Conglomerates

GE could take a leaf from Elon Musk on CEO pay

5 Oct 2018

There’s little worth emulating in the recent antics of Tesla’s erratic boss. But his long-term pay plan, while outsized, is tied to several ambitious performance metrics. That’s more defensible than GE offering Larry Culp up to some $226 mln for hitting stock-price targets alone.

Cox: Wooing of GE is lesson for wannabe Amazon HQs

4 Oct 2018

Lured by inducements and hangars for its CEO’s jets, the group quit Connecticut in 2016 for Boston. GE has since incinerated over $150 bln of value and shed businesses, leaving less for its new home. Yet it continues to inflame politics in the place it left. Bezos buyers beware.

GE investors have been here before

2 Oct 2018

The conglomerate’s shares rose after it named Larry Culp as new CEO – much as they did after previous new starts. Once again, there’s room for disappointment. The weakness in GE’s earnings may go beyond its power division, and Culp may have to cut the dividend.

GE brings life and meaning to the word culpability

1 Oct 2018

The stumbling industrial group replaced its newish CEO with former Danaher boss Larry Culp, while taking a $23 bln hit on its power unit. By holding John Flannery accountable and expunging his predecessor’s legacy of dealmaking, GE’s board has shown welcome, if belated, spine.

Jack Ma’s exit plan just raises more questions

10 Sep 2018

Alibaba says CEO Daniel Zhang will succeed the $420 bln group's co-founder as chairman in 2019. Planning ahead is laudable, but the sketchy blueprint, after a baffling interview, leaves worries over the top job and Ma's influence unanswered. It's one step forward, two steps back.

Jack Ma’s next moves will instruct China tech

8 Sep 2018

The charismatic co-founder of Alibaba says he plans to retire. It’s a sign of the $420 bln company’s maturity that others are ready to step up, unlike at rivals like scandal-hit JD. But he will still wield huge influence. Investors will want clarity on who really holds the reins.

The Exchange: Beth Comstock

29 Aug 2018

Over two decades at General Electric, former Vice Chair Beth Comstock had a window seat on the industrial group’s attempts to adapt to changes in technology and markets. She popped by Times Square to discuss GE, and how she became the company’s most senior female executive.

Korean chaebol overhaul runs into economic reality

28 Aug 2018

Seoul’s antitrust chief unveiled new rules to rein in powerful family conglomerates. Slowing growth, however, has made the likes of Samsung even more important to the country’s jobs plight. That means governance reform probably will wind up weaker than originally anticipated.

Stake sales could ease CK Hutchison’s debt drag

3 Aug 2018

The ports-to-telecom conglomerate reported strong first-half results. But recent large acquisitions have left new Chairman Victor Li facing a mounting debt pile. Selling part of its Watsons health and beauty chain or Husky Energy would ease the burden without yielding control.

GE put a little too much imagination to work

1 Aug 2018

The shrinking conglomerate may offload parts of its digital business. GE had targeted some $15 bln of revenue by 2020 on the back of the Predix software initiative, and a CFO once dangled the idea of “infinite returns.” It’s a sobering moment for the internet-of-things hype.

GE’s clean sheet reveals real turnaround challenge

20 Jul 2018

A 30 pct fall in earnings in the latest quarter represented a victory of sorts for boss John Flannery’s restructuring. There were no big writedowns, a rarity in recent times, and cost cuts are ahead of schedule. But two of his three core businesses are still in serious decline.

New GE lacks money-back guarantee for investors

10 Jul 2018

John Flannery’s breakup plan could boost the shares of the conglomerate he runs by one-quarter, a Breakingviews analysis suggests. The unenthused reception from the market may be down to GE’s history of unforeseen charges, and the fact it will retain many old problems.

Chinese tension whips up a new chip super-cycle

5 Jul 2018

Micron suffered a fresh setback after a rival said a mainland court banned the $60 bln company from selling some circuitry in the country. Even as booming demand pushes prices up, legal battles and China’s quest for homegrown tech amid trade strains are reshaping the industry.

Cox: If GE can break up, so can the United States

28 Jun 2018

Over a century the industrial conglomerate became too unwieldy to manage, unaccountable to stakeholders and financially undisciplined. Sound familiar? What works for corporate America could be applied to the government of a divided country showing similar symptoms of distress.

GE breakup ushers in brave new era

26 Jun 2018

CEO John Flannery is spinning off the ailing $111 bln conglomerate’s healthcare unit and selling Baker Hughes, ending more than a century of growth. Focusing on aviation and power has risks, but the plan slashes debt and makes GE manageable. It was Flannery’s only logical choice.

China’s $2 bln electric car rescue is an odd turn

26 Jun 2018

A subsidiary of property giant Evergrande has agreed to bail out a troubled U.S.-based Tesla challenger. Faraday Future’s Chinese founder Jia Yueting gets breathing space, but why Chinese or U.S. regulators would clear this deal is a puzzle. Investors may be celebrating too soon.

GE’s small ball merely delays tough decisions

25 Jun 2018

The conglomerate is selling its distributed-power unit to buyout shop Advent for $3.25 bln. It brings CEO John Flannery closer to his divestment target but doesn’t really cut debt or bolster earnings. That will require bigger sales or spinoffs, and probably another dividend cut.

SoftBank’s $5 bln staff whip-round could backfire

20 Jun 2018

Masayoshi Son’s team could kick in that kind of money, using big slugs of debt, to help the Vision Fund hit $100 bln. Having so much skin in the game might prod the giant investment vehicle to spend more cautiously. It could also spell employee disillusionment if deals blow up.

Dow Jones ejection is least of GE’s worries

19 Jun 2018

The charter member of the iconic benchmark stock average is being replaced by drugstore chain Walgreens due to slumping profit and a withering share price. It could make CEO John Flannery’s turnaround bid harder. Investors can only hope it will spark the radical changes GE needs.

ThyssenKrupp can forge better steel deal with Tata

14 Jun 2018

The German group has outperformed its Indian rival since they agreed a European steel joint venture last year, and now produces more than twice as much EBITDA. Tata could pay cash or give up dividends to close the gap. Walking away from the hefty synergies would be too painful.