Good morning, everyone. Thanks so much for coming. Thank you. Thanks again for coming. This is an amazing facility, obviously. I hope you got a chance to see that. I'd just like to say, on behalf of the board and the management team, I'm pleased to welcome you to the 2018 annual meeting of GE shareowners. I'm John Flannery, the chairman and CEO. I want to thank you, and I hope you got a chance to see this incredible facility. This is really the future of manufacturing in many ways. We're inventing a whole new business for ourselves in additive manufacturing and how we use it in the company. It's more commonly known as 3D printing.
I'd like to start first by introducing the GE board of directors who are with us here today. I'll ask the directors to stand briefly as I introduce them so you can see who they are. Sébastien Bazin, chairman and CEO of Accor SA, director since 2016. Jeff Bornstein, CEO of Generation Capital, a director since 2009. Jeff is the chairman of our audit committee. Jack Brennan, chairman emeritus of Vanguard, a director since 2012. Jack's our lead director and chair of the Management Development and Compensation Committee. Frank D'Souza is CEO of Cognizant Technology Solutions, a director since 2013. Ed Garden is the chief investment officer and co-founder of Trian Fund Management. Ed's been a director since 2017. Risa Lavizzo-Mourey, former president and CEO of the Robert Wood Johnson Foundation, a director since 2017, Risa's the chair of our Governance and Public Affairs Committee.
Jim Mulva, former chair and CEO of ConocoPhillips, a director since 2008, Jim is the chair of our Finance and Capital Allocation Committee. Lastly, Jim Tisch, the president and CEO of Loews, Jim's been a director since 2010. We also have three new director nominees who will join the board after today's meeting. I'd like to introduce them as well, starting first with Larry Culp, who's the former president and CEO of Danaher. Tom Horton is the former chairman and CEO of American Airlines. Leslie Seidman is the former chairman of the Financial Accounting Standards Board. I'd also like to acknowledge eight directors of ours who are not standing for re-election and thank them for their service. Andrea Jung, Shelly Lazarus, Susan Hockfield, Marijn Dekkers, Mary Schapiro, Jim Rohr, Peter Henry, and Steve Mollenkopf.
You'll note that we're nominating a much smaller board this year. It was really based on a decision made by the board after its own self-assessment and also a lot of input from our investors. I'd like to report on the operations and give you just a few minutes of an update on the company. Before we talk more about the transformative work we're doing across GE, I'd like to address some of the questions that I know and thoughts that are probably on your mind today. Behind me, you can see the relevant numbers for 2017. Beyond the numbers, I know that the questions that are foremost on your mind, in hindsight, what is our assessment of 2017? How are we holding people accountable? What are we going to do to fix the underlying issues and position GE's business for success in the years ahead?
I just want to assure you, I've spent countless hours asking myself these same questions. 2017 has been immensely disappointing to those of us on the board, to the GE leadership team, to our employees across the business, and I know it has been very much so for all of you in this room. I'd start first with just a quick assessment of 2017 as we move forward, I think just a moment on that. While a majority of our businesses really had a very good year in 2017, the power and the oil and gas markets were in difficult cycles for us. Our operating rigor and execution should have been better. In the end, we were slow to recognize some of the market developments in our power business, in particular.
The net effect, in the end, was a substantial drop in our earnings, in the cash flow of the company, and we also had to take a large charge in a run-off insurance business in GE Capital. As a result of those developments, we had to reduce the dividend of the company, and we made significant cost and job reductions across all of the businesses in general. I can't underscore, in the role I'm in, how tough those decisions are and really how seriously we take them as a management team, as a board. We're keenly aware of the pain that our performance has caused and the dividend cut has caused with investors, with retirees, with families. We know how much you rely on this, and these were decisions taken really with extreme deliberation.
At the end of the day, as we look at it, for the company to succeed in the long run, we have to make sure that we have a competitive cost position, that our businesses are positioned competitively, and that we have a capital allocation model that's balanced in light of all the factors. That's a look at 2017. Secondly is how have we held people accountable. That's the natural question to come up in these circumstances. I'd say we've made important changes at all levels of the company, really to hold our teams accountable to all of you for the performance. I'd start at every level. At the board level, we've reduced the size of the board, as I mentioned earlier. We've added new members with key background and experience. We've realigned our committee oversight.
We've created a new finance and capital allocation committee, really to help focus on how we're investing across the company, where the money's going, how we drive returns for shareholders. Substantial changes at the board level. We also made very substantial changes in the senior leadership of the company, both at the GE level, at my level, and also inside the GE Power business. The senior leaders of the company directly felt the effect of our performance in 2017 in their wallets, in the form of no bonuses, and as we should have. That's what we deserved for 2017. I think moving forward, which is most important and most on my mind, is how do we fix the businesses, improve the performance, and move forward with a plan to have them flourish? The most impactful thing we can do right now is just that.
How do we make GE simpler and stronger and move ahead? I assure you, we will not let up on this until the job is completed here. I'll walk through more in a minute, a little bit of detail on that. First of all, I just want to come back is the philosophy of. I strongly feel we have very good businesses that need to be the center of gravity of the company going forward. The way we're going to run the company really built around the business strength. We're making a lot of our resourcing and our portfolio decisions to make sure that those businesses can lead and flourish in the industries that they're in. We're dramatically reducing, and you saw this in some of our numbers, our structural costs, increasing our visibility, executing on cash, running the company for cash.
I'd say importantly to our team, making the culture more open, more transparent, more connected amongst the team. I'm confident that these changes, in the long term, are going to help the performance of the company substantially. It's a lot of change. Change is not easy in any organization. In a large organization, we have 126-year history, but we've been through this before. We understand how to evolve when we need to, and that's really what you're seeing in the company right now. I'm confident. A lot of heavy lifting going on right now, but the company's going to be stronger as we come out of this phase. I'd really especially like to just thank our employees, our customers, our shareowners, and our retirees for supporting the company during this time period. It's deeply felt and appreciated.
We take our responsibility to all of you very seriously, really, our focus in 2018 is to earn back your trust in our performance on your behalf. Let me walk you through in a little more detail what we're doing to build a stronger company and really focus on the businesses for the future. I mentioned first just running the company in a different way, in a way that we think can get better results. We're constantly assessing what our strategy is inside the business units. We're in the middle of a very detailed three-year forward look at the businesses and their strategic positioning. Much more, I'd say, detail and rigor around what's going on in the markets, what's our position, what's our competitive capability, and really, we'll be presenting that to the board as we complete.
A deep strategic look at the businesses so we know where we want to head in each one of those. We're continuing to operate the Power business in a much leaner way. Russ Stokes is here with us today. A lot of progress on that. We will continue to update you on that in 2018. Big reductions in structure, big reductions in manufacturing footprint. These are ultimately going to convert into better cash conversion and better cash flow in the business, and really expanding the product and service margins. We know there's a lot of opportunity for us to do that, especially in our installed base. It's a business that produces a third of the world's electricity. There's a lot of room for us to improve the performance in that business. I'd say we had our first quarter earnings release on Friday.
We're already seeing some, what we call green shoots in that report last week, including in the Power business. Significant reductions in structural cost and a lot of improvement in our ability to see our installed base and get more revenue and margin out of our installed base. Power is in a tough time, but still fundamentally a very strong franchise built on high tech industry. It leads the industry from a technology perspective. There's a big shift going on in this industry, really from a traditional centralized model to a decentralized model, decarbonized model, and digital distribution of electricity. We've got a lot of tools and weapons to play in that. Good operating improvement overall, and especially in the Power business, is what we expect in 2018. Next, I'd say leadership is always a significant topic to work on.
We've got a number of new leaders in place, and those leaders are operating with very different and new incentive structures. In the first quarter, we filled a number of key leadership positions, appointing a new general counsel. You'll meet Mike Holston in a moment here. New leaders in Power, in services, in supply chain, in the main gas Power product system. We also have a new compensation system in place. You've seen us talk about this maybe in a number of other venues. For the top 4,000 employees, got a system that we think gets much, much better alignment between the management and the investors. It's centered much less on cash compensation, much more on stock performance compensation, and it's a simple, quantifiable basis where there's really 2 metrics, cash and earnings per share.
I think we've got a management team that's changing and a management framework and compensation framework that's very consistent with what your interests would be. Lastly, I'd say we're getting back to back to basics approach just on running the business more efficiently. I went through this on last Friday's earnings call. I'm personally going to lead a development of an implementation, a new GE operating system built really on core principles around lean, on agile, on Six Sigma, things that we've had good strength on in the past, we think we can leverage again. Just making sure that it's a mindset of continuous improvement every day, every week, every quarter, we get a little bit better in things like our operating performance, our employees and training, our customer experience.
We're going to be much more rigorous, in every aspect, and in particular on our talent management and making sure that employees are evaluated in the right way, groomed in the right way, developed in the right way, and that you'll reap the dividends of that. We're going to apply that at the corporate level, which is now in Boston. We also expect to apply this in the large, what we call tier 1 business levels as well, our Aviation business, Power, HealthCare, et cetera, the big ones. We're very confident this is going to have a twin benefit. That it's going to yield substantial incremental cost savings above what we've been working with so far. Most importantly, I think, just a simpler, leaner, cleaner, business-centric, high-performance company. I'm quite excited about what we can do in some very basic elements here.
If you move to the right side of the page, I'll just go through this, what we're doing on portfolio positioning. Last fall, we announced we'd start narrowing the focus of the company really to three key segments where we thought we had the most effect. That's our GE Power business, our GE Aerospace business, our GE HealthCare business. We also spoke of disposing of about $20 billion of assets outside of that realm, really over the next one to two years. We're making progress on that target. There's discussions underway on all those assets and also announced transactions in industrial solutions and value-based care. We expect progress to continue there and have proceeds at the company level in 2018 of about $5 billion-$10 billion.
Additionally, earlier this year, we laid out a framework to reduce the assets of GE Capital by about $15 billion over the next two years. GE Capital's assets dropped about $2 billion in the first quarter. Some of that's seasonal, but also included a sale of a portfolio for about half a billion dollars. We're on the right track there. We continue to review and evolve our thought process regarding the best structure and the structures for the company. As I mentioned earlier, the main way I'm thinking about this is really, these are great franchises, run them extremely well, back to basics. We think in a certain way of, what is the best way for these businesses to flourish five, 10, 20, 40 years from now? What's the best environment for them to do that? I'd say in sum, that we're moving.
