Ge To Dump Finance Arm To Focus On Actually Doing Something Productive

[interestrateripoff]

G.E. to Retreat From Finance in Post-Crisis Reorganization

G.E. will sell most of its finance arm, focusing on its core industrial operations as it completes a transformation begun during the financial crisis.

An interesting move, to actually try and making products that what people want rather than making money by lending money.

[Save me from the madness!]

The thing is though, whilst i applaud and approve, the latter has to be a far easier way to make money normally Sadly

[John The Pessimist]

Well they're f**ked then! Making stuff is so last millennium! The 21st century is all about securitisation, monetisation, and the socialisation of losses......

[XswampyX]

I see it as 'we've killed this' and so will move on, to kill..... something else.

Just to add, GE finance has it financial arm stuck into just about every thing you ever though about and more....

If you just farted then GE finance just made a $

Edited April 10, 2015 by XswampyX

[sPinwheel]

Something productive? They are going to start shooting bankers?

[spyguy]

The story has not been written yet on GE + GE Finance.

At worse, it would make a good Vanity Fair feature, who appear to be the only news outlet that are willing to go over this material.

Or a Michael Lewis book.

GEF was a monster born out of every dodgy corporate practice going, every stretched bit of dodgy accounting, bowing to a vain glorious over inflated ego of an American corporate 'hero', Jack Welch.

Before the Great financial crash, I was looking at GE + GEF and thinking 'WTF?' Does no one see its a massive scam.

GEF nearly took GE down with it, and would have destroyed the last 30 years of corporate America - GE was on a massive plinth. Its CEO were like kings of America. It would have been the corporate equiv. of finding out the royal family were really a binch of alien lizards.

[spyguy]

Ahh rank and rating.

An idea from statistics, borrowed by MBAs.

Works for a large - say millions population, where you have no selection

Does not work when you dealing with a team of 10s,where each has been interviewed and already picked from a large pool.

US corporate beliefs, which is what they are, come mainly from GE and the MBA culture.

They have been a total fcking disaster for the countries, companies and employees.

Might have well employ an astrolger rather than an MBA -and thats an MBA from one of the better places. God knows what a graduate of Skanksville Tech college's business unit MBA program would do.

[spyguy]

Update.

There's been a right up in the Economist.

There's an evern better article in The New Yorker:

http://www.newyorker.com/magazine/2015/05/04/back-to-basics-why-g-e-ditched-finance

Well worth the read.

A good example of how fcked up the West''s companies have become over the last 20 odd years.

[billybong]

An American company but the timing of its announcement (probably a popular announcement except for financiers etc who are so bailed out it'll be matterless to them except for those employed by/connected to GE itself) one week before the UK's general election must just be a coincidence.

Apparently its finance arm also needed a bailout but it might be calculating that there's more financial devastation to come and it wants out now as it won't be bailed out a 2nd time. Apparently it's keeping some of the financial parts so perhaps in a few years time it anticipates getting involved/investing in the ruination of the economy again if there's ever another proper upswing.

Edited April 30, 2015 by billybong

[Will!]

On 11/04/2015 at 06:10, spyguy said:

The story has not been written yet on GE + GE Finance.

At worse, it would make a good Vanity Fair feature, who appear to be the only news outlet that are willing to go over this material.

Or a Michael Lewis book.

GEF was a monster born out of every dodgy corporate practice going, every stretched bit of dodgy accounting, bowing to a vain glorious over inflated ego of an American corporate 'hero', Jack Welch.

Before the Great financial crash, I was looking at GE + GEF and thinking 'WTF?' Does no one see its a massive scam.

GEF nearly took GE down with it, and would have destroyed the last 30 years of corporate America - GE was on a massive plinth. Its CEO were like kings of America. It would have been the corporate equiv. of finding out the royal family were really a binch of alien lizards.

It looks like it still hasn't been written.

Financial Times: Jeff Immelt shares out blame for GE’s decline

Short version.  He was CEO, paid tens of millions, but it wasn't his fault.

Edited February 26, 2021 by Will!

[markyh]

1 hour ago, Will! said:

It looks like it still hasn't been written.

Financial Times: Jeff Immelt shares out blame for GE’s decline

Short version.  He was CEO, paid tens of millions, but it wasn't his fault.

They are fooked, they sold the biggest profit generating division , healthcare (biopharma+ others) to Danaher, who have spun it off as Cytiva, and it is absolutely flying, had an amazing past 12 months with Covid.  All for $26 Billion in cash. 

And the dodgy bit, GE's new CEO was an Ex-CEO of Danaher who spent the best part of a decade trying to buy GE's Healthcare division off them, and Immelt always said "No" as it was such a money maker propping up loss making parts of the business. 

