It's not enough that Bill O'Reilly's Fox News Factor program bashed Immelt and GE yet again last night. It's become an almost twice-monthly event now, since he first did it in April, when I appeared as O'Reilly's guest to discuss Immelt's awful performance leading GE since late 2001.Now it appears that Immelt can't even sell GE's private label credit card business.
It seems, believe it or not, that when you want to unload a turkey, other people actually notice and shy away.
Imagine that! Didn't Immelt and his minions figure other business people can do the math, too, on GE's card portfolio's weak returns?
According to the Journal article, GE, which does a lot of card issuance and processing for so-called private label accounts, runs a card business which is riskier and less profitable than the average major bankcard- Visa and Mastercard- business at a large commercial bank.
These days, your local department store or big box chain's credit card is, in all probability, actually outsourced to GE for the operation of the program.
What I find, well, arrogant, is that the senior guys at GE, including Immelt, think that they can just nonchalantly dump their mediocre card business onto some other company- preferably a bank- and the buyer won't notice the portfolio's problems.
The Journal article notes that Chase and other commercial banks have now retreated from considering the purchase of GE's business.
It's one thing when you have a rare crown jewel in your company, or a well-performing misfit with the rest of your business portfolio, and you expect to get some interest from prospective buyers when you want to sell the business.
In this case, however, GE is trying to peddle an also-ran credit card business as the whole sector is experiencing rising chargeoffs.
These guys at GE just don't get it, do they? Not only are they not the smartest guys in the room. Everyone else is not just stupid, either.
How much longer will GE's board put up with Immelt's follies? Probably a long time. But shareholders can sell now, and contribute to a further slide in the company's stock price and total returns.
1 comment:
With the announcement of GE's Consumer & Industrial's entire unit being spunoff, Immelt has finally taking the "Electric" out of General Electric in Industrial America. What's worse, is that those that will be in charge of the new company, are the same one's that have run C&I into the ground. The same guys that created a mess with Powell Industries and GE, are the ones that will be in charge of the new company. The Ineptness will continue under a new name. Industrial America is at it's end!!!
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