Financial Collapse RSS

Nov 20, 2008

GE Capital to Cut Jobs and Assets in 2009

GE CAPITAL, the lending arm of General Electric, will cut $US2 billion ($3.1 billion) in costs next year as it pares jobs, forms regional units and marks assets such as overseas home mortgages for possible sale.

The changes included the creation of a chief operating officer post and would take effect on January 1, the company said.

GE Capital would shed an unspecified number of its 75,000 jobs as the unit consolidated back offices and curbed lending in residential mortgages, its vice-chairman, Michael Neal, said.

"In a world where we think liquidity is an issue and is likely to remain an issue for a while, we're de-emphasising in general product lines that attract a lot of debt for the amount of earnings," Mr Neal said

The chief executive officer, Jeffrey Immelt, is shrinking the finance units to 40 per cent of the parent company's profit from about 50 per cent last year as he reduces debt issued and focuses on more profitable areas.

GE Capital funded its businesses using AAA-credit rating and was betting it could continue that model without becoming a bank-holding company in the US. The new set-up would help liquidity, Mr Neal said.




Source : SMH
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5 comments:

Anonymous said...

GE is in big trouble. The only reason why we are downsizing our financial businesses is because our cashflow has shrunk to a point where we cannot payoff our short term debt. Thus, we want to fund less on a dily basis to make up for it. I expect 15,000 jobs to be cut from GE Capital alone before MArch of 2009.

Anonymous said...

To the anonymous statement above...you're correct. The lay offs will take place the 2nd week of January 09. Meanwhile, Mike Neal and his Direct Reports are working on raises and bonues for 2009. This is what GE Capital is all about...greedy people. Don't worry about us...we will take care all of yous...once we're out!

Anonymous said...

I am a result of one of the many lay offs at GE Fleet Services (Commercial Finance) I was layed off in March of 2009 and have not found a job in spite of devoting 40+ hours a week at the library on the computer looking and applying for jobs. I'm surprised that the Commercial Finance Arm of GE is still alive. With all of the woes of the financial arm of GE, it makes you wonder why they haven't off-loaded that division entirely. At least it might save a few people's jobs in other divisions. By the way, has anyone followed GE's stock over the last 2 years? Why in the world is the GE Board adamant that Jeff Immelt is the "be all, end all" of GE???? .........Please Jack (Welch) won't you come back?

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