the

Watch CNBC's full interview with General Electric CEO Larry Culp

earlier in the program to my point we

had Dave Calhoun of course the CEO

Boeing who joined us and he said Larry

it's gonna be perhaps three to five

years for them to get back to 2019

levels when you hear that how do you

have to adjust your business and do you

feel like you've already done it to

adjust for that new reality David good

morning thanks for having me on

I had an investor call earlier so I

missed the interview with Dave but we

speak frequently as we do with all of

our customers here I think what we said

on our call and I would repeat here is

that the first and most important step

we take as a company in the face of this

pandemic to make sure we come out on the

other side a better stronger genie is to

embrace the reality of what we're

singing and clearly the pressure is

going to be no greater in the short term

and maybe over the medium term for us

than it will be in aviation given the

airlines are trying to conserve cash

parking planes bringing flight schedules

down postponing in some cases orders of

new planes that that hits us and you saw

that in the first quarter numbers

numbers that we didn't particularly like

and acknowledged that are going to be

more challenging here in the second

quarter which is in turn why we doubled

the amount of cost actions that we're

taking in aviation up to a billion

dollars and cash actions up to two

billion

all the while broadening those same

efforts to a two billion dollar level on

the cost side across our company three

billion on the on the cash side David I

don't think you're are you not I don't

think you're ever done preparing or

reacting in a moment like this I don't

think we've taken a particular view as

to whether this is a two year or a three

or four year recovery we're mindful of

those conversations we just need to make

sure that we're taking the appropriate

actions here in the short term while

protecting all the things that over

decades the may GE aviation such as

strong

franchise in the commercial aerospace

industry and to that point when it comes

to liquidity where a lot of investors

but you can imagine or focus you end the

quarter with 47 billion dollars in cash

and you said on the call that's really

to cover capital long-term debt

maturities now through 2021 and actually

after the April actions you were down to

30 billion in maturities for 2022 I

believe is it going to be enough Larry

or do you need to do more well I think

with the closing of the biopharma

transaction the the 20 billion dollars

that we receive giving us that 47

billion

of liquidity at the end of the quarter

were well-positioned from a liquidity

perspective for what what we see in

front of us David we would never say

that that's all we need once and forever

right part of the reason we step back

from from offering a formal guide today

was there still I think a great deal of

uncertainty out there relative to the

economy at large how the pandemic

impacts our various businesses so we're

going to control what we can control

we're pleased to have that liquidity

position again the costs and cash

actions will help us a great deal here

in the short to medium term and we will

allow we'll play it forward from here

mindful that we want to make sure that

we continue to bring those leverage

levels down we're unlikely to hit the

targets we hit envision and very much

thought possible just just weeks ago but

make no mistake we are committed to

making sure that we bring down those

leverage levels in time yeah well Larry

you were about a year and a half into

what is a long term turnaround at GE one

that really just appeared to be gaining

momentum when the virus hit how then do

you sort of reset now to think about

again the long term opportunity that you

were trying to see is while you're still

dealing with life or death issues for

the company well you know in many

respects David having an 18-month

running start helps a great deal right

because we were already in the process

of improving and changing a good bit

about our company so I think we just get

up next day and embrace this reality we

wish there were otherwise

but this ultimately will allow us to

drive more change our new leaders will

assimilate more more quickly the people

we brought into the company the last

several months we're going to be able to

drive again more not only cost reduction

but more process improvement we talked

about cash actions we talked about

inventory talking about inventory we're

talking about accelerating the pace of

lean implementation in our in our

factories we can't move people around as

freely as we could before in our service

businesses it's going to require us to

use digital technologies we already are

more today than we were just a few

months ago so those are the sorts of

things when the dust settles David that

I think are going to show that we really

have positioned the company long-term

well through through the downturn while

at the same time we need to take some of

the actions that are perhaps are more

tactical to make sure we we work through

those near-term pressures Larry's Jim

tonight you do because this kind of job

like at this point but one thing that

also happened this quarter was that the

president seemed to be interested in a

company that really is chiefly a scanner

company all of us have had MRIs know

that you got to play the music because

it's loud but you make a lot of money

when they wanted the president want you

to make mint ventilators not your

strength but by the end of the quarter I

kind of felt like it was you became

ventilators are us pretty important we

are a proud ventilator manufacturer not

not our biggest business in as you

highlight but having been on the front

lines in health care really since Wuhan

we knew this was going to be an

opportunity for us to play a role not

only here in the US but really around

the world as the case count mounted so

we took our care stream unit doubled

production will double it again here by

the by

the end of the quarter all the while

tending to the rest of the business and

in addition we are working with with

Ford to bring on a lower cost unit at

higher volumes where we're handling a

good bit of the design they're handling

much of the supply chain so we're we're

pleased to to player roles probably a

small role in the grand scheme of things

but so much else is what we do is is

critical here we've seen our CT scanners

importantly deployed in these same

situations our patient monitors even

some of our digital monitoring solutions

have been been helpful in making sure

that the the caregivers who are so

challenged and doing such important work

here have the best tools possible at

their disposal one of the things that

I've found in this quarter is that we've

learned is that we outsource a lot of

things to other countries always with

the highest quality you're bringing back

