As the financial crisis in the US spreads its arms and companies around the world try to find a way to minimise losses, the $180 billion GE is not immune, said Jeffrey Immelt, its chief executive officer. The company’s financial arm will see a reduction in the scale of operations, even below the 40 per cent that has been announced, he said.
“Financial services is a great industry and it goes through its cycles,” Immelt said. “We’ve already said its going to be 40 per cent of the company and its going to be a lower percentage. That was already the strategy we were embarking on even before the crisis hit and we will continue to move on it.”
Immelt is concerned about the aftermath of the financial crisis as he sees the US economy entering into a recession. “If we are not in a recession, we're in something a lot like one,” he said. Consumer spending, he said, has been on a decline over the past two quarters.
“We are all cautious about what's going to happen with the global economy,” Immelt told NDTV in an interview. “We (at GE) are ready to go whatever direction we need to go.”
Immelt, who has led the company from the front for more than seven years now, acknowledged that it would have been the toughest phase in his career even if he were leading the company for 70 years.
Is the worst over? “I don’t know,” he said. “The best lesson learnt in this is that no one can predict the future. I am paranoid and we are ready for whatever eventuality might take place.” All’s not lost, however. “If you're an exporter like we are, there are still pockets of growth,” he said.