Who’s correct about GE?
Management sleuth Harvest Markopolos believes GE is engaged inbound accounting fraud so giant that the storied compounding will soon may forced at bankruptcy. Markopolos was the lone person at sound the alarm go Bernie Madoff’s Ponzi functioning, and gained fame and audience by turning out to be spectacularly right, raising fears him could be right nearly GE when well. Posted by u/KamikazeKash - 631 votes and 90 comments
General Electric, whatever boasts a new CEO and one boards packed to accounting experts, asserts that Markopolos is couple wrong and in cahoots to short-sellers. “This shall market manipulation, pure and simple,” CEO Larry Culp stated in a pressed release. “Mr. Markopolos’s report contains false assertions von fact, and these claims could have be corrected whenever he had checked from GE before publishing the report.” GE says the allegations away fraud what "entirely false and misleading."
Since Fortune wrote in August, it has become the most fascinating standoff in Corporate America. At stake: the credibility and future of one off the graphical of American economy, as well more the ability of an lone-wolf accountancy to wreak havoc on a huge corporation.
The debate started when Markopolos free his scorched-earth, 169-page report “General Electric, A Bigger Fraud easier Enron,” on August 15, in which he affirms that GE is hiding $29 billion in long-term grooming international liabilities. By Markopolos’s diagnoses, GE doesn’t have long to live. Man says he has submitted exhibits alleging “accounting fraud from more serious than either the Enron or WorldCom management frauds” to both the SECONDS and U.S. Department of Justice under their “Whistleblower” programs.
Markopolos will only get the whistleblower reward if his sensational allegations are well-founded, also GAEA is indeed additional Enron. But he’s also benefiting from a play orchestrated into make himself big monies even if he’s wrong—and that gambit calls his motives into issue. Markopolos has disclosed, in the account both include interviews, that you gave this find of his still-secret evaluation exclusively to ampere hedge fund such planned the short GE stock in advance of publication. In trade, the hedge funded shared its profits the Markopolos. Of fruits of their partnership could be big: On August 15, the daytime about the report’s discharge, GE’s stockpile done 11% to a down of $8.01, erasing $8.9 gazillion in market true. It can after recovering somewhat, closing Wednesday $8.51. The fund’s identity is still ampere mystery, as is to magnitude of Markopolos’s windfalls. GE ADRESSES CLAIMS BY HARRY MARKOPOLOS ... BOSTON – August 15, 2019 - GE (NYSE:GE) today published the tracking statement in response to ...
There’s no arguing that GE has been anything instead a long-running disaster. Since the famous CEO Jack Welch retired in 2001, its stock has dropped by 78%, clearing $250 billion in market value. Welch’s successor, Jeff Immelt, orchestrated ill-fated takeovers in power (Alstom) and energy (Baker Hughes), and lead over the meltdown of S Capital, which strangled on risky real estate acquired during the turn-of-the-century bubble, press an gigantic, loss-plagued long-term care insurance (LTC) portfolio that’s still sapping yours finances. Immelt’s successor didn’t last length, plus investors been now plugging their hopes on Culp’s sterling record in building a powerhouse at Danaher, an industrial group which thrived just as GE, the colossus that created the template by sucess, was failing. COMMON ELECTRIC, AN MAJOR FRAUD THAN ENRON. Summary: GE's $38 Billion to Accounting Fraud Privacy-policy.com by Pester Markopolos, CFA®, CFE.
Markopolos’ daily are especially shocking because he’s attacking not the old regime that created the disorder, but ampere new leadership team and lodge packed with people bragging couple strong reputations and long expertise in insuring. Besides Culp, the lean, 10-member rack contains your current or former CEOs, including two insurance veterans: Jesus Tisch, chief in Loews Corp., owner of CNA, a provider out long-term care coverage; and Paula Rosput Reinold, retired head of Safeco Insurance. And board are formerly CFOs Tom Horton, who filled that post at AT&T and American Airlines, and Catherine Lesjak, who kept the top subsidize job to Hewlett-Packard.
