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

[herding cats]

Source: New York Times

General Electric plans to sell off most of its finance arm over the next two years, redefining the multinational conglomerate as it seeks to complete a transformation begun amid the tumult of the financial crisis.

In addition to huge planned sales of assets outlined by the company on Friday, G.E. will take other significant steps, including bringing back about $36 billion in cash that now resides overseas.

Rapidly shrinking the finance arm, GE Capital — once the most powerful driver of the company’s earnings until it rocked the parent company after the fall of Lehman Brothers in 2008 — will erase one of the most prominent legacies of G.E.’s former chief executive, Jack Welch.

But it could also release the company from one of its biggest burdens: strict regulatory requirements that come with GE Capital’s being regarded as a financial institution that is too big to fail.


Read more: http://www.nytimes.com/2015/04/11/business/dealbook/general-electric-to-sell-bulk-of-its-finance-unit.html

[jmowreader]

1. Most

This makes sense. GE got into the finance business because they make things regular banks would draw the line at financing. Try getting a loan for a locomotive sometime.

If they rid themselves of all consumer finance and just loan on industrial products, it will be better.

[project_bluebook]

2. Agree

and it will be one less financial institution the feds will have to bail out when the next financial crisis comes and it will come.