I've been about nine months in a row, speed, purpose, and how we improve our operations, how we deliver for the customers, for our employees. When we're doing those two things, we know we'll deliver for investors. We have a lot to work on. When you look around here and at the quality of the businesses, we have a lot to work with. I'm confident. I have tremendous belief in the company. I've been here almost 31 years. When I see the work we do around the world, when I see our amazing employees, dedicated employees, I'm highly confident in the future of our businesses and the company. I want to take just a few minutes longer to walk through the strength of a couple of examples of our franchises and really the technology that fuels them.
At the end of the day, this is the bedrock of most of our businesses. Company leads, really, if you go across our portfolio, transformational technologies, it drives productivity, it improves quality of life all around the world. As I said earlier, today, one-third of the world's power comes from a GE installed base. Every two seconds, an aircraft takes off under GE engine power. The GE HealthCare business has the largest installed base in the world. These are very formidable assets. Our teams, I think taking that technology and that installed base, they really dedicate themselves day in, day out, around customer outcome. What is the customer looking for? They're looking for cleaner energy, cheaper energy, more flights per day, more precise diagnoses, better treatment for, and clinical outcomes in the GE HealthCare business. That's what customers are looking for.
When I say we have a lot to work with, you look at the underlying franchise. I'm talking about the strength of those businesses, the purpose of those businesses, the mission of those businesses, and really the technological dominance of those business units. I want to just give you two quick examples of that. LEAP and the GE9X engine. We're leading in aviation, in a big way with CFM's LEAP engine. You can see one here in the back today. I hope you got a chance to see it on the way in, if not, on the way out. I defy anyone to tell me that that engine is not a thing of great beauty. Congratulations to the aviation team. It's also the best-in-class engine by far in terms of utilization, in terms of emission, in terms of acoustics.
We have 14,000 orders for those engines already, and that business line really just getting going. The connection to this facility and the LEAP engine, it includes 3D-printed fuel nozzles and other parts that are made from ceramic composites. This has been the technology, invention, and innovation, and investment in this business. Those things allow lower weight, higher performance 15% more fuel efficient, this engine, than its predecessor engine that we had in CFM. This is a huge difference in the aviation industry. Still about 20% of the cost of an airline is the fuel. Getting a 15% efficiency bump is tremendous. We're looking forward to 2020 and beyond, where we have the GE9X engine. We're going to deliver world-class reliability and performance compared to peers. This is a massive engine that's going to be powering Boeing's next generation 777X passenger jet.
It also is going to feature 3D-printed parts, new ceramic composites. Same effect will happen here, better performance, lower weight, better fuel efficiency. Tremendous performance there. Reservoir, GE's Reservoir. The ability to store power at scale is probably the most disruptive force in the energy business today. This is a rapidly transforming industry, and storage is a key pacer of how that will unfold. Our Reservoir solution, which we launched in the last couple of months, provides very flexible, very modular energy storage. The challenge has always been scale. This is a grid-scale battery, and it provides a customized solution, really, allowing customers to manage any type of energy output, whether it's from their wind farms, thermal, solar. It has a broad application with our customers.
Just as you look at one of these, for the non-scientists amongst us, which would include me, each one of these is enough to power about 120 homes for a day or recharge a typical electric car about 50 times. You can stack these together and get a broader solution if that's what you need. Tremendous advancement in storage, and GE's a leader in that. On the healthcare side, the Senographe Pristina is a product I had a good chance to witness when I was in this business in the last three years. To get at this product development, we partnered with radiologists, technologists, but most importantly, with patients to create a 3D mammography experience that is really designed to deliver much, much superior accuracy for the detection of breast cancer. One of the big challenges here is getting screening accomplished.
About 40% of the women in Europe, about 30% of the women in the U.S. don't go for screening because afraid of the examination, these are the quotes we get back. Afraid of the pain they might feel, afraid of the results, afraid of getting cancer. This is a big thing for us to overcome with our customers and patients. Really to help reduce the fear and the uncertainty that comes with mammography screening, a team in GE HealthCare listened deeply to the customers, used those insights, really, to shape the product, the design of the product, and ultimately what the overall patient experience was. The feedback on this has been tremendous in terms of its clinical performance, but also the patient experience. The net effect is obviously more people getting screened, more people understanding their health conditions, and better outcomes for the patients.
Our location for this meeting today, as I mentioned earlier, a direct nod to our thoughts on advanced manufacturing. Teams that work in this facility and for GE Additive around the world, they're really on the front line of innovation at GE. Not only creating more advanced designs, lighter, less expensive, fewer parts, but they're really creating highly skilled jobs for the future. We do a lot of partnering here and in other places with universities, with trade schools, and local organizations in the community. This is going to be a big source of job growth and skilled job growth now. I'd like to pass off to our Additive business leader, Jason Oliver. I stalked Jason for months to get him to join the company.
We're very excited to have him here, and I'd like to turn it over to Jason Oliver, and I'll come back to wrap up. Thanks.
Hello. My name's Jason Oliver. I lead the GE Additive business, and I want to welcome everyone to our Customer Experience Center here in Pittsburgh. This site opened in April of 2016 and to serve as an enabler to all of the GE businesses, helping them to accelerate the adoption of additive manufacturing and 3D printing. In May 2017, we transitioned the facility to the new GE Additive business, which is now more than 1,000 employees strong. The facility still serves as a key support to GE businesses, but we've now expanded its focus to help our external customers as well. We host, at this facility, as many as 10 customer visits a week. We also do training sessions and allow them to view production. As you can see, it's a big facility. It's over 125,000 sq ft. We run 6 different types of additive manufacturing technology.
We have more than 25 different printing machines and a variety of post-processing equipment and testing equipment. It really is a world-class facility, and we're glad you get to see it firsthand here today. For those that might not be aware, additive manufacturing and 3D printing is changing the way companies make products and the way they do business. It's already disrupting industries like aerospace, medical, automotive, and even energy. There are amazing opportunities to design new products using additives, with benefits including lower cost, lighter and stronger products, product performance improvements, more functionality, longer life, and increased durability. The transformational benefit of additive manufacturing allows customers to also achieve improvements in quality, efficiency, performance of manufacturing operations, decreases in inventory costs, and increases in build cycles. Hopefully, you saw some of the great examples of our additive products as you toured the facility today.
GE's new Catalyst prototype engine. Additive allowed our GE Aerospace designers to combine 855 separate parts down to just 12 parts. What, you might ask. Well, it allowed us to reduce weight on the engine by 5% and helped improve fuel burn, excuse me, by 20%. That's huge for an operator in aviation. We have some great additive examples in our Power and HealthCare businesses, too, and we have great customers in areas like medical. A company like Stryker that makes medical implants. In the dental industry as well, in Glidewell. In aviation, in companies like Oerlikon. We're excited about what Additive is doing to improve GE and our customers. At GE Additive, we love being on the leading edge and being thought leaders in this space. We're so excited about a future where engineers and designers will be thinking about 3D in 3D.
Thank you very much.
You can tell we're excited about this, I think with good reason, if you get a chance to have a look around. I'd just wrap up in saying, back where we started. We're deeply focused on running every asset, every business that we have in the company, in a much more productive and effective manner. I'd say, in summary, it's a back-to-basics story on cost, on cash, on capital allocation, on people, on project execution. We just have to run and improve our performance. On the screen behind you see our EPS and free cash flow guidance for the year, the same as we shared on our earnings call last week. Our capital earnings will be a bit lower due to the portfolio actions that we're taking there. Aviation and HealthCare, really well-positioned to perform this year.
Again, the Power markets, we expect to continue to be challenging, but that we can manage that business with Russ Stokes and the team in a very aggressive way, and they're doing a nice job doing that right now. We're targeting free cash flow of $6 billion-$7 billion for the year. Ultimately, at the end of the day, our objectives are to run the businesses well, make the portfolio stronger, simpler, and continue to work as hard as we can to earn back your trust and to deliver for you. That's the purpose of the company and the team working at the company, at the end of the day, is to produce that. I'd like to ask now Jamie Miller, who's our CFO.
Jamie started in November, shortly after I did, and Michael Holston, who joined us recently as our General Counsel, to come on stage, and we'll move forth to discuss the matters set out in the proxy statement. Hope I'm not causing too much reflection for you out in the crowd there. We'll start with agenda item number 3, the voting matters. I'm advised that the meeting is properly convened, that we have a quorum, and that the proposed resolutions presented in the proxy statement are filed as part of these proceedings. We've received proxies representing a majority of the outstanding shares eligible to vote, and the Management Proxy Committee has voted those shares in accordance with the shareowner wishes. The independent inspectors of election are representatives of IVS Associates, and the inspectors have taken the oath of office required by law.
If you've already voted by proxy, there's no need to vote by ballot today unless you would like to change your vote. You'll find a ballot on your seat. We'll take up the election of directors and the management proposals first. There'll be an opportunity for discussion of these topics. We'll move on to the shareowner proposals and have a chance to discuss those. There'll be time later in the meeting for general discussion of other matters. First we'll address the items that are in the proxy statement. The first of those is the election of directors. I place before the meeting to serve as directors for the coming year, the 12 individuals whose backgrounds and qualifications are described in more detail in the proxy statement. The second matter is say on pay. The next item is the proposal to approve our named executives' compensation.
Your board of directors recommends a vote for the approval of our named executives' compensation. The next matter is the approval of GE International Employee Stock Purchase Plan. The next item is a request to approve an amended International Employee Stock Purchase Plan, which allows eligible employees outside the U.S. to purchase GE stock through payroll deductions and receive a matching contribution of shares from the company. This is an important program for encouraging non-U.S. employees to acquire an ownership interest of the company and provides alignment with shareowners. Your board of directors recommends a vote for the proposal. The last up for the management proposals is ratification of KPMG as independent auditors for 2018. We have with us today, Lynne Doughtie, Chairman and CEO of KPMG, and Larry Bradley, KPMG's Lead Audit Partner for the GE Audit.