So as soon as the Danaher ex boss gets into GE, he completes the sale from the inside as GE desperately needed the cash, so they sold the crown jewels!!!  Dodgy as fook. 

[spyguy]

9 hours ago, Will! said:

It looks like it still hasn't been written.

Financial Times: Jeff Immelt shares out blame for GE’s decline

Short version.  He was CEO, paid tens of millions, but it wasn't his fault.

 

7 hours ago, markyh said:

They are fooked, they sold the biggest profit generating division , healthcare (biopharma+ others) to Danaher, who have spun it off as Cytiva, and it is absolutely flying, had an amazing past 12 months with Covid.  All for $26 Billion in cash. 

And the dodgy bit, GE's new CEO was an Ex-CEO of Danaher who spent the best part of a decade trying to buy GE's Healthcare division off them, and Immelt always said "No" as it was such a money maker propping up loss making parts of the business. 

So as soon as the Danaher ex boss gets into GE, he completes the sale from the inside as GE desperately needed the cash, so they sold the crown jewels!!!  Dodgy as fook. 

Eeeh ... whos been digging around in the archives on a quiet Friday night?

The scale of the fraud and general dumb f-wittery at GE during Welsch term was off the scale.

Ive been accused of being a bit obsessed on GE and Welch. However, every ting bad, bent and f-headed about working at any size company since ~1985 all comes back to Welsch's GE.

 

Best cut-n-paste graph I can get. Doesnt show the full horror of the last few years, where the SP fell to ~$5.

GE is basically bust. Its being run for its debt holders, allowing them to recover their money. Thats all. Its begin dismembered bit by bit. The share price is irrelevant.

Theres been some noticeable events since my post in 2015.

Oct 2018

https://www.ft.com/content/9beb58f4-c756-11e8-ba8f-ee390057b8c9

When General Electric replaced its chief executive this week, it also said it would write off $23bn from the value of one of its core divisions, the business supplying equipment to the power industry.

Most of the charge relates to its 2015 purchase of the energy businesses of Alstom of France for $10.1bn, and it raised a question that has been widely asked in the days since: How is it possible to take a writedown that is greater than the cost of the acquisition?

 

That did for Flannery.

Heres Jack response, the old ffing fraud

 

I should point out the GE paid ~6lbln in fees - wall street, management consultants, etc  from 2000-2018

Industrial stalwart GE contemplates an overhaul

After decades of dealmaking, weakness in the power sector is forcing the company’s executives to look at radical changes

https://www.ft.com/content/c46bc320-c87f-11e8-ba8f-ee390057b8c9

General Electric feels “a sense of urgency” in selling assets to cuts its debts and strengthen its balance sheet, its chief executive has said, as the company’s shares slipped below $8 for the first time since the financial crisis.

https://www.ft.com/content/ee3f5ec4-e688-11e8-8a85-04b8afea6ea3

https://aswathdamodaran.blogspot.com/2018/11/the-ge-end-game-bataan-death-march-or.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+blogspot%2FpHUuM+(Musings+on+Markets)

 

GE agrees to settle DoJ subprime mortgage case for $1.5bn

Shares rise 14% as new chief executive announces strong revenue growth

https://www.ft.com/content/ae11b70a-2550-11e9-b329-c7e6ceb5ffdf

 

https://www.cnbc.com/2019/08/15/ge-shares-drop-after-madoff-whistleblower-harry-markopolos-raises-red-flags-on-its-accounting.html

Lazy bit of shorting. But not far off the mark.

This isnt GE. But its a fascinating bit on proto GE

https://www.ft.com/content/50174573-1881-34c5-b4a0-ecfae5b1ee50

Ding dong the fraud is dead

https://www.ft.com/content/bc13465e-5c8e-11ea-8033-fa40a0d65a98

Comments:

joined GE, just after he retired, he was less loved internally by the rank and file... Welch cut R&D, manipulated SEC & tax reports, entered financial services in some dubious segments and left a mess from which GE & shareholders have never recovered but his bank balance and ego did well

he is a father of todays management style, so not only GE is as you experienced.

Yes, amazing how ignorant the world can be. He left GE a much more dangerous and fundamentally weaker company than it was when he joined it. He was, overall, a fraud.

RIP to the worlds most overrated chief executive. Squandered a century of GE goodwill to borrow and spend into an illusion of growth. Left the company weakened and indebted, from which it’s still trying to recover. 

