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Analysis - GE chooses renewables boss with M&A track record

UNITED STATES: Anne McEntee comes to her new job as GE's vice president for renewable energy with plenty of career experience, something she will need in abundance if she is to come close to saving GE's position as number one turbine manufacturer.

The US market's nose-dive and GE's need to expand in the EU and offshore are likely to be among her concerns when she formally replaces predecessor Vic Abate.

McEntee, with a PhD in applied mathematics, was most recently president and CEO of flow and process technologies at GE Oil & Gas. Importantly, said analysts, while there she led the highly successful integration of Dresser Inc, a provider of infrastructure products for, among others, the petroleum industry.

Her experience with a relatively new and growing division at GE — the oil and gas division was formed less than a decade ago — will be especially valuable, said Dan Holland of investment research firm Morningstar. GE, variously ranked first or second as a wind-turbine manufacturer in terms of global market share, has been in the wind business for 11 years.

McEntee's Dresser background could also prove useful if GE buys another wind-technology company, as some analysts expect. GE's $3.2-billion acquisition of Converteam, a drivetrain and generator technology company, in 2011 is the sort of move the firm could repeat in order to expand in wind, said Holland.

A 15-year GE veteran, McEntee oversaw the expansion of the conglomerate's power services business into India, Africa, Eastern Europe and the Middle East. Such emerging-markets expertise could benefit McEntee, given GE's struggle to secure an EU footing in the face of competition from its best-established rivals, Siemens and Vestas.

Her background in services is notable because of manufacturers' need to profit from operations and maintenance, said Dan Shreve of Make Consulting. But less certain is how McEntee will help GE gain traction in the offshore wind market, where its efforts have so far stalled, said analysts.

GE sells the vast majority of its wind turbines in the US, a market sharply contracting in the short-term. In mid-April, GE reported first-quarter wind revenues down 53% year-on-year, following last year's boom because of uncertainty over the production tax credit's future beyond December.

McEntee succeeds Vic Abate, GE's renewables leader since 2005, an unusually long tenure in such a role. Connecticut-based GE typically rotates its executives.

Abate has left to head GE's gas- and steam-powered electrical turbine business, which has similar revenues to the renewables division but is expected to grow faster, said Brian Langenberg, an analyst at Langenberg & Co.

"This looks like a promotion for both [McEntee and Abate]," added Langenberg.

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