By Scott Malone

(Reuters) – General Electric Co (GE.N: Quote, Profile, Research) plans to continue to shrink its finance arm, pulling back from consumer finance and reducing its real estate holdings, but Chairman and Chief Executive Jeff Immelt said on Wednesday he did not know how long the change would take.

The largest U.S. conglomerate expects the GE Capital unit’s profit growth to be at a single-digit percentage rate in 2013, rather than in double digits as it lowers the amount the unit invests outside GE’s core industrial operations.

“There’s just so many things that are out of my control on that, that it’s hard to make predictions,” Immelt told the Electrical Products Group conference in Longboat Key, Florida. “I’d like that to take care of itself both by industrial (earnings) improving and by Capital shrinking, but it’s just hard to predict the exact time period. But I think, in general, smaller’s better.”

While GE has been working to scale back the GE Capital unit it was still the largest of the company’s six divisions in terms of revenue and profit in 2011. It contributed $45.7 billion of GE’s total $147.3 billion in revenue last year.

The Fairfield, Connecticut-based company has had its hands full with GE Capital since the financial crisis, working first to make it a less-risky venture and then to convince investors and regulators that it had succeeded in doing that. One sign that it is succeeding came last week, when the Federal Reserve gave GE Capital the OK to resume returning a share of its profit to the parent company.

GE plans to use most of the $4.5 billion special dividend the Fed authorized to buy back the company’s shares, Immelt said. He aims to reduce the company’s shares outstanding to their level before the company raised $12 billion in new equity during the financial crisis.

May 23 (Reuters) – General Electric Co plans to continue to shrink its GE Capital finance arm, including largely pulling back from consumer finance and reducing its real estate holdings, but Chairman and Chief Executive Jeff Immelt said on Wednesday he did not know how long the change would take.

The largest U.S. conglomerate expects the unit’s profit growth to be at a single-digit percentage rate in 2013, rather than in double digits as it lowers the amount the unit invests outside GE’s core industrial operations.

“There’s just so many things that are out of my control on that, that it’s hard to make predictions,” Immelt told the Electrical Products Group conference in Longboat Key, Florida. “I’d like that to take care of itself both by industrial (earnings) improving and by Capital shrinking, but it’s just hard to predict the exact time period. But I think, in general, smaller’s better.”

GE Capital aims to use less short-term commercial paper debt to finance its operations, cutting the amount to about $25 billion, Immelt said. GE Capital had about $43 billion in outstanding commercial paper at the end of the first quarter, down from $105 billion in early 2008 before the financial crisis. At the time, the market briefly locked up and threatened the financial stability of the Fairfield, Connecticut-based company.

GE will replace the capital it raised through the short-term debt vehicles with alternative sources, including taking deposits, Immelt said. Its pending acquisition of insurer MetLife Inc’s online bank is intended to make the company less dependent on wholesale debt markets.

Immelt also suggested the company would be open to selling or spinning off its private-label credit business — a move it tried, unsuccessfully in 2008. But he emphasized such a move would only come when market conditions allow.

“Over the last three years since the crisis, we’ve told you what we were going to do and we’ve done it,” Immelt said. “What we don’t want to do is start getting out too far on things that aren’t in our control.”

May 22 (Reuters) – United Technologies Corp is confident that its $16.5 billion takeover of aircraft components maker Goodrich Corp will close in July, despite a continuing European Union antitrust review of the deal.

“We have good confidence … that we will close by mid- to late July,” United Tech Chief Executive Louis Chenevert told an investor conference on Tuesday. “We have been working aggressively with the customers, with the agency, for antitrust approval.”

That expression of confidence comes less than a week after EU antitrust regulators extended to Aug. 31 from Aug. 9 their deadline to decide whether to approve the deal.

“We have done the right things to wrap this deal up,” Chenevert said, though he declined to directly address the state of the antitrust review.

The world’s largest maker of elevators and air conditioners is also confident it will be able to close the sale of three small units that it put on the block in March — its Rocketdyne space business, the industrial arm of its Hamilton Sundstrand division, and its Clipper Windpower operation.

INTEREST IN INDUSTRIAL ARMS

Hartford, Connecticut-based United Tech aims to be in contract on Rocketdyne by mid-June and is “seeing very good interest in the auction process for the industrial businesses,” Chenevert said at the Electrical Products Group conference in Longboat Key, Florida.

BOSTON, May 21 (Reuters) – Burned by the memory of deals gone bad, top U.S. conglomerates including General Electric Co and Honeywell International Inc have backed away from big acquisitions, saying the risks of $10 billion takeovers aren’t worth it.

