I warned after the Lehman bankruptcy that General Electric would be in trouble.
I called GE the ultimate unknowable stock because of the risk inherent in GE Capital, a bank which provides more than half of the company's revenue and is highly exposed to consumer credit. As our country has fallen into a serious depression, these issues have become terribly profound and GE's stock has already fallen precipitously.
Yesterday, GE Capital announced that it is laying off 15% of its worldwide workforce, or 11,000 people on top of over 60,000 people that GE is laying off.
I once worked for GE Capital. I found the culture insidious and am sure that the 11,000 people being laid off have worked their asses off for the last several years only to wake up and find that they are being lectured about how they are not up to stuff by some Stamford Ct.-based snobs. These same folks will have told them how wonderful they were two years ago and convinced them to put all of their 401k monies in GE stock.
The culture throughout GE Capital and inability accept their own faults runs right to the top of GE's larger culture. It ultimately will prevent them from addressing a balance sheet at GE Capital which is unknowable. It may prevent them from taking real corrective action until it is too late.
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Related Articles:
The End is Near for GE by Herman Kline - Feb 20, 2009
Is General Electric Next? by JDonahue - Mar 07, 2009.
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