Your board of directors recommends a vote for the ratification of KPMG as independent auditors for 2018. Those are the management proposals. If you'd like to speak about any of those specific proposals, you can go to one of the aisle microphones, and we can call on you from there. Please give your name when you speak. Microphone one, please.
Good morning. Good morning, fellow shareowners. My name is Bill Freeda, and I am here today to vote my shares for our new Chairman and CEO, John Flannery. I do this because Chairman Flannery deserves our support and the opportunity to get this ship back on course. Achieving that will not be an easy task. Despite my support for Chairman Flannery, I will be voting against Jack Brennan, Jeff Bornstein, Francisco D'Souza, James Mulva, and James Tisch. All of whom have been members of our board of directors long enough for me to believe that they are part of the problem, not the solution. It is my opinion that the responsibility for our company's current precarious situation must be shared among the board of directors, Jeff Immelt, GE's other named executive during Mr. Immelt's tenure, and Jack Welch. Why, you may ask, do I include Jack Welch?
I have it on good authority that Mr. Welch believed that one of the most important jobs a CEO has is to choose his successor. Need I say more? To be fair to Mr. Immelt, events occurred while he was chairman and CEO that were beyond his control and had an adverse effect on our company and its stock price. 9/11 and the 2008 financial debacle were certainly not Jeff Immelt's fault, but GE was not the only corporation affected by these events. The difference was that Mr. Immelt did not have the answers to overcome these obstacles.
In the hit Broadway musical, "Sweet Charity," Gwen Verdon sang one of the more familiar songs from the show, "If They Could See Me Now." I would like to take the liberty of changing the title of that song to "If They Could See Us Now." The they I refer to are the people who founded, built, and led our company as it became one of the most successful and admired corporations in this country's history. What would they think of what has transpired at GE in the last decade and a half? Dividends being cut twice, stock prices plummeting, promises broken to tens of thousands of GE employees and retirees, millions of dollars in legal fees spent defending the morally indefensible act of terminating GE's post-65 retiree healthcare without examining options to reduce that cost, and perhaps the worst transgression of all, ignoring GE's long-admired integrity policy.
Naively, many long-term loyal GE employees and retirees actually believed in that policy, even as Jeff Immelt and our board of directors made a mockery of it, and in the process, made retirees the scapegoats for GE's downward spiral. It wasn't retirees who have led GE to where we are today. I believe it was arrogance and a series of bad business decisions, perhaps caused by that arrogance. It is inexplicable to me how Mr. Immelt could preside over the termination of GE's post-65 retiree medical benefits, negatively impacting the lives of many in the GE family, some of whom have been retired for decades, while at the same time, treating himself to travel on luxury corporate jets. The most tone-deaf act of all, requiring the presence of an empty backup corporate jet on some of his overseas trips.
In light of that revelation, we, the shareowners, should wonder, were there other similar business abuses that occurred during Mr. Immelt's tenure? It is time for our board of directors, which clearly has been AWOL, to step up and do the right thing. Moreover, today, I am asking our board of directors to order an independent audit to determine what other questionable practices may have been allowed to continue during Mr. Immelt's tenure as business as usual. In view of the fact that Mr. Immelt has left GE, I ask that his supplementary pension payments be suspended. That is the portion of his pension not paid by the GE pension trust, but directly by the shareowners, as well as any other benefits he may have been granted by our board of directors upon his exit, until this audit is completed and a report submitted to shareowners.
I would ask the GE board of directors to investigate any and all legal options to claw back any of the bonuses, stock options, or any other performance-related compensation that Mr. Immelt and the other named executives may have received. Fellow shareowners, it should be clear by now those performance-related payments should never have been granted. We, the shareowners, many of us retirees, deserve transparency and honest answers. In conclusion, I would ask Mr. Flannery to form a volunteer retiree advisory council consisting of represented and non-represented retirees from various GE businesses. The purpose of this council would be to provide GE management and our board of directors with perspective and guidance as it pertains to GE retirees and the issues that affect their lives. Thank you.
Bill, thank you very much for your comments. As I said at the outset, we are disappointed in our performance in 2017. With respect to the board, we have made substantial changes, and I'm highly confident we have the right board for the company going forward and the right mix of skills and people for the task at hand. I'd say with respect to, in general, the comments, it's important, I think, for all of us to distinguish between performance outcomes and misconduct. I think we have in the proxy what the company policy is with respect to this. This is something that the board would always be reviewing, and they'll always evaluate the information as it comes up. If there was ever evidence of serious misconduct, the board would take the appropriate steps there.
That's a matter that we've laid out in the proxy. Microphone two, please.
Good morning, fellow stockholders. It's amazing. A long time ago, we used to be called stockholders. Now we're called shareholders. Anyway, my name's Ron Flowers, the president of the Retirees Association of General Electric. One year before you were born, Mr. Flannery, I walked into the General Electric company in Erie, Pennsylvania, and started my career with this company. Spent 37 years here, and a couple observations. I agree with Bill about who you should vote for and who you shouldn't vote for these people this year. Back in the early 1970s, I was a union officer. General Electric came to us, and they said, "We have this new modular locomotive that we want to build, and we have a good idea that we can really do this." Well, we set out to do it, and we had to change the locomotive processes.
We had to change the buildings. We had to change everything. 10 years later, we saw the difference. In 1970, we had 15% of the locomotive market. 1980, we had 80% of the locomotive market. We did the job, and we did the job by the workers going into the shop every single day, making the product, buying a couple shares, making a product, buying a couple shares. I call these prime shareholders because you get a double benefit out of us. The prime shareholders go in there every day, and they make the product, and they make a good product. We showed how good a product we made, and you benefit for it, and we bought a couple shares of stock. Now, this was $8, $10 an hour, so we weren't buying a whole lot of stock every week.
Over a period of time, it added up. Well, lo and behold, I look around, and here's hundreds of thousands of prime shareholders that are now called GE retirees. This is what I want to talk to the board about because you have a responsibility to the company, and you have a responsibility that made the foundation of this company that you're standing on. We built the company. We put it where it is today, and I understand there were some bad decisions, but they weren't on locomotives. We're still number one in the world. It wasn't on a whole lot of other products across the country because all over the country, people going to work and building the product and buying the stock.
A couple years ago, the prime shareholders got the royal screwing, and some of these board of directors were in that decision, where they decided to take away the insurance for the retirees, the people that went into work every day and built the product and bought the stock. This one decision made by the board caused retirees to all of a sudden have to take up to $5,000 out of their pockets to pay for medical bills. My own father-in-law, in the first four months of that change, went from 500 and some dollars a year to hitting the donut hole by March. This isn't an unusual thing. The retirees and the people that work with them on a continuing basis, we see it every single day. The board of directors made that decision, and it was a terrible decision for the shareholders.
Now we find out that this may not go past the end of this year or the middle of next year. I implore the board this year, don't think financially, think morally also. These are the people that did it for you over the years. These are your retirees. These are the prime shareholders. In your information, it says the ultimate purpose for our work is the children in distant villages who get access to electricity, better diagnosis, and treatments in the moments that matter most. Your prime shareholders/retirees are spending more and more time in those moments that matter the most, and it's not something that is going to go away. Contrary to popular belief, we're all going to die. Before we die, if we're lucky, we die quick. If we're not lucky, we can be totally wiped out because of the medical costs.
Mr. Board of Directors, Mrs. Board of Directors, please think before you make a decision this time. Thank you.
Thank you, Ron, for your comments, and we are deeply appreciative of the prime shareholders and what they've contributed to the company. We are always taking a number of factors into consideration, and I thank you for your comments. We'll go back to microphone 1.
My name is Dennis Rocheleau. It's always a pleasure to speak after Bill Freeda and Ron Flowers. It makes me look mild-mannered. I want to applaud you, Chairman Flannery, for reducing the size of the board. I think it was sensible and necessary. I welcome the new board members. I'm impressed by their qualifications. I wish them well, not only for themselves, but for us. I want to make a personal shout-out to departing Director Lazarus. I didn't agree with all that the board did in the past. I probably won't agree with all that they do in the future. Ms. Lazarus, throughout her tenure, was professional, personal, and accessible, and I thank her for her service, and I wish her well. Secondly, I'm speaking to the issue of KPMG. Amongst the many things I'm not, I'm not a financial expert.
I'd like to blame the whole mess on the accounting, the lack of reinsurance reserves, the subprime mortgage debacle, the restatement of earnings. I'd like to blame it all on Bornstein, I don't know that I can do that. I would be delighted to hear from KPMG something about an equitable rebate of some portion of their fees rather than a reflexive reappointment to their current status. That's probably not going to happen. I think that kind of dialogue and that kind of defense of their performance would be instructive to this audience. Thank you very much.
Thank you for your remarks, Dennis Rocheleau. Now, let's move to the shareowner proposals. Six shareowner proposals that are listed in the agenda. To be sure that all the proponents have an opportunity to present their proposals today, we ask that the presenters focus their comments during this portion of the meeting to the proposals being presented. We'll have some time after that, all the shareholder proposals have been presented for a discussion of these proposals. I believe Patricia Zerega is here today to present proposal number one.
Thank you, Mr. Chairman. Shareholders request our board of directors adopt a policy and amend our governing documents as necessary to require that the chair of the board of directors, whenever possible, be an independent member of the board. The board would have discretion to phase in this policy for the next chief executive officer transition implemented, so it does not violate any existing agreement. If the board determines that a chair who was independent when selected is no longer independent, the board shall select a new chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as chair. This proposal requests that all necessary steps be taken to accomplish the above.
Caterpillar is an example of a company that recently named an independent board chairman after opposing a shareholder proposal for an independent board chairman at its 2016 annual meeting. Wells Fargo also reversed itself and named an independent board chairman in 2016. Please vote to enhance shareholder oversight of the GE chief executive officer during this challenging time for GE on voting independent board chairman, proposal one.
Thank you, Pat. I believe that Martin Harangozo is here today to present proposal number two.
Thank you, Mr. Flannery. Good morning. Again, my name is Martin Harangozo. I am grateful to be a shareholder. I love this company, people, and products. I have owned GE stock for most of my life. I have worked for General Electric more than 2 decades. My pension and savings are tied to this company's performance. I cannot think of a more honorable shareholder. Cumulative voting is recommended by Warren Buffett's mentor, the late Benjamin Graham. Nazi concentration camp survivor, Evelyn Davis, placed this proposal on our proxy many times in previous years. I am honored to stand on the shoulders of great minds and great people in presenting this cumulative voting proposal. Cumulative voting gives shareholders a larger voice in electing directors. I share your optimism and faith for GE. There are wonderful turnaround situations that give hope and guidance. My favorite is among the world's most valuable corporation, Apple Computer.
