At the helm of GE
Once nearly as routine and immutable as its dividend and its triple-A rating, General Electric CEO Jeffrey Immelt could be counted on to step up and calm the markets when things got rough. He who guides the biggest corporate bellwether of the U.S. — nay, global — economy was to the markets what baseball, apple pie and Chevrolet were to the United States.
Now that auditors at Chevrolet parent GM have called into question its ability to stay in business, and baseball’s biggest star has admitted once being a doper, apple pie seems to be all we have left of this particular cliché of Americana. And even dessert may not be safe from recession-spending cutbacks at the kitchen table.
So back to the question of GE: facing a possible downgrade after bowing to market realities and cutting its dividend, is Immelt’s job in jeopardy? CFO Keith Sherin sat down on the conglomerate’s business TV network, CNBC, to talk financials and assure markets the company would weather the storm just fine. GE’s finance unit has no short-term liquidity issues, and speculation about its ability to maintain sufficient capital is “overdone,” he said. Sherin also said it would take an “incredibly disastrous economic situation” for GE to seek money from the government’s Troubled Asset Relief Program. Many would describe the current economic outlook as precisely that.
One can gaze at the tea leaves and wonder whether the decision, presumably Immelt’s, to put CFO Keith Sherin on CNBC was a sign that the big chief is in trouble. Or perhaps trucking out other top executives is meant to bolster Immelt by spreading the exposure risk executives run when hitting the airwaves. Markets took Sherin’s comments positively, pushing GE shares higher in pre-market trade, so whatever plans behind plans there may have been, on the surface they seem to have worked.
Deals of the Day:
* WellPoint, the second-largest U.S. health insurer by revenue, has put its pharmacy benefits management (PBM) business up for auction, the Financial Times reported.
* British convenience-food maker Uniq Plc said it had agreed to sell its loss-making UK chilled fish business for an initial 1 million pounds to The Seafood Co Ltd to focus on profit-making businesses.
* Manila Electric Co may see a battle for control after an investor group led by the chairman of PLDT bought about 6 percent of Philippines’ biggest power retailer, media reports said.
* The Norwegian government said it had finished purchases of StatoilHydro shares after raising its stake to a planned 67 percent.
* The chairman of Citic Group, China’s top financial conglomerate, said Spain’s second-largest bank BBVA has a strong desire to raise its stake in CITIC Bank.
* China’s Shougang Iron & Steel is in talks to buy Shanxi-based Changzhi Iron & Steel, which has an annual capacity of 4 million tonnes, Shougang Group Chairman Zhu Jimin told reporters.
* The parent of Dalian Port Co will buy Jinzhou Port this year, the mayor of the northern city of Dalian said.
* Wall Street bank Goldman Sachs said it has no plan to sell its 5 percent stake in the National Stock Exchange of India, refuting a local media report.
(PHOTO: Jeffrey R. Immelt, chairman and CEO of General Electric, listens to a question during a news conference in Kuala Lumpur September 27, 2007. REUTERS/Zainal Abd Halim)