But I didn't come to visit Norbom, a lanky GE veteran, to jawbone about Osama bin Laden. I wanted to talk deals, or more precisely, whether his company's six-year tear of acquisitions in Japan is getting rethought under his new boss, Jeffrey R. Immelt.
It's a question worth asking in these uncertain times. The Bank of Japan just issued a dire forecast for the world's second-biggest economy -- basically a two-year recession laced with the kind of price deflation that pounds earnings. The slump also tends to blow to smithereens the profit forecasts of the portfolio of companies GE has snagged during its rampage into Japanese financial services in the last decade.
KEY MARKET. This is no small issue for GE. Mostly via its GE Capital arm, it has acquired 13 Japanese companies in a string of deals valued at nearly $35 billion. In 1995, GE employed 3,500 souls. Today, it has more than 16,000. Though it has been doing business in Japan all the way back to the Meiji era, this has been GE's fastest-growing market for the past five years. It generates some $10 billion worth of revenues and is the second-biggest and most important outside the U.S.
Small wonder that soon after taking over from Jack Welch, Immelt paid a visit to Japan. And what Norbom heard was basically this: Keep hunting for more deals, joint ventures, and anything else that can expand GE's footprint in Japan. A business-development group focused on dealmaking is set to more than double, to 20 executives, under Immelt's orders. "He wants more focus on it," says Norbom, "He's still very, very bullish on Japan."
That would seem a tough thing to justify, but for a dealmaking machine like GE, maybe not. So far, it has enjoyed a pretty good record of buying and turning around troubled Japanese companies. Its list of charges include consumer lenders such as Lake and Minebea Credit, the giant Japan Leasing Auto, and Toho Life Insurer. All these deals so far are making their numbers, downturn or not, insists Norbom.
COMPETING TO BUY. You would think that as Japan enters its fourth recession in a decade, GE would find a lot of low-hanging fruit. Not necessarily, since it faces a lot more competition from other Western investment banks, vulture boutiques, and private-equity funds in the auction wars for troubled companies in need of cash and managerial help.
Says Norbom: "If you look at the market out there, the pipeline of opportunities has never been stronger, but I would also say there are more people chasing them. Two or three years ago, a company in distress might attract two or three bidders. Now, you might see maybe 10."
Of course, GE always has a big edge. It's the most glorified corporate name on the planet and has the deepest pockets anywhere. "We can bring in our experts on almost any issue, not to mention our access to capital and triple-A rating that brings the benefit of a lower cost of funds," Norbom says. And GE is no amateur at absorbing companies with a different way of doing things and indoctrinating them in the managerial cult that Jack Welch built. Indeed, over the last decade, GE Capital alone has integrated 400 outfits in deals valued at more than $200 billion.
GE THEOLOGY. Japanese companies now in the fold -- or on some target list of deals down the road -- can expect a full embrace from GE. Not that Norbom & Co. are a bunch of control freaks. Far from it -- GE prefers to keep core Japanese managers in place once they take over, and the more gifted ones have the prospect of moving up the hierarchy elsewhere. In May, Yoshiaki Fujimori, who ran GE's medical-systems business in Asia, was tapped as president and CEO of GE Plastics worldwide.
But GE doesn't dawdle after a deal gets done. Usually, a 100-day integration blitz get its new charge moving in the right direction. GE typically sets up a dual CEO structure, a Japanese manager and one its own, during this phase and, in some cases, for as long as a year or so. GE's new employees also get a Japanese version of the company's theology on managing in wallet-card form.
The cards include exhortations to "live Six Sigma Quality" (a rigorous quality-control process), to insist "on excellence" and be "intolerant of bureaucracy," to "act in a boundary-less fashion" and to always remember the "4-Es" of GE leadership: Energy that energizes others, the edge to make difficult decisions, and the ability to consistently execute. One can only imagine how the typically deferential Japanese salaryman reacts when he confronts such GE-speak.
BLOCKING AND TACKLING. Those who keep their jobs after the handover no doubt feel extremely lucky. Japan's jobless rate, which just spiked up to 5.3%, is sure to get worse in the coming years. And GE can effect big changes in a very quick fashion. Norbom and his team have already brought the auto-fleet-leasing companies out of the info-tech dark ages.
Just look at the operational differences. A big outfit like Japan Leasing would take a application and supporting documents from a corporate customer, make duplicate copies, and then distribute to various departments in a slow and grinding march toward approval or financing. Under GE's system, the moment a customer applies, every document is scanned and stored in an online processing system that routes automatic e-mail documents to everyone who has a say in the decision. "It not only decreases the amount of paper," says Norbom. "It basically automates the entire process from the initial customer contact to the finalized contract."
That may seem like basic blocking and tackling, but it's what GE does better than just about any company out there. And my guess is that the deal flow of companies interested in a tie up or outright takeover by GE isn't going to slow down anytime soon. The Immelt regime will be as aggressive as ever if the right kind of opportunity comes along. Don't expect GE to get gun shy in Japan. Bremner, Tokyo bureau chief for BusinessWeek, offers his views every week in Eye on Japan, only for BW Online