I also liked the Chrysler Corporation back in the '80s. Yet given that many companies fail and GE performed terrible in an economic paradise, I find a woodshed discussion in order. In more than 20 years of employment, I have seen the stock grow more than tenfold, I have seen the stock fall more than tenfold. What changed? My observation is GE transitioned from an honest company to a dishonest company. In 1990, my boss asked me to write down clear goals that he and I both signed. We worked together to achieve these goals. In 2010, my boss, Matthew Johnson, contradicted long-established engineering procedures, bringing harm and risk to customers. Matthew Johnson lied under oath regarding objectives designed to reward shareholders.
Appearances indicate Matthew Johnson counted income for the year 2010 for parts not sold until 2011, the identical practice that brought fines to General Electric from the Securities and Exchange Commission. I have his email right here in my hand. When I questioned Matthew Johnson regarding his accounting, Matthew Johnson decided in the space of about a month to terminate me. 21 years, no notice, no package, no severance, the harshest retaliation possible. GE corporate executives processed my concerns and termination such that they were printed on the internet in violation of the spirit and letter agreement promising confidentiality and prohibiting retaliation. This is interesting for two reasons. First, GE proactively broke its promise of confidentiality and retaliation. Secondly, GE was warned that its accounting was not sustainable, as I call this accounting practice a Ponzi scheme. GE was warned five years ago the accounting was bad.
You can read it on the internet by googling my name. I have the website printed for those interested back on the table and on my person. At the 2013 meeting of shareholders, I brought the slogan, "GE works for me, debt-free." Immelt laughed at this slogan. He no longer works for GE, you expressed deep disappointment regarding the $15 billion charge. Apple Computer valuation exploded after Steve Jobs announced Apple was debt-free. Lee Iacocca at Chrysler with pride paid off his debt to the government before it was due. Mr. Flannery, in your more than 30 years at GE, did you see anything at all that looked suspicious causing a half trillion of valuation to disappear? You did not say anything at the shareholder meeting, as I would have heard it.
What professional with integrity watches Americans lose over a half a trillion in valuation and not say anything at the shareholder meeting? It's simple and disturbing. You make less money if you do the right thing. I was vocal regarding nonsense accounting as early as 2004. My general manager, Tom Lazaro, asked if I was going to grab the microphone at the shareholder meeting. Seven years later, Matthew Johnson, who repeatedly violated written procedures and used dishonesty, relieved me of my employee responsibilities, freeing me up to work for General Electric as a shareholder. A critical characteristic of Apple and Chrysler is that they were turned around by a leader who was fired. As most companies eventually fail, a turnaround is best accomplished by someone who cannot help but to do the right thing and has no desire for head nodding, rear end kissing, or fear of termination.
In summary, I recommend we get honest, remove debt, and promote the profit. Shareholders, if you cannot embrace a shareholder who cried wolf and was spot on in terms of concern for financial strength, you deserve to lose your money, your dividends, and your pensions. I believe that we can do better than this. To this end, I urge all shareholders to improve their voice in the company and vote for cumulative voting shareholder proposal number two.
Thank you, Martin. Now Pat Zerega will present proposal number three.
Thank you, Mr. Chair. I'm here to move proposal number three. Shareholders ask the board of directors to adopt a policy that the board will not use earnings per share or its variations, such as diluted or operating earnings per share, or financial ratios, return on assets or net assets or equity, in determining a senior executive's incentive pay or eligibility for such pay. Unless the board uses a number of outstanding shares on the beginning date of the performance period and excludes the effect of stock buybacks that may have occurred between the date and the end of the performance period. This policy shall be implemented without violating existing contractual obligations in existence on the date this proposal is adopted. Shareholders support the use of performance metrics that align with senior executive pay with long-term sustainable growth.
There is a concern that this alignment may not exist, however, if a company is using earnings per share or certain financial return ratios to calculate incentive pay at a time that the company is aggressively buying its own shares. Earnings per share and financial return ratios can be directly affected by the changes in the number of outstanding shares. Thus, a stock buyback means that earnings per share is calculated by dividing earnings or net earnings by a reduced number of outstanding shares, a process that can artificially boost earnings per share. A higher earnings per share may not reflect an actual improvement in performance. Please vote for proposal number three, deduct impact of stock buybacks from executive pay.
Thank you, Pat. I believe David Almasi is here to present proposal number four.
Hi. As you said, I'm David Almasi. I'm the vice president of the National Center for Public Policy Research. We are a shareholder. I want to explain to you our shareholder proposal entitled, Political Lobbying and Contributions. We had two goals in filing this proposal. The first goal was to block a shareholder proposal from the New York State Comptroller from making it onto the GE proxy statement. We succeeded in doing that. The second goal is to encourage the company to stand up for its values and pro-capitalist agenda in face of attacks from the New York State Comptroller and his cohorts. We didn't know for sure that the New York State Comptroller and the New York State Common Retirement Fund would be the specific group to file the anti-free speech proposal, but we had a good idea it would come from the anti-capitalist As You Sow network.
Last year, you may remember, the Philadelphia Public Employees Retirement System filed a similar proposal with GE. We filed a resolution this year with similar language, but with a pro-business message. Since the Securities and Exchange Commission has a first in time rule, and ours was in first, the New York State Comptroller's proposal won't see the light of day. GE investors should cheer that result. The New York State Comptroller, working with a broad network of liberal groups attempting to use American corporations to silence speech and defund advocates of free enterprise, are doing these sorts of things. Following the U.S. Supreme Court's 2010 Citizens United decision, this network has filed hundreds of resolutions complaining about the alleged lack of transparency and accountability in corporate lobbying and political activity.
However, such groups never expressed concern about the billions of corporate dollars that go to fund liberal causes and politicians. Herein lies the hypocrisy of that proposal. This liberal network abhors corporate speech when it's perceived to skew to the political right, yet it remains silent when the speech supports leftist causes. The As You Sow network has tried to co-opt GE's investors into anti-free speech efforts in prior years, and its proposals received nearly 30% support. That's appallingly high. Many investors were perhaps misled by As You Sow's apparent calls for transparency and accountability. We hope investors will now understand this network's extremely partisan nature and deceptive tactics.
This network complains that corporate relationships with groups such as the U.S. Chamber of Commerce, the American Legislative Exchange Council, or ALEC, the Business Roundtable, the National Association of Manufacturers, and other pro-business organizations expose companies such as GE to reputational risk. Considering that the network regularly smears these free market groups, it's a circular argument with no basis in fact. Groups such as the Chamber and ALEC promote a fair economic environment devoid of excessive government regulations and onerous corporate taxation. Such an environment would help and not harm General Electric. That's just what the New York Comptroller and As You Sow want, to end American capitalism and destroy private enterprise.
My fellow shareholders, in future years and on other corporate proxy statements, if you see a proposal from the New York Comptroller or any other group in the As You Sow orbit that seems to beg for transparency and accountability, please vote those down, too. Thank you.
Thank you, David. Dennis Rocheleau presenting proposal number five. Dennis.
Thank you. I believe my proposal speaks for itself, and I also believe that a company that claims to embrace transparency ought to tell us more about what has proved to be a massive misallocation of capital. Thank you.
Thank you, Dennis. Patricia Zerega with proposal number six.
Thank you. Here to present proposal number 6, shareholders request that our board of directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote were present and voting. This written consent is to be consistent with the applicable law and consistent with giving shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholders' ability to initiate any topic for written consent consistent with applicable law. The proposal topic won majority shareholder support at 13 major companies in a single year, including 67% support by both Allstate and Sprint. Hundreds of major companies enable shareholder action by written consent. Please vote for this best practice in corporate governance during this challenging time for GE.
Thank you, Pat. We'll have time for more general Q&A shortly. First, are there any people who would like to discuss these specific proposals? Thank you. Agenda item 4 is balloting. Let's move on to the balloting. You'll find a ballot on your seat. If you have a ballot ready to turn in, please hold it up and I'll ask the ushers to collect it. Have all the ballots been collected? Ballots collected at this meeting will be reflected in the final vote results. Agenda item 5 is the inspector's report. I believe the inspectors of election are ready to announce the outcome of the voting. Let's go to the inspector's report. Michael Barbera of IVS Associates will be presenting the report of the inspectors. Mr. Barbera, do you have a report for us?
Mr. Chairman, the inspectors of election have completed an initial count of the votes cast at this meeting in person or by proxy. Proxies representing approximately 6,449,000,000 shares were 74.3% of the total shares eligible to vote were received. Other shares have been voted at this meeting by ballot or by proxy. On the basis of our initial count, the inspectors of election announce the following results. The election of directors. Directors each received at least 4.3 billion favorable votes, and all nominees have been elected. Management proposals. The advisory approval of our named executives' compensation, for 91.6% of shares voted, against 8.4%. Approval of the GE International Employee Stock Purchase Plan, for 97.5% of shares voted, against 2.5%. The ratification of KPMG as independent auditor for 2018, for 64.9% of shares voted, against 31.5%. The shareowner proposals. Independent chair, for 41.2% of shares voted, against 58.8%.
Cumulative voting, for 12.8% of shares voted, against 87.2%. Deduct impact of stock buybacks from executive pay, for 6.5% of shares voted, against 93.5%. Political lobbying and contributions, for 21.2% of shares voted, against 78.8%. Buyback report, for 5.6% of shares voted, against 94.4%. Written consent, for 25.8% of shares voted, against 74.2%. Mr. Chairman, this initial tally is subject to verification and the final tabulation may reflect small changes in the vote I have announced. The final tabulation will be set forth in the formal report of the inspectors of election to the Secretary of the company, which will be made after the count has been verified. This concludes our report.
Thank you, Mr. Barbera. That concludes the formal business of the meeting, and now we will move to agenda item number six and open it up for Q&A. We have already heard some extensive comments, so we want to give other shareowners who have not spoken a chance. If you wish to speak, please come to one of the two microphones in the aisle, and when you are recognized, give your name and ask your question, please. Is there anyone who wishes to discuss an issue? Let's start with microphone number one, please. Kevin.
