to the

Bloomberg

transcript:

"Like any good metric we set out a goal to get to $25 billion by 2010, we'll beat that this year. And like all good metrics once you achieve that we stretch that once again. So we're attempting to get to $25 billion by 2010 within that portfolio."

As I read it, they're already going to beat the 2010 goal of $25 billion, so now they're stretching again to a goal they're already beating?

Eisele got back to me. "I'm told what Eric intended to say was that the original goal was $20B by 2010, and that we increased the goal as we expected to exceed $20B by the end of this year," she wrote in an e-mail.

So now that we've sorted that out, why are they stretching?

"In this world it's a whole lot better to underpromise and overdeliver," Tower's Batcheller says.

GE bear Charles Ortel of Newport Value Partners questions the focus on revenue. "You can sell a car that cost you $15,000 for $10,000, and brag about the fact that you had $10,000 worth of revenues," he says.

Ortel is right, though GE is far from the only company you'll find doing that.

As for my contention that Butterfield said nothing, Eisele wrote that "we'd politely disagree."

"He provided plenty of details on key projects now underway. He also talked about GE's R&D organization, our innovation process with the GE businesses and how our research lab can uniquely spread technologies across our business portfolio to drive innovation."

Green is green, friends. Green is green.