That is leaving room for smaller, hungrier rivals to move in. The latest example is Eaton Corp, which on Monday made an $11.8 billion bid for rival Cooper Industries Ltd – no small feat for a company with a $14.3 billion market capitalization.

Investors say the move, and a similar effort by Pentair Inc to double in size by buying the flow-control unit of Tyco International Ltd, carry considerable risks but may be necessary gambles.

“Big deals don’t tend to work out the way people think. There are a lot of unintended consequences of these things that you don’t realize until you get into the middle of them,” said Peter Klein, senior portfolio manager at Fifth Third Asset Management in Cleveland, Ohio, with funds holding a range of big industrial companies including GE, United Technologies Corp and 3M Co.

That is a lesson known all too well by Honeywell Chief Executive David Cote, who spent the past decade at the helm of the company cleaning up turf battles that were the aftermath of Honeywell’s 1999 acquisition by AlliedSignal.

BIG GUYS PLACE SMALLER BETS

Cote has looked at large acquisitions in his time at the helm, but has never been sure the risk was justified, he told a conference in Florida on Monday.

May 18 (Reuters) – Following the U.S. move to lift trade sanctions that had limited investment in Myanmar, Caterpillar Inc aims to use its financial services arm to boost its presence in the poor Southeast Asian nation.

The world’s largest maker of earth-moving equipment had already sold its bulldozers and excavators in the country through an independent dealer, but had to maintain an arm’s-length distance from that company due to the rules that prohibited direct U.S. investment.

“The opening up of opportunities with the decision on sanctions is something that will allow us to have a more traditional relationship with the dealer there,” said Jim Dugan, a spokesman for the Peoria, Illinois-based company.

The biggest change is that its finance arm — which accounted for 4.6 percent of its $60.14 billion in revenue last year — will now be able to lend money to its local dealer to help finance sales of Caterpillar equipment and expand its footprint in the country, which has huge natural gas reserves but an under-developed infrastructure after two decades of military rule, which ended after elections last year.

“There had been prohibitions on financial-services support, and as we understand it these would be lifted (with the suspension of sanctions) and we believe this will give us an opportunity to support that dealer better, to better allow them to expand and grow and support the customers in the market,” Dugan said.

Like many big industrial companies, also including General Electric Co, Textron Inc and Harley-Davidson Inc , Caterpillar operates a financial services unit intended to make it easier to sell its products.

Asia has broadly emerged as a weak spot for Caterpillar sales this year, largely due to slowing Chinese investment in construction and infrastructure. The company said in a filing with the U.S. Securities and Exchange Commission that its dealers’ sales in the region grew at just 5 percent in the three months ended in April, down from 20 percent in the three months ended in February.

May 18 (Reuters) – More cars, less coal. That sums up the shipping trends at the biggest U.S. railroads so far in the second quarter.

Three of the biggest freight railroads — Kansas City Southern, Norfolk Southern Corp and CSX Corp. — reported strong growth in auto shipments but weakness in their key coal-hauling businesses, as they gave mid-quarter updates to a transportation conference on Friday.

Kansas City Southern’s shipments of coal, farm products and chemicals were weaker than it expected a month ago, but the company kept its full-year profit forecast unchanged, saying shipments should pick up once the railroad moves past temporary factors.

“We had a much more positive outlook 30 days ago,” Chief Financial Officer Michael Upchurch told the Bank of America Merrill Lynch global transportation conference in Boston.

Second-quarter energy line-haul revenue, including coal, is now expected to be down by single-digit percentages, down from earlier expectations of double-digit grow th, the company said. Its shares were flat at midday.

Second-quarter line-haul revenue, which excludes fuel surcharges and other items, is a lso e xpected to be down in the agriculture and mineral category as well as in chemicals and petroleum. Kansas City Southern expects all categories to show positive sales gains for the year and the company reaffirmed its full-year forecast.

Norfolk Southern, whose shares fell 0.6 percent, said car shipments were up 14 percent from the end of the first quarter through May 12 and have also driven up shipments of steel.

BOSTON (Reuters) – Random inspections of U.S. industrial workplaces lower the risk of workers being injured on the job and have no measurable negative effect on the companies inspected, according to a study in the journal Science.

Companies chosen for random inspections by California’s Occupational Safety and Health Administration recorded 9.4 percent fewer worker injuries than those that were not inspected, the study found.

The study, to be published on Friday, also found that the companies inspected were no more likely to cut jobs, lose sales, have their credit ratings cut or go out of business than those that were not inspected.

Over its four-decade history, the federal OSHA has come under fire from both organized labor, which worries that it does not do enough to protect workers, and from big business, which argues that it imposes unnecessary costs.