Yes. Good morning, shareowners. My name is Kevin Mahar. I believe this is the 24th consecutive shareowners meeting that I have attended and spoken at as an advocate for GE retirees. I could not agree more than what Bill Freeda had brought forward to you as far as voting for the board of directors. I believe that the board of directors, when they made that horrible, despicable decision to take away the insurance from over 65, could not have known what was really going to happen. Mr. Immelt had said, I think it is an exact quote, in 2015, that eight out of 10 retirees understood this takeaway. The company, in their lawsuit, is saying that there is no economic harm to retirees. That is the biggest lie I have ever heard in my life.
I do not know how officers of the court could make such kind of comparisons and lies about what happens. The average person at GE who had insurance, increase their pay to keep the same kind of insurance by at least $100 a month. A month. Not only that, then you had the drugs that you also had. You have to go through the OneExchange. One example, a gentleman came down to my office, and we signed him up for the OneExchange. It took two hours and 20 minutes. Two hours of that person's time and efforts to try and sign up for a drug program. It is despicable. There are things going on in the GE helpline. A couple of people. Carol Jones from Lynn called to get the packet for her deceased husband, who was also a GE retiree. Okay?
I stayed on the phone for an hour and a half before we could find out what the status was of her packet for her death benefits. As it turned out, they had not sent them, or she did not receive them. There are things like that are happening. One person had to get 40 minutes, she tried to report her husband's death, and she could not get anyone on the line at the helpline. Okay? I am making a suggestion on that you take something like the Social Security kind of method to inform people that you go call back. When you are reporting a death, it is stressful enough without having to do something like that. That is one suggestion. The other thing is. Oh, by the way, welcome to Boston, John.
I hope that we're able to go into the headquarters sometime with a retiree group, like Bill suggested, and really sit down and have some real dialogue. I know that you must be up to your rear end in alligators right now, when you get a little chance, would like to see you in Lynn. Thank you very much.
Thank you, Kevin. I appreciate your service, I certainly would look forward to getting together, I'm sorry for that experience as you've outlined that. I certainly will take that back to our teams and make sure that we address the issues that were raised. Thank you for your comments. Microphone two, please.
Hi, my name is Christine Gildow. I'm a shareholder, I'm here representing not only my own investment, but the investment of my 97-year-old mother, Phyllis, who's been the biggest fan of GE for many years, as she invested and reinvested the dividend. I'm here because of the stock price, I don't think that your plan and the board, you've addressed what caused the negative tipping point for the stock. I think the block and tackling that you're all doing on the business is what's made the company. As it's clear, the value of the assets are greater than the stock. The issue isn't the value of the assets. Well, it is when you're writing them off, but they're mostly written off, I hope, by now.
Your problem is a credibility problem and perception, I would like to see more and have more done to address that issue. The investment community. You don't have the credibility, it shows in the stock price and the perception. I think the new oxymoron will be KPMG and credibility issue in the same sentence. I do hope that you can significantly address the stock issue quickly, the credibility and the perception of what's communicated. The business is a wonderful business, the model. Thank you. It's a thrill to be here. I hope the rest of the world gets to see what's here. In the meantime, the CFO and the board, I think there should be accountability, I didn't see that when it comes to measuring the stock price and the perception.
Tomorrow's headlines will tell you whether or not this shareholder meeting, whether you were able to be effective in communicating confidence, not only in the business model, the block and tackling. That's what you're good at. That's what's there. The issue is the financial community doesn't believe in support or even have credibility that the restated numbers are the final ones. How many more restatements will there be? You have a lot of work to do. Good luck.
Thank you, Christine. As I said at the outset, we're disappointed in the performance. We're focused on improving the results. I'm highly confident that we can do that. I think with respect to the credibility issue, I share your perspective and understand your perspective, and we think the best path forward for that is to improve the results of the company. As I said at the outset, 2018, our mission is to rebuild our trust and confidence in all of you and obviously in the broader market in general. That will come really principally, and in some ways only, through improving the performance of the business, and that's what we're focused on. Thank you for your comments. Microphone number 1.
Good morning, Mr. Flannery. My name is Tom Bobrowitz. I'm a 15-year employee of the General Electric plant in Erie, Pennsylvania, also a GE stockholder. I'm a third-generation employee of the GE plant in Erie, Pennsylvania. I'm here with other GE workers from Erie. We're here to bring a message to General Electric that GE needs to commit to our communities. GE workers are the economic stimulators of our communities. We buy houses and new cars. We spend our income in the local communities. GE workers put money into our neighbors' pockets, and we feel good about that. Over the last several years, GE has slashed the workforce in Erie from 3,000 to 1,500. That's 1,500 people in the Erie community who are not stimulating the local economy the way we used to or building profitable locomotives for General Electric.
GE's recent history of poor decision-making is hurting not only workers and communities, but also shareholders. Corporate leaders are making one bad move after another. The company's decisions wreak havoc with the lives of GE workers and local economies. They don't make financial sense, they threaten to lead us all over a cliff. GE's management is playing shell games with jobs. They're moving work out of existing profitable plants with skilled and experienced workforces that build quality products while building new facilities in right-to-work states to avoid unionization and hire inexperienced workers at lower rates of pay. They're exiting profitable businesses in order to chase technological trends and the latest management fads, repeating a history of buying at a premium and selling at rock bottom. GE workers, the communities where GE operates, and the GE shareholders are all tied into this mess together.
Getting GE on the right course starts with GE making a commitment to their employees and the communities in which they operate. GE has signed the United Nations Global Compact, agreeing in abstract to meet fundamental responsibilities in the areas of human rights, labor rights, environmental stewardship, and good governance. We're asking General Electric to make good on this promise by making the following commitments to our communities. Commit to the local economies of the communities that have made GE successful. End mass layoffs and plant shutdowns, and honor your commitments to retirees. Commit to respect workers' rights. End the practice of intimidating workers who try to exercise their fundamental right to organize collectively. Commit to environmental stewardship.
Where GE has harmed the health of workers, community members, and the environment, GE should offer lifetime medical monitoring at no cost to those persons exposed to PCBs and other toxic material, and financial restitution to those communities. GE has, since its founding, been a conglomerate, and the workers in diverse communities like Erie, Pennsylvania, Lynn, Massachusetts, and Peterborough, Ontario, have made diverse, quality products at a healthy profit to the company. GE communities have proven that we can make GE a profitable company. It's time for GE to commit to our communities in return. Thank you.
Thank you, Tom. Microphone two, please.
70 seconds. Like I said, don't take this personally. My name is Craig Williams. I'm here with another shareholder, my mother, Helen Williams, who, like my father, are both retirees of General Electric. Last position was at corporate headquarters in Manhattan. Between us, we own well over 14,000 shares of common, and we are here representing merely ourselves. I originally intended to use this brief opportunity to ask you a major issue, like your plan on recovering the power division, what consequences of the CFM56 failure last week, or the continuing competence of OneExchange's role in retirees' healthcare, or resuscitating the stock value, which we are all painfully aware has been in the dumper. Instead, I'm asking you about the weighty issue of why the process to attend this annual meeting is so difficult. I was hoping I would be the only one.
The last couple of months have been a series of contradictory instructions mailed from EQ Shareowner Services and General Electric. One case is the same envelope. Missing annual meeting correspondence, missing proxy statements, one attendance card with incorrect name, the other one express mailed to us last week still hasn't shown up, and so on. During my office hours, I've had to make about a half a dozen phone calls, all of them long, a lot of time on hold, to try to correct such things. What is equally frustrating is the last time I was at this annual meeting was 2 years ago, and I recall a similar set of occurrences. It has gotten no better. My only other experience attending this meeting was 30 years ago. It was a paper-based system. It worked just fine.
My mother and I, like everyone else here, I suppose, are alarmed at what's been happening to this company, our company. If the current major problems, which you did a very good job explaining and how you're planning to address them, if those major bear problems bear any commonality with the trivial problems, like a struggle to attend an annual meeting, then our company is in deep kimchi.
Thank you, Craig. I appreciate you taking the time, and I apologize for that experience, and that's certainly something I'll have Mike and I will look into exact details of what's behind that and obviously correct that. Thank you for taking the time. Microphone one, please.
Good morning, Mr. Flannery. My name is Janet Gray. I have worked in Erie for GE Transportation for seven years as a salaried, non-exempt UE 618 employee. I also worked for Drives, Motors, and Generators, DM&G, in Erie from 1986 to 1992 in an exempt position.
I grew up in Wesleyville, Pennsylvania, one of the small communities surrounding Erie. Most of my school friends' fathers worked for GE. Everybody wanted to work there. As a sophomore at Penn State Behrend studying management information systems, I was excited to get my foot in the door at GE. After graduating, I got a full-time position. I loved the work, I loved the people, and I loved GE. I was even sent to Crotonville for the corporate entry leadership program and actually was able to meet Jack Welch. I well and truly had the GE meatball stamped on my forehead. I even met my husband, who was a GE Australia employee while working at DMMG, and moved to Australia in 1992, where I lived for 20 years. I continued to stay connected with my GE family, even living abroad.
My first introduction to GE transferring work was when Drive Systems was moved to Salem, Virginia, in 1991. I know our community took a hit with that decision. In 1993, GE announced that DMMG would be transferring out of Erie altogether. Even living in Australia, I was crushed. Some of my old friends and coworkers left GE, some transferred to other GE sites around the country, and some were lucky enough to transfer to GE Transportation in Erie. Some took early retirement, and others just went on unemployment. No one could understand why this decision was made. DMMG was a profitable business, but obviously not profitable enough for corporate. As part of the move of Drives, Motors, and Generators, GE sent medium motors to Monterrey, Mexico, and large motors to Peterborough, Ontario.
Interestingly enough, GE recently announced it was closing the century-old Peterborough facility, shifting their work to France and other countries. This move is a direct result of obligations made during the Alstom acquisition. GE continuously plays a shell game with workers, shifting jobs from one country or location to another with no regard to the effects it has on the communities it leaves in its wake. When I returned from Australia, I began working for GE Transportation as a union employee. Just two years after I returned to GE, the company announced the decision to transfer Evo locomotives to Fort Worth, Texas, site. In 2016, yet another intent to transfer work was received. I was directly involved in negotiating with the company then to save the UE 618 jobs.
