GE Capital Split Four Ways
GE Capital, the financial services division of General Electric, is being split into four separate entities, with the goal of streamlining management and providing direct communication between the executives who will now run the new businesses, according to Jeffrey R. Immelt, chairman and chief executive officer of General Electric.
Immelt said in a statement that he wanted to have direct contact with the financial services teams, which generate 40 percent of the company’s earnings.
The split should also make the financial operations more transparent to Immelt and investors.
“I have envisioned having more direct contact with our financial services team since I became chairman and chief executive officer last September,” said Immelt. “This will create a clearer line of sight on how our financial services businesses operate and enhance growth. Our external reporting will mirror this organizational structure, providing greater clarity for investors.”
A byproduct of the split, effective Aug. 1, will be four new chairmen/CEOs: Michael A. Neal for GE Commercial Finance; David R. Nissen, for GE Consumer Finance; Arthur H. Harper, for GE Equipment Management; and Michael D. Fraizer for GE Insurance.
“With this simplified structure, the leaders of these four businesses will interact directly with me, enabling faster decision-making and execution,” said Immelt.
The split will also effectively eliminate the position of chairman and CEO of GE Capital, previously held by Denis J. Nayden. However, Nayden will still be attached to the company as a senior advisor to Immelt and will serve on the GE Capital Board of Business Development.
GE Capital Services Inc. and GE Capital Corp. will remain as legal entities and the major borrowers of funds necessary to support all of General Electric’s financial services activities. Their boards will continue as platforms for reviews of operations, transactions and capital allocation among the four financial services businesses.
General Electric is a diversified technology and services company that creates a range of products from aircraft engines and power generators to financial services, medical imaging, TV programming and plastics, operating in more than 100 countries and employing more than 300,000 people worldwide. —Darryl James
