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GE to increase margins for 3 percent planned profit increase by 2009

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GE is looking to ramp up its operating margin throughout its various manufacturing processes in order to boost operating profit. On the one hand this is a 'no duh' sort of press release. What company isn't trying to make its manufacturing process cheaper so that it can ask the same price and make more profit on each item?

But in order to stay on top GE is looking to take its 15% operating profit and boost that a percentage point each year to 18% by 2009. To do that it is focusing on increasing margins in places like its locomotive plants. Right now a train engine takes about a month to build, and GE wants it to take ten days.

Although investors will no doubt applaud this focus on the margin and faster production terms, one hopes that a manufacturer of jet engines that keep our planes aloft does not lose sight of the longer term picture. Some of us will remain happy with GE focusing on quality in some areas rather than increased margins.

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Last updated: November 27, 2009: 05:59 AM

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