We produced a plan that could have saved more money and kept jobs in Erie, but GE wasn't interested, and the positions were transferred to India. In 2017 came the announcement that GE was going to transfer locomotive production from Erie altogether, dubbed the end of an era. For 81 years, the unionized workforce in Erie, P.A., worked tirelessly to make GE Transportation what it is today. The community that had been a strong support of GE has lost faith. I fight an internal struggle daily. I go from someone who had so much loyalty and faith and pride in this company, the best company in the world, to someone who despises their lack of loyalty to their employees and their communities.
It disgusts me how you're working to destroy the union workforce, the workforce who made the best locomotives in the world, the workforce that continues to return to work after being laid off time and time again due to the cyclical nature of the business, the workforce that continues to make profits quarter after quarter, even in the severe market downturn. Excuse me. It's time for General Electric to make a real commitment to their employees and the communities in which they operate, to commit to supporting local economies, respecting workers' rights, and practicing environmental stewardship. That is why we are here to say, "GE, commit to our communities." Thank you.
Thank you, Janet. Microphone two, please.
Hello, my name is John Huber. My first wife, who passed away eight years ago, was the granddaughter of William David Coolidge, who was at the research lab in the early 1900s. Therefore, my wife's family, and now me, have been shareholders of this company since, I think, 1905. While the company is experiencing a rough patch, it appears that the board and management are changing and adapting to accommodate the times. For example, in the first quarter conference call last week and today, Mr. Flannery discussed the development of a new operating system as part of the effort to get the company back on track. Trying new ways to solve a problem is also the way GE's research lab has operated since it was founded in 1900. I recommend that the board and management put a priority on R&D in its turnaround plans.
The research lab was instrumental in creating at least two of GE's current segments. Inventing the first workable X-ray tube was the basis for the healthcare segment, and developing the jet engine was the basis for the aviation segment. Through pure and applied science, the research lab continues to do what Thomas Edison said, quote, "I find out what people need, and then I proceed to invent it," unquote. That guiding principle continues to be the objective of the research lab, whether it's in Niskayuna or Bangalore, or here in Pennsylvania. As a long-term shareholder and father of two great-grandchildren and three great-great-grandchildren of William David Coolidge, an inventor and director of the research lab and vice president of the General Electric Company, I ask that the research lab be given full support during this multi-year fix.
It has rewarded customers, employees, shareholders, and the public for over 100 years by addressing people's needs through new products and opening new markets. Properly supported, it will continue to do so in the future. Thank you very much.
Thank you, John, thanks for your reminder of the tremendous history of the company. Thank you. Microphone one, please.
Good morning, Mr. Flannery. It's a pleasure to meet you. I'm Scott Slawson. I represent the locomotive builders in Erie, Pennsylvania, Local 506, the best locomotive builders in the world. Thank you. I had no intention of speaking today, I figured I'd take the opportunity while I'm here and appreciate everything that you're doing for the company. In 1910, Thomas Edison made the decision to build locomotives in Erie, Pennsylvania, he said, "That's where I want my locomotives built." In its heyday, that factory had almost 25,000 workers in it. Today, we're less than 3,000. A couple of my coworkers did come up and speak about commitments to the community. These are things that we're very interested in. We want commitments to our community. We want to be around, and I'm proud to be a prime shareholder of this company.
I've always taken a lot of pride. It's an amazing thing when you can look at your child and say, "I built that." Especially with locomotives because they're the coolest things on the planet. That being said, the disheartening part of this conversation is the end of an era that Janet Gray spoke of. We are very proud of the locomotives we build. We want to continue to build those locomotives. As you are well aware, very shortly, we're not going to be GE employees in one form or fashion. That's disheartening in itself. It's creating a lot of disruption in our factory, a lot of issues. On top of all that, the other disheartening piece of this is we're getting ready to hire a couple hundred brand-new non-skilled employees in Fort Worth, Texas, to engage in the commitments that GE has made with transportation.
We're going to pay to train them. We're going to go through all this process, and I still have 845 workers that are skilled, trained, and ready to build locomotives for this company and the companies that want them from us out there that are unemployed. These are things that are very hard for me to deal with. I would be remiss if I didn't ask you to consider moving some of that locomotive production back to Erie. Let's take current GE employees, and let's bring them back to work and give them the respect they deserve. Thank you.
Thank you, Scott. Microphone two, please.
Good morning.
Morning
Retirees and shareholders. I'm one of those people, and I'm also from Lynn. That makes jet engines. Frankly, everything that I heard this morning, taken away everything I wanted to ask. I'll end up with two questions. Not statements, but questions. One of them is, repatriation is going to have to come in this year. Am I correct?
Repatriation is the question?
Yes.
You're talking tax?
Tax preparation. Excuse me, preparation. Also, the question would be if GE has a health department. The question goes about the money coming back to the United States later on this year, is what are you going to do with those funds?
GE's a global company. We've got investments and tax sort of implications of those all around the world. Those are always dynamic. There's no specific or, frankly, significant amount of money coming back to the U.S. related to this and no specific investment plan. We always look, as I said earlier, at the best way we can allocate the capital of the company and the most productive way to invest that. That's something that changes as markets change and our technology changes. We're really focused on allocating the capital and the cash resources of the company as best we can, and that's something we spend a lot of time with our board of directors with.
You know, I really didn't understand what you said, but I hope you're saying you're going to put it back in the company, not necessary in-
Yes.
Okay. Back in Lynn, we are kind of an old industry there with the aircraft.
Yes.
Could use a lot of that money to going back into the machinery, updating the whole areas. From what I understand and know, that we have asked corporate more than once, "Hey, we need new machinery," or, "We need our machinery that we have refurbished." Love to get some of those in there and with the employees to run them. That's about that. In the industrial, you have healthcare. You have a health department that, what do you do with that health-
Are you talking about our healthcare business?
Yes. My question is, we are farmed out to OneExchange, and like Kevin said, going through that process, and I'm one of them, it took over two hours. I was lucky it didn't take over two and a half hours or three hours because he took the time to do it for me with a couple of people. My question is, with the healthcare division, why isn't there ensuring or assisting in ensuring all these retirees? Point is that we're the new retirees from the baby boomers, which is a growing population. You guys can help insurance and waylay the cost of healthcare by giving us a dividend, not a dividend, a percentage off our OneExchange or whatever company that is insuring us. That's my question.
Thank you very much for your question. As I said, with respect to the earlier question, I've heard you loud and clear, we will go back and investigate and address the issues that several of you have raised there and come back.
Okay. That OneExchange-
I'd like to make sure that we have other people have a chance to.
Okay. I just want to say that OneExchange is.
I understand your comment. Thank you.
Thank you very much.
Microphone one, please.
I'm Linda Hoover out of Erie, Pennsylvania. My husband and I were third-generation employees of General Electric, and our daughter, who is the fourth generation, is currently employed at the Erie plant. I left employment to become a homemaker. My late husband, father, and grandfather all had more than 40 years service. My brother had more than 39 years service, and he is currently a contractor out of Boston. When my late husband took early retirement, during the exit meeting, he was told that he and I would retain medical benefits in his retirement. I have the document. These were the same promises given to my grandfather and father at their exit conferences. The company's promises to them concluded upon the deaths of their respective spouses. The company's promises to my late husband proved to be a lie.
How can an employer, after a verbal and written agreement, renege on this agreement? Changes in anything affecting then-current employees should have begun with the next people retiring and during each exit conference, not with those already retired. Any deviation from what was agreed upon between the retiree and their former employer should not happen. What a disservice that General Electric has perpetrated on retirees who gave most of their lives in service, which generated massive profits. My late husband was on a brand name prescription, and he was notified that he would have to have a three-month trial of a generic of this medication at a lower cost. He wasn't feeling the same while using this generic, and he never made it to his next doctor's appointment. How many other retirees died during their change from brand name to generic and now there is generic alternative?
General Electric, with all the profits, failed these retirees. General Electric has failed their stockholders also. The extreme drop in the price of the stock and the declared dividends is a travesty. At one point, the only division in the black was the locomotive division located in Erie, and the company built a new plant in Texas. Anyone with common sense would determine that a division pulling its weight would be safe. Wrong. Decisions such as this bring into question as to the sound business sense of the chairman and the board. How do the chairman and the board justify their weighty compensation when the stockholders are being decimated? I, for one of your stockholders, rely on the dividends, and I'm shaking, to supplement my stagnant retirement monies with my expenditures on the rise. You can tell I'm not a speaker.
Compensation to the chairman and the directors should be merit-based and only when these goals have been fully accomplished. General Electric has failed the retirees, their employees, and the stockholders. When are the chairman and the board of directors going to hold themselves accountable for these failures? I thank you for listening.
Thank you very much, Linda. Microphone 2, please.
Mr. Flannery and other members of the Board and my fellow shareholders. I want you to know that before I discuss my prepared remarks, which are brief and much briefer since other persons have spoken and covered those things, is that I was impressed by two things this morning. Number one, Mr. Flannery, you being there greeting GE shareholders. That must be a first, and we appreciate that. Secondly, I was always offended in the past meetings when the directors were introduced, and they marched up, sat down on the front row, and all we saw were the backs of their heads. Well, we're making progress. We now see their profile. Maybe next year, we'll see them facing us, the owners, so that they can meet eye to eye and see what reactions that we have.
GE, which was once the most preeminent corporation in the world, the bluest of blue chips, is now truly an embarrassment. It's an embarrassment that you can read, it seems like weekly. Last weekend, for example, on the front page of the "Financial Times" was a very disparaging article. Last Monday, "The Wall Street Journal" also on the front page, wrote a very poignant profile of one of the retirees who put his money into GE stock, hoping that it would appreciate in value, and now he's having trouble making ends meet. I've referred in the past, and I think accurately, to the GE Board as being overpaid, underperforming, and compliant with the leadership of GE. I hope that has changed. I hope that the new members can ask very deep questions and significant ones. In the year 2000, I attended a GE meeting in Richmond.
