GE Aerospace (GE)

[Porgie Tirebiter]

The Alstom disaster will remain a bleeding wound to cash flow. Baker Hughes was also a mistake, but the size of GE Power (formerly Alstom Power) magnifies it's effect on the company as a whole. It was irresponsible to negotiate a deal where they can't lay off anyone in France. That stipulation should have been a deal killer.

While GE didn’t specify where the job cuts will come, the bulk will be outside the U.S., according to a person familiar with the matter who asked not to be identified discussing the details. Positions in France won’t be affected due to stipulations in an agreement when GE bought Alstom SA’s energy business in 2015, the person said.

The power unit expanded considerably with the $10 billion Alstom acquisition, but the drawn-out deal has turned into a drag. Intended to broaden the product lineup with steam-turbine technology, the tie-up pushed GE Power’s workforce to 65,000 at a time when the market was slowing.

“Alstom has clearly performed below our expectations,” Flannery said last month, referring to the assets acquired from the French company.