An attorney representing the U.S. Chamber of Commerce told an April Senate committee hearing into whether OSHA moves too slowly in developing new regulations that employers view the agency as unresponsive to businesses’ suggestions.

“Too often there is a perception that OSHA is determined to pursue a new standard regardless of how it will impact employers or whether it is justified,” said the attorney, David Sarvadi of Keller and Heckman.

That sort of concern sparked the idea for the study, conducted by three professors from the University of California, Harvard Business School and Boston University.

By Scott Malone

(Reuters) – General Electric Co’s (GE.N: Quote, Profile, Research, Stock Buzz) finance arm won regulatory approval on Wednesday to resume returning some of its profit to the parent company, a move that came earlier than some analysts had expected and could clear the way for GE to speed up stock buybacks and raise its shareholder dividend.

GE Capital plans to pay a $4.5 billion special dividend to the largest U.S. conglomerate later this year, which investors described as a sign that its regulator, the Federal Reserve, has confidence in the unit’s financial position.

The finance arm emerged as GE’s Achilles heel during the financial crisis, prompting Chief Executive Jeff Immelt to launch a drive to scale it back and re-focus the company on its industrial core.

“It’s a strong vote of confidence that they’ve got the portfolio under control and are not worried about putting more reserves into it. In my mind, it takes a very big cloud off the GE story,” said Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisors in Cincinnati, Ohio, which holds GE shares. “It will allow a lot of income-equity investors to go back and re-evaluate the GE story.”

GE shares rose 2.4 percent, or 44 cents, to $18.84 in early trading on the New York Stock Exchange.

“We thought the Fed would make them wait until 2013 depending on a lot of uncertain variables,” Bernstein Research analyst Steven Winoker wrote in a note to clients. “The earlier and indeed larger nature of the dividend for 2012 is a positive surprise in our view.”

By Scott Malone

(Reuters) – General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) said on Tuesday it was buying two mining equipment firms, Australia’s Industrea Ltd (IDL.AX: Quote, Profile, Research, Stock Buzz) for $700 million as well as a privately held U.S. company, as it seeks to boost its presence in a $61 billion industry.

Chief Executive Jeff Immelt has stepped up GE’s presence in resource rich countries, including the oil-rich Middle East, although the company has stepped back from large-scale acquisitions after making an $11 billion wave of takeovers in the energy sector in 2010 and 2011.

In addition to Industrea, which makes equipment used in the underground portion of mines, GE has also signed a binding letter of intent to buy Fairchild International of Glen Lyn, Virginia, for an undisclosed sum.

The two businesses will be folded into GE’s transportation unit, which also makes railroad locomotives, heightening that division’s competition with fellow U.S. blue chip Caterpillar Inc (CAT.N: Quote, Profile, Research, Stock Buzz). GE already makes power systems, as well as water purification equipment used in mining.

Industrea mainly sells to customers in Australia and China – two markets that Fairfield, Connecticut-based GE has highlighted as key growth opportunities, said Lorenzo Simonelli, president and chief executive of GE Transportation.

“Australia is an interesting marketplace for us and for the rest of GE,” Simonelli said in an interview. GE will aim to distribute its products to a wider range of countries, he said.

NEW YORK/BOSTON, May 15 (Reuters) – Private equity firms TPG Capital and Carlyle Group (CG.O: Quote, Profile, Research) are separately considering bids for United Technologies Corp’s (UTX.N: Quote, Profile, Research) industrial units that make pumps and compressors valued at $3.5 billion to $4 billion, according to people familiar with the matter.

The sale is one of three that the diversified U.S. manufacturer is trying to close to raise cash and avoid issuing new common shares to fund its largest-ever acquisition, the $16.5 billion purchase of Goodrich Corp (GR.N: Quote, Profile, Research).

TPG and Carlyle are each interested in buying the businesses

– part of United Tech’s Hamilton Sundstrand arm — as a whole. – part of United Tech’s Hamilton Sundstrand arm — as a whole. This could make them serious contenders in the race, as rival company bidders are interested in buying either pumps or compressors but not necessarily both, the sources said.

When United Tech initially put the industrial units on the block in March, along with its Rocketdyne space and Clipper Windpower operations, Chief Financial Officer Greg Hayes estimated that the sale of all three units could raise about $3 billion.

“To the extent that you can have your buyers bidding up the price, it’s advantageous for the company that is selling the business,” said Daniel Holland, an analyst at Morningstar who follows the company. “For shareholders, it’s beneficial to have that number continue to go up,” he said on Tuesday.

Hartford, Connecticut-based United Tech decided to sell the three units after shareholders objected to an earlier plan to sell up to $4.6 billion in new common shares to fund the Goodrich deal.