That was the time, Mr. Flannery, you may remember that GE was waiting for word from the European Union to see if the regulators would approve the purchase of Honeywell. Didn't work out that way. At the close of business that very day, GE closed at $54.42, and Honeywell closed at $55.39. Last Friday, GE closed at $14.54, and Honeywell closed at $150.57. Ms. Seidman, you may be interested in knowing that the CEO of Honeywell at that time was a year ahead of me at Colgate University, your alma mater. I recall we haven't been really treated with respect. For example, who will ever forget when Mr. Immelt was interviewed on television and asked whether or not he thought that the dividends would be reduced? He said no. It was only weeks later that the dividends were slashed by 68%. A real hardship to many people.
That was a real blow to everyone, not to be forthright with the shareholders. At the Orlando meeting, I remember in the prospectus, there was a key employee who was given certain goals to reach, and if he met those goals, he would receive a bonus of $4 million. He didn't reach that goal, but guess what? They gave him $1 million anyway. It reminds me of the current trend of children receiving a trophy just to participate in an athletic contest. This event was much more costly to GE. I recall for years, I and others said, "Let's get rid of some of the non-core businesses." I remember specifically saying, "What about NBC? Why should we be held hostage to the vagaries of what the fall programming would be?" They finally did that, but it took years to do that.
I may say, Mr. Flannery, from what I read and assuming that what I'm reading is accurate, I think you are taking the position that we've got to get rid of these non-core enterprises and concentrate on the industrial, which really makes GE what it is.
Sorry, I'll just ask also, we have a number of other people waiting to speak.
The last one I just want to mention. It's the elephant in the room. By definition, no one wants to acknowledge the elephant in the room, which is over the years, GE now has 8.5 billion shares outstanding. Honeywell has about 735 million, and I think even IBM has less than a billion. That's a big pie to split among the shareholders. You're going to have to generate so much revenue, and I'm wondering in the form of dividends. I'm wondering if you have any plans of either repurchasing the stock or otherwise cutting it down so that we can at least participate in the profits as they generate.
Thank you.
One last. All I'm saying is we shareholders only wish for you to right a floundering ship. Make GE the preeminent corporation that it once was. Thank you very much.
Thank you. I would like to just address one part of your question. I think it's important for everyone in this room, but also for our customers and our employees around the world. With respect to the, "GE is an embarrassment now." We acknowledge, as I said at the outset, a very difficult year in 2017 and the need to improve the performance going forward. That's clear to us. It's clear to everyone. I've been at the company for 31 years. It's been my life, and I'm still extremely proud of this company. The essence of the company did not change in the last 12 months. The integrity, the technology, the impact we have in 180 countries around the world on people's lives, it is a company that I'm deeply proud of, and we need to restore that.
I want all of you to be proud of the company and not lose heart in the cycle that we're in, and especially thank our employees who I know are managing that same issue. I appreciate you bringing up that comment, and I really think it's important that we fix what we need to fix. The core essence of the company remains and will shine again. Thank you. Next question.
My name is Martin Dunellen, and I'm a private shareholder, one of the few here. My first question is to Mr. Garden. Ed Garden, director. Why didn't he speak up for his shareholders in light of the situation of this company? The same with BlackRock and Vanguard.
Martin, I'm here as the chairman.
Mr. Garden
on behalf of the board to answer any questions.
In past annual meetings, the board of directors always stood up and answered for themselves.
Martin, I'm here as the Chairman of the Board, and I will address the questions that you have in that context.
Okay, now, what is the prognosis for the dividend?
As we discussed this as recently as last Friday, we talked about it briefly this morning, which was, given the events of 2017 and the impact of that on the business, we were forced to make a reduction in the dividend. As I said earlier, that was a decision that was a deep analysis of the situation and the prospects with full cognizance of the impact of dividends on all investors, but especially retirees and others living on fixed incomes. We came to the conclusion in the context of that situation, that that was necessary. We do not have any current plans to change that dividend, but it was something that was necessary for us to do in 2017.
When do you think the dividend will be increased? Give us some sort of timeline.
Martin, we've answered where we are for now, I really want to make sure that the other people have a chance to get up and ask some questions.
Okay. By the way, Matt Cribbins, tried to get in touch with him many times. He's not responsive to any of the shareholders. Matt Cribbins.
Thank you, Martin. Microphone two, please.
Good morning, Mr. Flannery.
Good morning.
My name is David Bjorkman. I worked for 37 years of my working career at the General Electric Company in Lynn & Everett. I'd like to welcome the new members of the board and certainly hope that they do a much better job than their predecessors. My concern involves the state of the pensioners. I want to tell you folks that contrary to what the General Electric lawyers have said, there is significant harm being done to your long-term retirees, all retirees, with the change in the healthcare process. Personally, now, $150, $200 a month might not seem like anything at all to folks that are taking in the incomes that you folks are taking in. $100-$150 a month is a severe blow to me. I am very disappointed. Well, I was very proud to work for the GE.
I took them to have a high degree of integrity, and I put a lot of effort into the work that I did to make sure that I put out a quality product. I was injured a number of times as I started my GE career before the health and safety teams that are currently in place were in place. There is a lot of my DNA sitting on General Electric engines in flight to this very day. A promise was made to we retirees by the head of corporate HR, and that promise was that we would continue to receive subsidized healthcare until the end of our lives. That promise was broken, and I am ashamed of the GE for breaking that promise.
I'll tell you that Something that we're very much worried about also is that there is a $1,000 supplement that is applied to the GE retirees, supposedly to take some of the pain out of taking away our subsidized healthcare. Currently, the $1,000 that is allocated to us, mine runs out this month. For the rest of the year, I'm going to have to pull out of my limited resources what I need to cover my healthcare, and it's a big hurt. I want you to look at me, and I want to tell you, this is a big hurt to me, and it is a big hurt to all these other retirees that you have here. I'm very worried, and it has been brought up that perhaps GE may decide to stop that supplement. I can't believe what I'm going to do when that happens.
I don't believe that that supplement should be reduced or taken away. I think it should be increased, maybe doubled.
Right.
That way, mayhaps, I'll make it to maybe half the year before the money runs out. A promise was made to us. That promise was broken. The very least that you can do is try to help us out by increasing that yearly supplement that is given to us. Thank you very much.
Thank you, David.
I hope that GE does pull itself out of the hole that it's gotten itself into and once again becomes the vibrant, integrity-backed, based company that it once was. Thank you very much.
Thank you, David. Microphone one, please.
Hello, my name's Hal Walters, also a retiree. I came to make a comment for you, Mr. Flannery. You have a tough job. You had a tough year. You asked to give me your trust. I think you asked for all of us here to give you your trust because you have to rebuild it. I drove here to learn about what you were going to say and to start that trust process. What you told me was three things. You said you're going to rely on the strength of your business, the conglomerate of GE. You're going to rely on the strength of basic simplicity, back to the basics. You're going to rely on the strength of your employees to bring back the GE that we know and love.
My point is that this is exactly the same words that we've heard over and over again, and it does not resound anything innovative or new, sir. I don't know if that's the basis to start the trust building process again. That is my comment to you for your consideration. Thank you.
Thank you, Hal. Microphone two, please.
Hi, my name is Craig Kroll. I'm a 28-year employee down in Erie, Pennsylvania, and I want to thank you guys for the chance to speak. I'm really wishing you guys the best of luck because I've bought a lot of stock over the years, and it's not doing very good. For you guys putting a choke hold on us in Erie and going to get rid of us, I'm really going to be needing that money. I wish you guys would rethink that because every time you guys put us down, the employees there stand up. The management team does. We come back against all odds. We hit our numbers. We make you guys money.
I can remember in the 1990s, making profit to pay for all the fines that Water and everybody else was getting from the EPA, and all of our profit went to pay for all the wrongdoings of everybody else over the years. Just in closing, I want to wish you guys the best of luck getting our stock price back up there and our dividends. If you get rid of us, that's going to be your loss. Thank you.
Great. Thank you. Thanks for taking the time to come, Craig. Microphone one, please.
It's not morning, it's afternoon. Good afternoon, Mr. Flannery, and welcome to Boston.
Thank you.
That's where I grew up, and that's where I worked at GE in Lynn, and I retired after 34 years in the Aircraft Engine Division. I just wanted to let you know, especially the board of directors, that I decided to retire early because I had a lot of GE stock. At that time, it was $60 a share. Now, I made my plans based on the fact it was $60 a share. After I retired for approximately four years, the same GE stock went down to $6 a share. I had to make a lot of changes in my life.
One of the things that I don't hear talked about here at this meeting, and I haven't heard it discussed at all, and it's another major problem for me as a pensioner and for you as the board of directors, all the publicity that I read about, especially in The Wall Street Journal this week, we are $22 billion in deficit on the pension fund. I would like to know, Mr. Flannery, what you are going to do about that $22 billion deficit. Am I going to still receive my pension? The rumors that I hear, and I'd like to have you verify it, that you plan on turning our pension fund into an annuity. Is that true?
Sir, with respect to the pension, there is a significant deficit now. Part of that's a function of interest rates and things that affect that calculation. Maintaining the integrity of the pension is a deep priority for us. We've announced this year that we're making an additional $6 billion contribution into the pension, and that's what our plans are for the pension. We respect the importance of it, and we'll preserve the integrity of it, and we're taking steps this year with significant funding, to close that gap.
As you know, when we retire, especially the board, when we retire, we really rely on that pension.
I understand.
That's my plans. I can't make any other plans without that.
I understand.
Can I take your word that you're not going to turn it over to an annuity?
I understand, sir.
Can I take your word?
Actually, I'm not familiar with the issue that you're saying. That's not a specific plan.
Yeah, it's been reported in The Wall Street Journal and other places.
That's not anything that we've worked on.
All right. Maybe I'll talk to you when I'll be up in Boston in July, and maybe I'll have the opportunity to talk to you. I'd like to say one other thing. The retirees here are in the same boat that I'm in. You asked the board of directors to take an applause. I would like to have all our retirees stand up, and I'd like to have an applause for all the retirees here because it's a lot of retirees.
Thank you.
Just remember, Mr. Flannery, the last thing is, seriously, I would hope that you would keep a man of your word. You're an Irishman, a man of your word. I'm an Irishman from Boston. Do not turn that pension over to an annuity. It would be a real black eye to the General Electric Company.
Understand.
