YOU ARE HERE: LAT HomeCollections

GE reduces its divisions to 4 from 6

July 26, 2008|From Bloomberg News

General Electric Co. said Friday that it would reduce its divisions to four from six, reflecting Chief Executive Jeffrey R. Immelt's efforts to shed slow-growing businesses as the company's stock trades near a five-year low.

The main divisions will now be GE Technology Infrastructure, GE Energy Infrastructure, GE Capital and NBC Universal, the Fairfield, Conn.-based company said.

The new structure emphasizes Immelt's priorities as he tries to shield GE from economic swings by divesting consumer units and to exploit its role as the world's biggest maker of power-plant turbines and jet engines.

About $81 billion of GE's market value has evaporated since April, when Immelt disclosed a surprise first-quarter profit shortfall that he blamed on turmoil in financial markets.

One analyst expressed concerns about GE's move.

"I appreciate the idea of breaking up infrastructure to highlight the technology aspect," said Robert Schenosky, a New York-based analyst with Jefferies & Co.

"Where I do get concerned about the consolidation from six groups to four is the level of transparency we may get going forward," he said.

GE shares were unchanged Friday at $28.71.

Los Angeles Times Articles