some manufacturing to United States

aren't you

well our supply chains are in in flux

most times Jim is demand changes and and

the like but we tweak we have in a

number of instances brought back certain

operations to to the US yes aircraft

India dear I'm sorry Jim can you say

that again some parts from India to here

seem to be a trend I'm putting this out

there because yet we've we've taken our

future mortgaged it to a lot of

countries that I kind of liked but now

I'm not so sure they are necessary in

our best interest well I think ge will

always be a global company and as a

result we're going to be in most every

market around the world designing

building selling and servicing I'm I'm a

big believer in trade I think when we

get to the other side of this we may

have a different trade dynamic and that

will require that we have more of that

capability here in the US and that'll be

a transition over a number of years our

standards Jim in terms of safety in

terms of quality the world over are are

constant that's the way we want to run

our company

and that's the way we want to serve our

customers all around the world Larry

when we would typically bring you on for

an interview which we always appreciate

we might focus on power of course which

had been certainly one of the key areas

you were focused on in terms of the

turnaround at the company what are we

seeing right now given the dramatic fall

in energy prices and oil prices in

particular right now in terms of your

gas power equipment business your gas

power services and your overall overall

power portfolio David B the power

business particularly the gas power

business that you're asking about

continues I think a multi-year

turnaround though itself will see some

pressures here we we share it on the

call that by large we think we're going

to see from a turbine delivery

perspective another strong year in that

regard but I think that is the year

plays out just given some of the

financing pressure say here in the US

with the IPPS perhaps in Middle East

with certain customers we think demand

for new orders and thus down payments

could could be softer than we

anticipated we also saw in our service

business some challenges here as

customers didn't necessarily want to

have our service people on site and

where that was optional they rescheduled

some of those outages until the the

second half of this year when we have a

little bit more clarity as to Coba 19 we

certainly had challenges as well moving

our people around the world to perform

some of that work in addition to some of

the supply chain friction that we've

been working through so it was it was a

decent quarter another quarter of

progress it wasn't perfect but I'm

encouraged by what I see as much in the

financials as much as I see in the the

operating reviews we do with the

businesses that they're that they're on

their way but no GE business is really

immune David from some form of kovin

induced pressure here yeah

well aware which leads me to my next

question

which is your decision to cut capex how

do you get to the proper number at this

point in terms of what you need to cut

at the same time without injuring

perhaps your two your three down the

road in terms of your ability to grow

david be the current roll-up has this

reducing our capital spend year on year

about twenty five percent I wouldn't say

that's a final number we don't want to

spend one dollar more than we need to

this year all the while making sure we

don't shortchange the long term how do

you do that I think it actually started

back last summer when we went through

the the multi-day in-depth strategic

reviews we did with each of the

businesses right to make sure we have a

clear consensus as to where we're trying

to take the business in the intendent

decisions and commitments investments we

need to make with that that strategy in

mind so we come into a moment like this

rather than it being strictly a

financial exercise let's cut gap acts in

this business from X to Y we certainly

want to look for reductions we want to

apply as much discipline as we can but

all the while we want to make sure we

retain the context of the strategic

intent we have longer term for the

business so these are ultimately

judgment calls one by one but I really

think we set the stage for better

decision making last summer

of course not knowing we would be in

this environment today Larry what

happened in Grand Forks North Dakota did

you have your employees wearing masks

did they do any temperature check what

the heck happened and I need to know

what were you protecting those employees

correctly because I do believe that

without masks and without temperature

checks we could have something as

disastrous as this happen many times

yeah we're out Jim what would happen at

our renewable energy wind turbine blade

facility in North Dakota is really

disappointing we had a we had an

outbreak there the the site has been

closed for for two weeks we've been

working with the the team on the ground

working

with the governor everybody's been very

supportive we had our standard PPE and

procedures in place we're still

investigating the root cause of what

happened to the the team members there

who have been impacted or infected with

the with the virus but make no mistake

safety is the highest priority we have

at GE and from the time people enter our

sites temperature checks PPE physical

distancing at all and the rest that very

much is the way we have been operating

in the facilities that have been up and

running through this this period and is

certainly the construct in the minds

that we have later this year as we look

to bring back those that who have been

working from home you know on that note

Larry to end how do you view the new

world in terms of working and working

together I mean do people who put

together a jet engine have to remain six

feet apart how are you viewing the

return to work for many of your

employees when that day comes

well David it will be a challenge in a

thousand different ways right as we we

rethink the way work is performed in a

factory at a job site in an office but

again safety will be the the overarching

priority here and I think we're going to

take it step by step trying to leverage

the experience we have from most

facilities be it and North Dakota those

in China relative to best practice let

alone all of the the help and input

we're going to get from local state and

and and and federal regulators so it'll

be a step-by-step process working with

with everyone we possibly can to do this

effectively and well to make sure that

that folks aren't only safe but that

they they have in that psychological

comfort as well very important to us as

we look forward to the rest of 2020 yeah

as we all look forward to perhaps a

different day coming as soon as possible

Larry thank you as always for joining

very much appreciate it David Jim thank

you

you