GE's Forward-Thinker (Musical Tribute)

Charles Kolb: The Value(s) of Wall Street

Forward-thinking CEOs like General Electric’s Jeff Immelt...

We need more CEOs and boards to follow their examples. Only when that happens can we be certain that the values that have led to short-term economic bubbles have really changed for the better.

It makes me want to...



February 10, 2009
Obama Selects 'Worst CEO of 2008' to Economic Advisory Panel, Says the Free Enterprise...

Obama Selects 'Worst CEO of 2008' to Economic Advisory Panel, Says the Free Enterprise Action Fund (Ticker: FEAOX); How Does Running GE into the Ground Qualify CEO Jeff Immelt to Help Steer Nation in Time of Crisis, Mutual Fund Asks

March 28, 2003
The First Trillion-Dollar Company

GE's expansion will come primarily from the nonphysical world. That is, the company will extend its already massive financial services business with more products for consumer and commercial customers. Chief Executive Jeffrey Imelt has not ruled out the subprime consumer lending business either. GE could expand its television efforts beyond NBC, which currently adds $7 billion to GE's top line, and its cable properties Telemundo and the Bravo network. With the U.S. government pushing to boost its defense budget, GE's heavy industrial business--which makes jet engines and other equipment--could get a big boost.

February 5, 2003
G.E. Buying British Consumer Loan Operation

For General Electric, the purchase of First National expands its reach into familiar territory at a time when concerns about consumer credit in Britain are reaching a fever pitch. Most analysts now acknowledge that the housing market is experiencing a bubble fueled by very low interest rates, and consumers have gone on spending prolifically even as the overall economy has begun to slow.

''One would rightly be concerned about credit risk,'' said David Hochstim of Bear, Stearns & Company. ''But these are businesses that G.E. has a lot of familiarity with.''

That was then. This is now.

September 20, 2007
GE taking massive hit to quit subprime market

GE said it will take a third-quarter charge of $300 million to $400 million to exit the subprime market.

July 15, 2010
GE's Immelt Boosts R&D Budget as NBC, Finance Shrink

Even if the products debut as planned, Immelt needs them to become hits quickly. They will make up a larger share of earnings because the percentage contributed by other businesses is decreasing as GE sells a majority stake in its NBC Universal unit to Comcast Corp. and shrinks GE Capital to less than a third of profit from about half in 2007.

Or how about this...

March 12, 2008
GE Releases 2007 Annual Report

“GE is different because we invest in the future and deliver today,” GE Chairman and CEO Jeff Immelt writes in his letter. “We are uniquely positioned to win in the essential themes of this era. We help to create the future and, by doing so, drive our own growth. We are a leadership company. We have built strong businesses that win in their markets. Together, our businesses deliver consistent earnings growth through the cycles. We are a high-performance company. We can harness ideas from across the Company to drive superior organic growth, margins, and returns. We are a company that develops leaders. Our team is experienced, and still they learn every day. Our bench is deep.”

One month later...

April 10, 2008
How to Fill a Predecessor's Big Shoes

Immelt says: "I had one good day as CEO—September 10, 2001—before the roof caved in."

Yes, indeed. He's not joking either. September 10th was a Monday. He became GE's CEO on the previous Friday.

Immelt looked backward and pretty much saw what I am seeing. GE's stock price on September 10, 2001 was $39.35. It now trades at $14.94. Not counting dividends, that's a 62% loss.

July 20, 2010
Poor Little CEOs

Consider Immelt’s General Electric. The conglomerate’s massive financing business, GE Capital, had relied on short-term borrowing in the credit markets for most of its funding—a business model that left it highly vulnerable in the fall of 2008. The Federal Reserve rode to the rescue by guaranteeing the vast commercial paper market, in which GE Capital was a significant participant. Then the Federal Deposit Insurance Corporation said it would guarantee debt issued by financial institutions, a new entitlement that GE embraced wholeheartedly. Today, GE Capital has $59 billion in such guaranteed debt outstanding (about one fifth of the total program as of May 31). Yes, GE Capital is simply using a program made available to many companies, large and small, and it has paid more than $2 billion in fees. But the company is receiving a huge subsidy courtesy of the taxpayers.

Yes sir. We clearly need more "forward-thinking" CEOs and boards to follow GE's example. That part where we the taxpayers subsidize GE's risky behavior? Genius!