GE Is Finally Trading Its Bankers’ Stripes for a Hard Hat
With the $30 billion sale of the largest remaining business of once-dominant GE Capital, the company bets that green power generation and aviation will be more financially stable.
Despite its storied history as an industrial icon founded by Thomas Edison, General Electric Co. by a decade ago had morphed into a massive financial-services company bigger than all but a handful of U.S. banks. That transformation brought with it a maddeningly complex web of businesses, opaque accounting, and financial risk that dogged it for years. So when Chief Executive Officer Larry Culp on March 10 announced a $30 billion deal to unload GE’s aircraft-leasing business, the move returned something long absent from GE: simplicity.
Jet lessor GE Capital Aviation Services, or Gecas, was the biggest remaining business of GE Capital, the once-sprawling financial-services company that in 2010 had more than $600 billion in assets. After the unit’s sale to Irish rival AerCap Holdings NV closes a year from now, GE plans to transfer what it says are just $21 billion in remaining GE Capital assets onto its industrial balance sheet. It will also stop reporting results for GE’s financial-services, industrial, and combined businesses separately, streamlining the complex financial reports that fueled criticism that trouble could—and sometimes did—lurk for years in those accounting statements before revealing itself.