The Slimming Down of GE Capital

For years, General Electric could count on its finance unit, GE Capital, to provide some earnings muscle when other divisions at the industrial giant wavered. But when the financial crisis hit in 2008, rightly or wrongly, GE Capital—by then with assets equaling those of the sixth-largest U.S. bank—found itself lumped in with Wall Street banks and other complex financial companies.

Ever since, GE Capital’s heavy exposure to finance has weighed on the parent’s share price, still down almost two-thirds from its 2007 high. Some investors have hinted GE would be better off financing only its own products and selling the bulk of the finance unit. That, Chief Executive Officer Jeffrey Immelt has made clear, won’t happen. “Everybody’s going to have their own point of view on GE Capital and the financial crisis,” says Immelt. “I look at it in a macro sense and say we never had an unprofitable quarter. We came out of it as best we could.”