From all the retirees. Thank you very much.
Thank you. Microphone two, please.
Hi, I'm Paul Reinman. I was a GE employee for 10 years, working with the Knolls Atomic Power Laboratory until that part of the business was transferred to Martin Marietta. My question is actually quite simple. I've always thought of GE as being a high-tech company, and I enjoyed working for them, as an engineer. I see the technology today on your manufacturing floor that's pretty much current state-of-the-art. I'm sure that's also shared by competitors, and they're aware of the same technology. How can I learn more about what's being developed as future technology? I know you probably can't speak to specifics, although as an engineer, I'd love to hear as much details as possible. How can I learn more about what GE is doing to advance the technology across the line of their businesses?
We continue to invest extremely heavily in technology in every one of the businesses that we're in. I ran the healthcare business for the last three years, just as an example. Deep investment in the imaging technology, a whole new era, really, around artificial intelligence, digital applications of healthcare. One area I'd instruct you to look at is just across the company, heavy investment in digital and the ability to take the machines and the information and to combine that with software and data and create amazing things that an engineer would truly appreciate. I'd follow our digital efforts. I think if you look here today, you see a whole wave of changing the way we manufacture things. If you're looking literally for sources, certainly if you go on the websites and things of the company and also the individual business units, you'd see that.
To your point, at the end of the day, we have to continue to produce great outcomes for our customers to survive and thrive. That's really a function, ultimately, of the technology that we have. That is a top priority for us, and no business can last over the long term without that. Please keep an eye out for it. It's a top priority, and I think today gives you a sense of the quantum change of where we might go with this. We've had questions for a bit over an hour. Thank you. Take the last two or three, and then if anyone else has questions that we didn't get to, I'd encourage you to let us know. We'll make sure someone follows up on that. If we could have three more questions, please.
Hello, John. I'm Thomas Horton. I'm a 44-year retiree now from GE. My father was 38 years. My whole life has been GE. Just a number of things I want to mention quickly. One is, I recently, not too long ago, sent you an email with 13 recommendations on what you could do to help our company on a Friday night. Monday morning at 6:00 A.M., you responded to me. I just want to say how encouraged I am that you're listening and that several of the suggestions that I made you've already implemented, which is also nice. What I want to say is, keep in mind that your employees, your retirees, and your shareholders are a free resource to you.
We are very happy to help. Reach out to us, and we will help.
Thank you very much.
Thank you very much, Thomas. Thanks for your note. Thank you. Microphone two, please.
Thank you, Mr. Flannery, for the last question. I would like to say that I'm from Cleveland, Ohio, and I have three worries in life. The first is my football team, the second one, shorter term, is my basketball team, and most important by far is my interest, concern, and love for the General Electric Company. What I would like to say to the 12 directors is, you have an opportunity to make history in this great company. On behalf of all the people who are here today, but even more so, the hundreds of thousands of shareholders all around the world, for God's sake, please, give it all you've got. We're with you.
Thank you very much. One more question, please, and then again, I ask anyone else who didn't have their question addressed, please stay around. We'll make sure that we collect those and that I follow up on all those. I appreciate all the questions. We'll go to microphone one, please.
My name is Melody Jackson. I retired with 37 years at General Electric in Fort Wayne, Indiana, third generation. My grandfather, that retired with 45 years, received the Charles Coffin Award. For anyone that doesn't know, he was the first CEO at General Electric. I'm the benefits advocate for our GE retirees, appointed by GE Global. I also have a direct contact there, as well as the direct contact with Via Benefits. There are a lot of issues that come up. Just as an example, last night I got a call at 11:30 P.M., I was already here, with a retiree that had an issue. Some of the issues that stand out in my mind, I got called by a daughter that said her father had passed away, and her mom had this stack of checks that they did not cash because they thought they were spam.
What they were, they were reimbursements that came from OneExchange or Via Benefits. They didn't recognize what it was. Needless to say, it was over a two-year period. My suggestion to them was get it deposited. If you have any issues, the checks won't go through because they've expired, let me know. That's part of what I do. I can do HIPAA forms, which I've done for GE as well as Via Benefits, and their direct contact gets back to me as soon as possible, and usually that's within, at the maximum, 48 hours. A lot of retirees have issues, as the Social Security has stated, 75% of seniors do not have computer skills. That's absolutely true. A lot of what I do are contacts through Facebook. I know everybody shrouds on Facebook.
When it comes down to it, there'll be comments in other locations that will say-- They'll tag me and say, "Melody Jackson, would you check into this?" I have a stack this tall of folders of people that I've dealt with issues so far this year. I've learned from Bill Freeda, I've learned from Kevin Mahar, as well as the people I work with. Our RAGE group was basically pretty radical when we started. We've gone into the solutions part of it. What I would like to be is part of the solution, not part of the problem. I challenge the benefits people, which we have a fall meeting every year, which I was introduced to last year. I'd like to sit down, go through with them what the issues are, how we can solve them, rather than standing back and pointing the finger at each other.
We need to be able to communicate to the retirees. 30%-35% of people do not receive the RRA of $1,000. I am one of those people, with 37 years, that I did not reach the 65. My goal in life is to be able to take care of these issues with the retirees. There's no way my parents or grandparents would be able to go through this because of the lack of computer skills. My emails are posted on our website, as well as when people have issues, I give it to them immediately or they private message me. I do this all day long, besides taking care of a four-and-a-half-year-old granddaughter.
My challenge is, I'd like to sit down with the benefits people, along with part of our board from RAGE, and come up with some of the solutions and options that people have done, like GM gives $300 a month to their retirees. It's done through the pension, not through RRA, and no person such as Via Benefits to implement it for them. It's part of their pension. It is taxed. You also have AT&T, my sister and brother-in-law, they draw $4,200 a year on RRA. I thank you.
Thank you. Thank you so much for helping out the retirees. We've got three people at the microphone. Why don't we just pause after these three questions, and we'll-- I don't want to have you not have your question. We'll go to microphone two, please.
Thank you, Mr. Flannery. My name is Mike Ferritto. I'm a business agent at UE Local 506 up in Erie, Pennsylvania. I represent 1,500 active employees and about 845 dislocated employees. What I'm here to say is more of a statement than it is a question. I think, in my humble opinion, what we have at hand is a branding problem. I think the brand GE was built on the backs and in the blood of the workers. I think that that was why it was one of the most respected brands in the world. What we've seen is that the company, and in the comments that we've heard today from the retirees and some of the active members, some of the things that they've lost in terms of retirement opportunities and pension opportunities.
What we've seen is the company, when they are out to protect the bottom line, sometimes it's at the cost of those employees. What I would ask is that you would take into consideration the fact that we have, I believe, 300,000 active employees worldwide, who when you make decisions that affect their lives, and I'd venture to say around 150,000 retirees, and you can correct me if I'm wrong on that are receiving benefits from General Electric. That in January 2018, that $1,000 reimbursement account that these individuals are talking about no longer exists for anyone who turns 65 after that date, that they're asking to be increased now, no longer exists.
I think that we need to see the correlation between the retraction of those benefits and the treatment of the employees, and the cost, and how that is reflected in their attitudes towards the brand, and how it's reflected in the perception of the brand from the world. When we talk about worldwide, every employee touches three to seven people at the dinner table or in life, and they have conversations about work with those people. I think that that's toxic to a company. It's concerning that people feel the way they feel about that brand, that GE brand. Before the light dims and we can't click it back on, I would suggest you take that into consideration in your future decisions as a board. I think that you need to invest in your employees.
I think that you need to bring them back up to the gold standard that it once was to be a GE employee. I think that you'll see that pay in dividends in the future. No more short-term gain for long-term pain. Invest now in your people, and it'll pay dividends in the long run.
Thank you, Mike. Microphone one, please.
Hello, fellow shareholders. I am Diana Driver. I'm an engineer with Power Services, and I just want to tell you how inspired I am today to hear all of the tremendous stories that GE has brought into your lives, and the 30 years plus of experiences that you've had. Thank you for the inspiration and motivation. I'm excited to go back into work tomorrow and continue to push forward and turn this ship around and provide you guys, the share owners, the stock price that you want, and also, I'm excited to sit here and represent Mr. Flannery. Thank you for everything you've done. It is a struggle, but you're doing a great job. Keep it up, and I look forward to next year. Thank you.
Thank you, Diana. Thank you. Last question, please, on microphone two.
Mr. Chair, members of the board, and fellow shareholders, employees, my name is Al. We've looked at the past. We haven't talked very much about the future, but if you read the annual report, Mr. Stokes does a stellar job of talking about reset, refocus, and renew. He talks about asset utilization. That's an important subject, getting that inventory turned around. Work in process is a bad word. I task the board and the management of the General Electric Company to focus on manufacturing. Manufacturing is what has made this company, and it will dig us out of this hole. I look around at this facility. This is your benchmark, gentlemen and ladies, for the future of the company. The people, I hear an awful lot of dedicated employees. They believe in what they're doing. As company shareholders, we have to give them the tools to work with.
That's your job, gentlemen and ladies, to make that happen. I implore you to run this company from a manufacturing standpoint. I think Lee Iacocca said a long time ago, I think that conversation came up about, "What are you going to do? Sell me hamburgers? I'm going to sell you insurance." We can't make money by taking it out of one pocket and putting it in the other. We have to manufacture. Let's manufacture our way out of this. Give the people the tools to work with modern technology, and good things will happen. Thank you.
Thank you so much for your comment, and that's a good way to maybe finish where we started. Thank you so much. In the sense that this really is a quantum change in the future of manufacturing. Not only just for us, but as we take it to other companies around the world. We continue very much to view the importance of manufacturing as central to the way we think, and we continue to invest a tremendous amount in the technology of doing that. This is an early maybe down payment on what we see as an extremely promising future for manufacturing inside the company and for other manufacturers using GE's new technology. I think that's a good way to sum up why we're here today, and I just want to thank you again for taking the time to come and share your thoughts.
I echo Diana's comments. It was inspiring to hear so many of the stories of multi-generation GE experiences, and that's part of why we're all so proud of the company and love this company. I can assure you that the management team and the board, we all feel the same way about the company, and we will be working as hard as we can every minute to make sure that we restore that for you. Thank you again for coming, and the meeting is adjourned.