Jack Welch built a house of cards.  A master of fake earnings.  Pure arrogance.  Worse than Madoff.  I knew Jeff Immelt when he ran GE.  I pity him for the hand he was dealt.  He tried to keep up the charade.  He was a decent man.  GE destroyed his reputation.  I knew Larry Culp when he ran Danaher.  He is a humble, analytical man.  Seeks to be a constant learner.  He built a great team and culture at Danaher and Fortive.  You could sit next him for 6 hours and never know he is the CEO of a Fortune 500 company.  Others would let you know in 30 seconds.

How a power-hungry CEO drained the light out of General Electric

https://nypost.com/2020/07/11/how-a-power-hungry-ceo-drained-the-light-out-of-general-electric/

Immelt taking GE on a side route doing stand up

https://www.nytimes.com/2016/08/28/technology/ge-the-124-year-old-software-start-up.html

https://www.zdnet.com/article/ge-immelt-on-software-strategy-why-not-us/

A desperate and late and total failed attempt to get Google n Apple PE multiples.

'We do SW! Can we have googles PE multiples????'

You know that 'Sw is the future thing?'

https://www.thelayoff.com/ge-digital

https://www.thelayoff.com/t/14vnyDBL

I recall the idea was becoming the "Apple of the industrial internet'. Even if that was possible to do, GE Digital never had the people to pull it off. Internally, the effort was written off as a joke within months of inception. Once folks saw that Predix was mostly goofy dashboards, it lost mindshare and should have. been k–led.

General Electric’s accounting tactics bared in SEC settlement

Industrial powerhouse underlines risk of short-term, market-orientated approach to management

https://www.ft.com/content/6de86032-0a83-41ba-85a8-125ccce3b0be

 

In short, what happened since my 2015 is:

Welsch continued as GE, doing what he thought Jack did. And failing, because Jeff is a moron.

Look at GE EPS chart while and after Jack was in charge - Madoff-esue.

Jeff carried on, copying what Jack did - pulling levers, bullshitting. Nothing worked.

Jeff was booted and Flannery was put in charge. Flannery is not a moron. However, hed not seen the full accounts.

Jack had, but he was fraud.

Jeff had, but he was a moron.

Flannery did, but was smart enough to realise the org was a vast fraud and fcked.

Flannery booted out as the board could not believe theyd been had for so long.

Creditors put their own man in, whos now taking GE apart whilst it still has value.

https://marker.medium.com/the-flawed-twisted-legacy-of-jack-welch-105b36ff1521

 

If GE Welsh and all that was just limited to GE then Id not have a problem.

Howver GE andWelsh f-wittery have been used as a cookie cutter for all medium to large companies inthe world.

And the method is one massive scam that will blow up.

I face the fallout everyday where orgs have been stripped off all resources, management decided to run a barebones operation, which normally means 30% below barebones as they are so far behind recruiting

It means when the music changes, as it did with sw/internet, theres no capacity to move. Hence, why all the US most valuables companies are ones that either did not exist 20 years ago (google, etc). Or did not follow GE )Apple). And why China become dominant.

Financial engineering taking precedent over running a profitable le company.

 

And GE/jack has made people working the private company life hell since ~1990.

 

 

 

 

[markyh]

2 hours ago, spyguy said:

 

Eeeh ... whos been digging around in the archives on a quiet Friday night?

 

I have / Had a close source @ GE Healthcare from 2006 up to the split. they say if you want to know what is happening in a company, ask the boss's secretary. 

[Will!]

2 hours ago, spyguy said:

 

Eeeh ... whos been digging around in the archives on a quiet Friday night?

The scale of the fraud and general dumb f-wittery at GE during Welsch term was off the scale.

Ive been accused of being a bit obsessed on GE and Welch. However, every ting bad, bent and f-headed about working at any size company since ~1985 all comes back to Welsch's GE.

...

If GE Welsh and all that was just limited to GE then Id not have a problem.

Howver GE andWelsh f-wittery have been used as a cookie cutter for all medium to large companies inthe world.

And the method is one massive scam that will blow up.

I face the fallout everyday where orgs have been stripped off all resources, management decided to run a barebones operation, which normally means 30% below barebones as they are so far behind recruiting

It means when the music changes, as it did with sw/internet, theres no capacity to move. Hence, why all the US most valuables companies are ones that either did not exist 20 years ago (google, etc). Or did not follow GE )Apple). And why China become dominant.

Financial engineering taking precedent over running a profitable le company.

 

And GE/jack has made people working the private company life hell since ~1990.

 

That's what I find interesting about GE too.  Big companies go wrong every so often.  Sometimes they go with a bang like Enron, sometimes they go slowly like IBM (as documented in Robert X. Cringely's Accidental Empires and The Decline and Fall of IBM).  But "Neutron Jack's" time at GE affected the whole landscape of business.