Jun 23, 2009
General Electric opposes any regulation that would force it to split off from GE Capital, its finance business, CEO Jeffery Immelt said in a memo to employees according to Reuters.
Some investors and analysts said the Obama administration’s proposed restructuring of the nation’s financial regulatory system could force GE to sell or exit its GE Capital unit, which has businesses ranging from leasing commercial aircraft to investing in real estate.
“One proposal in particular, pertaining to the separation of banking and commerce, has led to some media speculation that, if enacted, could require the separation of GE and GE Capital,” Immelt said in the memo.
“It is very early in the process, and Congress will now spend months reviewing and drafting legislation. We are certainly opposed to it, since this issue had nothing to do with the financial crisis,” he wrote, according to Reuters. “GE is and will remain committed to GE Capital and we like our strategy.”
The company is already trying to scale back its GE Capital unit, which accounted for half of the conglomerate’s profit in 2007. Immelt has said he plans to downsize the unit so GE would rely on it for just 30 percent of earnings.
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DOTC - Why is this important?
GE Capital finances a huge percentage of office equipment leases - you probably have many customers working with them already.
This could be big for those of us who offer leasing.
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