GE shutting the lights off for 2 divisions
General Electric announced plans to sell its consumer and industrial divisions on the heels of its May announcement that it was looking to unload its appliance business. Amy Scott reports.
General Electric logo (General Electric)
More on The Economy
TEXT OF STORY
Kai Ryssdal: Another of the world's biggest companies is getting smaller, though. General Electric announced today it's thinking about spinning off its consumer and industrial division -- appliances, lighting, those kind of things.
But Marketplace's Amy Scott reports GE's still got plenty left.
Amy Scott: GE switched on the first incandescent light bulb almost 130 years ago, but lately its outlook has dimmed. The stock is down about 25 percent so far this year.
Christopher Bartlett is professor emeritus at Harvard Business School. He says CEO Jeff Immelt is under pressure.
Christopher Bartlett: And that means selling off parts of the organization that aren't growing as fast as his growth objectives.
Bartlett says areas like energy and medical products offer the most promise. GE's infrastructure business -- it makes aircraft engines and wind turbines -- drives roughly 40 percent of the company's sales.
Back in May, GE announced plans to shed its appliance business. The company isn't ruling out a sale of the larger consumer division.
But analyst Matt Collins with Edward Jones says it's a tough time to sell.
Matt Collins: You look what's happening in the credit markets these days, it's very difficult for many buyers to get financing, so to sell a business this large is a bit more difficult than putting together a spin-off alone.
If the spin-off goes through, GE would simply create a separate company and issue new stock to shareholders.
In New York, I'm Amy Scott for Marketplace.
Comments
Comment | Refresh
From Somerset, KY, 08/31/2008
There is a lighting division in Somerset, KY that is thrown into the spin off talk. Does anyone have any idea how a spin off will affect employee benefits and pensions? Many are concerned that they may lose pensions despite 30 years invested into the company but lack the retirement age. Apparently information is lacking between GE, its employees, and the IUE.
From Voorhees, NJ, 07/22/2008
meridian will gives a lot of information regarding GE Lamps.
http://www.meridianelectric.net
From Bloomington, IN, 07/13/2008
I work at G.E. and about 600 employee's are losing our jobs next year. We was told it was do to losing about $45 M last year (LIES). They should at least tell the truth. Louisville, KY has always been over our plant yet, they have always lost more money. We all know, that G.E. is still making money, just not enough for all the horders!! ( CEO, big shot's on the board, etc.) The real WORKERS are the ones that make them all the rich ones, we are just shoved down the road.
From Louisville, KY, 07/12/2008
I doubt this will cause you to lose your job. They aren't eliminating, they are simply selling or spinning off divisions. In other words, they might just make those divisions into new separate companies that still make the same thing.
07/10/2008
Great... and I JUST started working for them this week... >_
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.