Being unsentimental means not just gazing at the vivid picture these charts portray, but actually diong someting about it.
Not only was GE Capital as a percentage of GE shrinking, but of course the regulatory environment for too-big-to-fail institutions (“SIFI’s” in the unlovely coinage) was also becoming parlous. This is exactly the kind of exogenous change I was alluding to when I opened this column. The FT put it bluntly in its headline on the deal: GE Capital succumbs to the regulatory climate.
In deciding to rid GE of financial services, Immelt was doing nothing so much as taking seriously John Maynard Keynes famous observation, paraphrased by history as “When the facts change, I change my mind. What do you do, sir?”
And since you asked, the stock market loved it: GE was up 11% on the announcement, to a level not previously seen since before the Great Meltdown. What Immelt has done at a stroke is as decisive, and as simple, as transforming the company he inherited from Jack Welch: Call it back to the future if you care to, but GE, the longest surviving member of the Dow 30 industrials, is once again 90% an industrial company.
So I leave you where we came in: Have you really (really) looked at your firm lately? And what are you going to do about it?