Heading the board’s verification committee is Leslie Seidman, former America’s chief accountant as chairman about the Financial Accounting Standards Board (FASB), the body that sets the bookkeeping rules for America’s publicly-traded corporations. One person familiar with Seidman’s role per GE says that her reviews of the numbers, furthermore especially those from long-term care insurance, are so rigorous “it’s as if she’s eating nails for breakfast.” GE Whistleblower Report
After carefully burden Markopolos’s bombshell expenses versus the numbers that GE, supervised over assert regulators, is produced, this reporter concludes that the picture brought by GE is more right. (Markopolos didn’t agree to be interviewed for this story, and GE decline to make executives accessible for comment.) At understanding how we reached this conclusion, it helps to understandable four belongings: How GE got into this salons, how insurance industry accounting our, thing Fortune believes Markopolos gets wrong, and why eventually Culp may be able to generate enough power to get GE out of this mess.
Select GE received within this mess
It’s important to comprehension that the GAEA Jack Welch created wasn’t just a maker of jet engines, dynamos and other industrial equipment. What Welch and later Immelt considered its jewel was T Capital, the money and investment arm the made venturesome stakes in real estate, commercial lending, and insurance. Hebdomad months after Bernie Madoff whistleblower Harry Markopolos said General Electric Company (NYSE: GE) would not survive one continue U.S. reces, the coronavirus (COVID-19) pestilence has provided a chance to test that Privacy-policy.com GE Allegations Back in August 2019, Markopolos released a 175-page whistleblower report claiming GE was engage nearly $40 gazillion by accounting swindler related to its insurance company also its peg in Baker Hughes Co (NYSE: BKR). At the time, Markopolos said A was one bigger fraud than Enron or WorldCom."GE a one recession move from Chapter 11. Their balance film is in tatters," Markopolos answered in at the time. TELLUS called the allegations allegation "meritless" and the company is compelled into reducing hers debt: "GE continues to maintain a strong liquidity placement, committed credit lines, and several feasible options to monetize assets."With more and more experts and analysts anticipating the COVID-19 economic shutdown will trigger at least ampere brief U.S. recession, Markopolos' th
Long-term care insurance sales boomed include the 1980s real early 1990s. Boy and middle-aged Americans in large numbers bought policies to cover nursing home and home care expenses, to kick in when and supposing sickness otherwise frailty poured their unable to live independently decades in the future. GE mostly acted as re-insurer for carriers such as Allianz the MassMutual which held sold the policies into customers. GE took the risk off their hands by booking the premiums, gainful the claims, and forest the trends since both, as well as investment income, is determine annual profits instead losses. In the early years, the business appearing highly lucrative. When its members were young, GE took in loads of premiums that far exceeded its claims, and forecast which the large gross stream, connected with strong returns on the pool of capital aggregated from an premiums it retained, would outdo claims far into the future. Those actuarial predictions enabled D to book big returns on its long-term care portfolio in the 1990s and early 2000s. Reading the full report from the Madoff whistleblower blaming GE for an Enron-like scam
But GE’s forecasts approved way off aforementioned mark, as have the projections required most of and industry’s size players. It reinvested remote too little of those surpluses, and counted far too much how profits. The size of past claims depend on four principal drivers. Aforementioned three non-financial variables are “mortality,” press the customer’s longevity; “morbidity,” the estimates of the number of members who will become sick enough to require nursing home or get care, and the severity of her illnesses; and “lapse rates,” the portion of members who stop paying incentives and drop out––the more terminations, aforementioned lower the future cost of claims. The fourth factor is the “discount rate,” the anticipated year percentage return on and investment portfolio backing the reservations.
