GE CEO sees signs U.S. economy improving, says Europe stabilized
March 10 (Reuters) - General Electric Co.'s chief said on Monday that there are signs the U.S. economy "is getting a little better each day," although he does not expect a return to the kind of growth seen in the 1990s anytime soon.
Jeff Immelt, chief executive officer of the industrial conglomerate, also said Europe's economy has stabilized. "While its expansion is anemic, the 'daily crises' have been eliminated," he said in his annual letter to shareholders.
Immelt addressed the global economy in his letter, published Monday. "Through the fog of the last five years, I would take the 2014 economy any day," he wrote. "The recovery is slow, but there are no major headwinds."
Immelt said pockets of Europe were "robust" for GE, including Germany, the Nordic region and Central Europe.
He said China "has massive financial strength, and we see its reform efforts as a positive."
GE's products include jet engines, gas turbines, oil pumps, locomotives and MRI scanners.
Immelt described his company as the "the largest and most profitable infrastructure company in the world," noting its more than $100 billion in revenue. All told, GE's revenues exceed $1 billion in 24 countries.
As it focuses on its industrial businesses, GE is de-emphasizing its GE Capital finance arm, including a spinoff of its North American retail finance business, for which a filing is expected later this month.
GE's stock was punished during the 2008 financial crisis because of its exposure to the finance sector through GE Capital. Immelt said GE has "repositioned GE Capital as a smaller and safer specialty finance leader with less leverage and more liquidity."
GE expects 70 percent of its earnings to come from industrial businesses by 2016, Immelt said, up from about 55 percent last year.
The CEO said the company was putting significant effort into simplifying its organization, including an expected reduction in administrative overhead cost by $4 billion between 2012 and 2016.
After a strong run in 2013, GE shares are down 7 percent this year, underperforming the broader U.S. market.