By Vineeta Reddy
While most industries are attempting to build up their finances and expand, GE has the opposite goal in mind. It claims to want to become more of a “’simpler’ industrial business instead of an unwieldy hybrid of banking and manufacturing” (Yahoo). While this may seem like backwards thinking, the investors are actually in for a treat as almost $90 billion will be returned to investors as GE restructures. Furthermore, the stock actually jumped 8.5 percent after a plan was announced that “includes buying back up to $50 billion of its shares, selling about $30 billion in real estate assets over the next two years and divesting more GE Capital operations” (Yahoo).
This is certainly no small undertaking, and it is in fact the second largest repurchase agreement after Apple’s. GE was hit hard during the financial crisis, and this is an effort to return back to their basics. The CEO, Jeff Immelt, announced that GE hoped to make 90% of its profits from industrial production by 2018, thereby cutting out nearly all financial investment. By shedding some of their financial layers, they can return to their industrial roots and focus on making products that people love, which is in the best interests of both the producers and the consumers.