Jeff Immelt, CEO of General Electric (GE), is taking a significant gamble on digital factories, despite shareholders’ scepticism. Immelt is investing billions into this concept, which involves equipping machines with sensors and using analytics to optimise performance. He believes this will help GE outperform rivals and increase profits. However, shareholders are concerned that the investment is too risky, as the payoff is uncertain and could take years. The digital strategy has already cost $4bn, and while GE’s digital revenue rose 20% to $4bn in 2016, it only represents a small fraction of the company’s total revenue. Immelt’s strategy also includes scaling back GE’s finance arm and divesting $260bn of capital assets. Immelt’s future at GE is uncertain, with a potential successor, John Flannery, already in place.
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