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 7/10 Very Good --- www.businessweek.com http://www.businessweek.com/careers/managementiq/index.rss
| Read BusinessWeek’s management blog for future trends and learn mangement tips from famous business leaders. ... |
Thursday, May 15, 2008 --- 72 days ago http://www.businessweek.com/careers/managementiq/archives/2008/05/good-bye_to_ge
| Ask many Americans what they associate with General Electric and they'll give you two words: light bulbs and ovens. Ask investors what they would like to see GE dropkick from its family and you'll often hear the same words.
Now a piece in The Wall Street Journal says GE is about to put its appliances business on the auction block. While GE won't comment on the report, offloading the unit makes a lot of sense. It could bring up to $8 billion into GE's coffers and get rid of a business that no longer fits GE's mission. GE may decide to spin off the business or get into a partnership, too.
Pundits will likely attribute the timing of this move to GE's startling earnings miss last quarter. On April 12, GE announced a 6% drop in first-quarter earnings, related to the credit crunch, and CEO Jeff Immelt cut the company’s profit outlook for the year. The stock plunged 13%, amid a spate of analyst downgrades. The stock price issue has dogged Immelt, who took over for Jack Welch in September 2001 with the stock trading around $40 a share; it’s now hovering above $32.
Immelt has to do something to show he's steering the $173 billion company in a better direction. And the $7 billion appliances business has been a sore point with Immelt for some time.
First, it's not global. GE sells the bulk of its appliances to U.S. customers. That makes it hostage to the vagaries of the U.S. economy and, even more, to the volatilit ... |
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