GE Powered the American Century -- Then It Burned Out



Posted by Ed 3 mths ago
They came by the dozens in luxury sedans, black Ubers and sleek helicopters. As they did each August, General Electric's most important executives descended on a hilltop above the Hudson River for their annual leadership gathering.

Just an hour's drive from New York City or a short flight from Boston, Crotonville, N.Y., is the home of GE's management academy, famed for culling and cultivating a cadre of leaders the company saw as its most valuable product.

Crotonville is where Jack Welch, GE's larger-than-life former chief executive, held his lecture sessions in "The Pit," a large sunken auditorium where he coached the future CEOs of companies such as Boeing and Home Depot. Welch remade and expanded the campus during his two decades running GE.


Ed 3 mths ago

Ed 3 mths ago
"The Collapse Has Begun" - GE Is Now Trading Like Junk

Two weeks after we reported that GE had found itself locked out of the commercial paper market following downgrades that made it ineligible for most money market investors, the pain has continued, and yesterday General Electric lost just over $5bn in market capitalization. While far less than the $49bn wiped out from AAPL the same day, it was arguably the bigger headline grabber.

The shares slumped -6.88% after dropping as much as -10% at the lows after the company’s CEO, in an interview with CNBC yesterday, failed to reassure market fears about a weakening financial position. The CEO suggested that the company will now urgently sell assets to address leverage and its precarious liquidity situation whereby it will have to rely on revolvers - and the generosity of its banks - now that it is locked out of the commercial paper market.

Ed 3 mths ago
What the Hell Happened at GE?

Few corporate meltdowns have been as swift and dramatic as General Electric’s over the past 18 months—but the problems started long before that.

Ed 3 mths ago
General Electric will be burning cash for years, JPMorgan says (GE)

General Electric CEO Lawrence Culp said Tuesday that he sees the company having negative industrial free cash flow this year as a result of its underperforming power unit.

The company's cash burn will stretch into 2021, according to JPMorgan analyst Stephen Tusa, a long-term GE bear.

Tusa says GE can tumble to zero if its negative free cash flow is fully priced in.

Ed 3 mths ago
GE's Stock Drops as CEO Warns of Higher Cash Burn at Its Troubled Power Unit

Trunarounds are rarely simple, straight-forward affairs—especially when they involve a troubled conglomerate like General Electric. GE’s stock fell 6% Tuesday after its CEO warned that the company’s troubled power-generation business would continue to be a drag on its financials again in 2019.

“This is a multiyear turnaround in power. I don’t want to sugarcoat that in any way, shape or form,” CEO Larry Culp said at a JPMorgan investment conference, according to the Wall Street Journal. “There’s a lot of work. It’s a game of inches.” In the meantime, the power business will cause GE to post negative free cash flows this year, he said.

Positive cash flows are a sign that a company is able to finance itself through money generated by its core operations. When cash flows turn negative, companies often need to raise more money by issuing new equity or debt or by selling assets. GE posted a positive free cash flow of $4.5 billion last year.

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