Commentaries

Now raising intellectual capital

Frank shines some light on G.E.

The price of reduced political risk? For General Electric, it’s worth some $6 billion of added market value this morning.

G.E..’s finance arm, GE Capital, had a investor presentation on Tuesday that was impressive on many fronts but not entirely convincing on the regulatory outlook. Obama’s proposed financial overhaul, as outlined in the June white paper, would force the company to spin off its giant finance arm, resulting in higher taxes and increased costs

But Representative Barney Frank, the powerful chairman of the House Financial Services Committee, told Bloomberg News late Wednesday that the Obama administration’s planned financial overhaul did not necessarily mean that industrial companies like General Electric or Harley-Davidson would need to spin off their finance problems.

“This particular arrangement is not part of the problem,” Frank told Bloomberg, echoing the arguments that GE Capital executives made on an investor call on Tuesday.

G.E. waits for Washington to drop the ball

Gridlock in Washington is not always welcome, but General Electric appears to have placed much of its hopes for GE Capital on it.

The fear hovering over GE Capital has been that Obama’s proposed financial overhaul, as outlined in the June white paper, would mean that the company will be forced over five years to spin off its giant finance arm, resulting in higher taxes and increased costs. During an investor conference webcast today, GE Capital went into great detail to address concerns about losses and capital needs, but offered little more than wishful thinking when it came to the regulatory outlook.

You know Jack

Jack Welch, still a corporate icon even as the luster of the Imperial CEO has dimmed, is getting into online education. The former General Electric chief executive is investing $2 million for a 12 percent stake in Chancellor University, the Wall Street Journal reports. As part of the deal, the school’s MBA program will be named the Jack Welch Institute. Welch and his wife, Suzy, will have some hands-on involvement, helping to recruit faculty and shape the curriculum.

Given the reputation of online education, Welch’s involvement promises to either improve the industry’s image or tarnish his own. Douglas McIntyre of Wall Street 24/7 says it is as bad as “Julia Child putting her name on a McDonald’s outlet.”

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