When it rains it pours for General Electric (GE). Tuesday Reuters reported that Brazil’s power system operator requested that 662 GE transformers be removed from the the country’s grid system:

Brazil’s power system operator has requested that 662 transformers made by General Electric Co (GE.N) be removed from the country’s grid after a number of explosions involving the devices, according to document seen by Reuters.

The document, which was prepared by Brazil’s grid operator ONS and submitted to the Ministry of Mines and Energy in early December, says 53 GE transformers have exploded in the past six years, suggesting that the incidents may be associated with the product or its materials. They are all the same transformer model.

GE is disputing whether the explosions were product-related. The company pointed out the incidences occurred in one part of Brazil’s electric network. ONS countered that similar incidences had not occurred with other transformer manufacturers or different GE models.

Nonetheless, the report sounds rather foreboding for GE. The transformers were manufactured by GE’s Power division, which was supposed to be a key growth engine for the company. Management has vowed to turnaround Power’s struggling operations. Recent developments will not help matters.

Does Power Have “Quality” Issues?

After GE was booted from the Dow Jones Industrial Average in June 2018, former CEO John Flannery announced restructuring efforts. Aviation, Power and Renewable Energy (“NewCo”) would remain core to GE. Other segments would be sold or spun off as standalone operations. Read more:



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