Operator: Our next question comes from Andrew Kaplowitz with Citigroup.
Andrew Kaplowitz: Could you just give us an update, Larry, on what milestones you need to see to make sure GE is on track for Vernova separation in early ’24? Obviously, you saw strong growth in Onshore orders. How much does better U.S. onshore utilization help you as you move forward? And you mentioned similar profitability in Q2 in renewables versus Q1. What’s your line of sight toward that decent step-up in earnings past Q2? And maybe give us a little more color on your focus on improving product quality and the cost-out program you have at this point.
Larry Culp: Andy, I think you’ve really outlined the answer to your question in many ways, right? We know it won’t be about the balance sheet. We know it won’t be the internal preparation that will pace when we spin GE Vernova. It will really be a function of business performance. And again, I think we’re really encouraged by what we’ve seen the last couple of quarters, not only in terms of the sequential progress, but the team’s ability to deliver on those commitments. We know we’ve got a lot of work to do here in the second quarter, in the second half to continue the progress in Onshore Wind. But between the prospect of better volumes, again, better pricing, combining with those volumes and all of the work that we’ve done to improve the cost structure, I think sets us up for that positive year in ’24.
Really excited about what we’re seeing at Grid. We’ve talked about the big orders out of Europe a couple of times here. Go at that mask the underlying improvements, both in terms of price and costs broadly across the Grid portfolio. They’ll be modestly profitable this year. And those are really the 2 big businesses within renewables. And that sets us up to work through some of these growing pains in Offshore to position Vernova to go in ’24. You asked about the quality efforts at Onshore Wind. The list continues to be fundamentally a static list. I think we knocked off 4 or 5 of those items this quarter. We’re about 20% of the way through that body of work. We’ll probably get to roughly half of that by the end of the year. We’ve got some more challenging, more time consuming issues to knock off the list later this year.
But again, I think the team is working to plan and doing all we can to help customers in that regard. And as we help customers, we help ourselves. So again, I think we are on track. A lot of work to do. But I think we’re optimistic that, that work will be done and GE Vernova will be a stand-alone independent investment-grade industry leader in the energy transition sometime early next year.
Operator: Our next question comes from Deane Dray with RBC Capital Markets.
Deane Dray: I want to stick with renewables, if we can. And could you give some specifics on how selectivity is working today? I mean you had some — especially with regard to what was booked and just how that reflects disciplined underwriting and so forth?
Larry Culp: Deane, I would highlight 2 forms of selectivity. One is what you might think of as simply geographic. Credit to Scott and the team for being willing to say no or yes, largely on constructive terms, the opportunities outside of our core markets in the U.S. and in Europe. I think one of the challenges early on, and it’s not unique to GE Vernova. It’s not unique to any evolving industry. We, at times, I think, went after business with the best of intentions and didn’t get paid for the risks that we were taking, signed up to probably do things that in hindsight we shouldn’t have. So what you see or what you here’s referred to with our selectivity effort is just to be more discriminating, more targeted in the geographic markets, let alone the applications that we’ll pursue.
That’s one. I’d say, secondly, as the market shifts here rapidly from abundance to scarcity, we really have a finite amount of capacity in the short to medium term to sell. And I think here again, the credit to the team we’re really just being as smart as we can about making sure that we’re fully and fairly compensated for the technology that we bring and the solutions that we offer. And it’s the 2 of those combined that you’re beginning to see help the margin profile in Onshore Wind that will play out even more so as the IRA kicks in and we see more volume come through the P&L, let alone the change to the cost structure that I mentioned earlier. That’s — I hope that gives you a full answer, but that’s how we’re going about this day in, day out, opportunity by opportunity.
Carolina Happe: And we’re also following up very clearly on not only what the margins are in the P&L, but also in orders and even in tech select and a much sort of stricter strike zones for that.
Operator: Our next question comes from Josh Pokrzywinski with Morgan Stanley.
