This year, the leaders of General Electric (GE) will not find themselves in the luxurious Boca Raton hotel (Florida), where they were in the habit of holding their annual seminar. Their new boss, John Flannery, has announced the new, Friday, 20 October, presenting the disappointing results for the third quarter. These three days in a palace would have been very bad effect when he is about to unveil, on November 13, a recovery plan which will result, no doubt, by thousands of job cuts.
The successor Jeffrey Immelt, who was at the controls of the most powerful industrial conglomerate of the united states since 2001, has given it a taste. He stated that GE would give $ 20 billion in assets (17 billion euros) within one to two years in areas where it believes not to be in competitive advantage. The group is not struggling and has reached 8.2 billion dollars of profits in 2016. Between June and September, its net profit has however declined by 9.7% ($1.8 billion) because of the counter-performance of the divisions energy and oil services, related to the decline in investment groups for electricity and oil companies, but also restructuring expenses and impairment of assets.
“This has been a very difficult quarter,” admitted Mr. Flannery, who has taken command of GE in early August. “The majority of our businesses reported solid performances, but they have been relegated to a second plan by the decline in the performance of the energy in a difficult market “, as the equipment and services sold to operators of nuclear power stations or oil companies. The conglomerate (power plants, aircraft engines, medical devices, wind turbines, transportation, oil equipment, etc.) has had to announce a reduction of its financial objectives.
A strong pressure from shareholders
It builds on a generation of cash-flow…