GE's Immelt Lacks Options

CEO needs to shrink, simplify the business, but can't

By Nick McMaster, Newser Staff

Posted Apr 3, 2009 2:32 PM CDT

(Newser) – Don’t envy GE’s Jeffrey Immelt. Though his core business remains profitable, the CEO presides over a huge, unwieldy empire. Parts of the conglomerate, like GE Capital, have tanked the entire corporation’s share price and caused it to lose its prized AAA credit rating. Worse, Immelt may have to sell the finance arm or other businesses to shrink the firm, writes Jena McGregor for BusinessWeek.

Buyers are scant in the current economic climate—paradoxically, GE’s $48 million nest egg make it uncommonly equipped for acquisitions—and even the iconic appliance and lighting businesses failed to sell. Separating GE Capital seems the next logical step, except that the financing firm relies on GE proper’s cash and credit rating. It would need $32 billion in additional funds to stand on its own, not counting billions in renegotiated borrowing costs.

General Electric CEO Jeffrey Immelt speaks during a news conference Thursday, April 2, 2009 in New York. (AP Photo/Mark Lennihan)

In this Nov. 18, 2008 file photo, Jeffrey Immelt, CEO of General Electric, discusses healthcare information technology at a news conference in New York. (AP Photo/Mark Lennihan, file)

In this April 23, 2008 file photo,General Electric Co. CEO Jeff Immelt waits for the start of the company's annual shareholders meeting in Erie, Pa. (AP Photo/Tony Dejak, file)

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GE's Immelt Lacks Options

CEO needs to shrink, simplify the business, but can't

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GE Hiring Thousands of US Veterans

Firm to invest $580K in aviation plants amid effort to reboot economy

S&P to Put Euro Zone on Credit Watch

Announcement likely after markets close

Moody's Also Drops Italy's Credit Rating

Cites woes with the euro, not Italy itself

Fitch Reaffirms AAA Rating

Also says outlook on US ratings is stable

SEC Probing S&P Downgrade

But analysts say proving insider trading violations would be difficult

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GE's Immelt Lacks Options

CEO needs to shrink, simplify the business, but can't

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OTHER STORIES ON OUR RADAR

CEO • General Electric • corporations • Jeffrey Immelt • Triple-A credit rating • credit rating • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

GE Hiring Thousands of US Veterans

Firm to invest $580K in aviation plants amid effort to reboot economy

S&P to Put Euro Zone on Credit Watch

Announcement likely after markets close

Moody's Also Drops Italy's Credit Rating

Cites woes with the euro, not Italy itself

Fitch Reaffirms AAA Rating

Also says outlook on US ratings is stable

SEC Probing S&P Downgrade

But analysts say proving insider trading violations would be difficult

About Us

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Newser By Users

Community

Site Maps

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What is Newser?