Arcam AB fka AMAVF

[Tom Joad]

re: If similar decisions are made at GE Additive ...

It's always good to watch the changes that new leadership brings but that means using statements of probability.

The tricky part is that GE Additive doesn't oversee completely mature or industrialized technology yet, but it is technology that has the promise in increasing worker productivity in a robust and meaningful way for the first time in decades.

I'm going to assume that Flannery knows that productivity gains are promising and GE is invested in additive to the point that backing out entirely is counterproductive. So, he'll look for ways to increase profit in that division in the near term to fund longer term needs. He's most familiar with healthcare, and demographic trends favor orthopedic implants, so he'll prioritize implant manufacturing. Many additive parts in aerospace have been developed and approved or well on the way to approval, so aerospace additive manufacturing is secure at current levels.

On the other hand, I suspect that he'll look for ways to cut or not increase funding to aerospace research. Since a lot is already known about laser and electron beam production, and the mechanical properties they're obtaining, he'll want to make automation of additive production a priority for products in the civilian market. He'll try to find military contracts for research and production that assist GE in keeping their technology moat rather than funding research as they have recently. I haven't looked at company statements on this matter though, how much they spend on research.

There's rumors about Desktop Metal playing a part in all of this. I haven't looked into them yet, I just doubt, after reading so much of Arcam's research, that they have something to offer that should hold GE's interest.

Desktop Metal

I've seen similar things occur before where I've been employed. New management comes in that puts a priority on short-term gains. Everyone is focused on near term results so much that they're constantly surprised by new developments. I think of that as tactical thinking, not strategic thinking. It's tactical to ask how much profit GE Additive generated in the last quarter, it's strategic to ask how one develops a technology that promises gains in productivity and quality. The tactical question doesn't provide focus, the strategic question reflects GE's return to focus on their original mission statement, to develop and manufacture new technologies.

Valueline's statement is that GE management just went through a shakeup, however, their analysis shows GE to be a good investment. Apparently Warren Buffett no longer thinks GE is a good investment but for reasons I don't care so much about, that is, it appears he believes GE's sale of its financial division wasn't wise. Again, what is counterproductive about focusing on what you've done best for so long, the development and manufacture of new technologies?

"Meanwhile, Buffett feels bullish on a business that GE recently got rid of — he acquired $521 million in shares of Synchrony Financial, the provider of private-label credit cards that GE owned for 80 years before spinning it off in 2015."

Warren Buffett dropped GE and signaled the end of an era