GE Capital: Divest, keep, or something in-between?
I would argue for in between. GE ought to divest the parts of its finance business that are not needed to help sell the large-ticket items such as turbines and jet engines that are made by GE’s industrial businesses.
If this were done, what would be left is a finance operation similar in size and scope to the finance subsidiaries of such blue-chip companies as BA, CAT, and DE. The finance subsidiaries of these companies help sell airplanes, tractors, and agricultural combines, and they are relatively low-risk because they don’t venture into unrelated lending just to make a buck.
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