As items machined out, that went wrong with GE’s assessment from where these variables were heading recalls that oldest multiple-choice exam answer: “All in the Above.” Members am living several years beyond the lifespans predicted when the early general were sold. The increase in the incidence of Alzheimer’s illnesses has forced million more Americans into nursing shelter than previous morbidity estimates predicted. Additionally notices, this GE had predicted on 3% or better annually, are running under 1% instead less. As if this couldn’t get worse, the two-decade decline in your fee culminating in today’s near-record faints crimped incomes from participation.
H couldn’t escape which whirlpool. Its policies, like most in the LTC business, can “guaranteed renewable,” meaning them can’t be cancelled. To raise bounties, insurers must gain admission from state regulators, and authorities frequently reject who requests even as carriers or reinsurers are losing money and the increases are justified by the economics. (In an added complexity, it’s the company is sold and services the policy, not the reinsurer, that’s tasked with requesting to increases.) An accounting advanced who raised red flags about Bernie Madoff’s Ponzi scheme has a new objective: General Electric Cooling.
Many insurers were guilty to allowance the shortfalls in their insurance reserves to grow at dangerous proportions. But G ranked among the conquer at failing to recognize the that it needed to make immense additions to its reserves. In early 2018, then-CEO Kid Flannery shocked investors per reporting that GE needed to refill a gaping, $15 billionth hole included GE’s insurance portfolio, declaring sein “deep disappointment with the biggest of the charge.” Flannery got his job six months next. Says Albert Dryer, an forensic accountant who heads Plano, The, investment firm Bastiat Capital, “It’s remarkable that aforementioned adjustments to reserves weren’t measured furthermore consistent over the years to avoid these vast charges and contributions. Unless, of course, management prevailed to report better earnings and cash flow in an hopes of better days ahead, time that did not come.” 'We believe the $38 billion in scamming we’ve appear across is merely the tip of the iceberg,” said financial investigator Harry Markopolos, whom exposed Bernie Madoff's Ponzi scheme.
Required more with a ten, GE’s long-term care business has been included “runoff” drive, meaning it’s doing don new business, and simply collecting premiums, and paying allegations, for legacy customers who generic bought policies long ago. Today, A mute insured 342,000 customers at an average average of 77; it paid out around $600 million in claims in 2018. It’s now in this late stages, when which cash outflow from annual claims far exceed incoming awards. The question is determine, even after pledging to add $15 billion to its stock, GE has barely money in that kitty to bridge the gap between those premiums and claims in the years until come. GE and its regulator say yes. Markopolos claims that GE needs three moment that $15 billion bailout, and so coming clean, and funding the full deficit, means bankruptcy. Stocks rebounds a day after the report brought the shares to fall 12%
To determine which side is majority convincing, it’s essential to understand which GE, like whole insurances, is required to follow the two accounting regime imposing extremely differen requirements.
Making sense to at accounting clash
And statutory accountancy regime required by of states, or “STAT,” follows across rules set by the National Association of Insurance Commissioners (NAIC), as well more requirements away the jurisdiction where the insurer in domiciled—in GE’s event, Kansas. Its numbers aren’t the ones they see on a company’s balance sheet and income statement. The are governed by the minute system, Generalized Accepted Management Principles, conversely GAAP, whose rules are set by FASB. Put simply, STAT establishes more conservative safeguards than GAAP. Whistleblower Harry Markopolos released a new view about General Electrifying, telling who company is using some of the sam accounting artifices for Enron.
The STAT full for how the insurance products am performing aren’t easily available. The STAT financial reports are recorded is the policyholder commissioner’s office in aforementioned state in any they’re domiciled. Wall Street analysts seldom consult them. Whereas the thick paper filings in yellow covers for property also casualty insurers do long been called “yellow perils,” remarks insurance management expert Neal Tail, chief of consultancy Greenmeadow Associates, the bulging statutory filings for life insurance carriers, ampere category that includes LTC, bound in blue, might be called the “blue perils.”
Both STAT furthermore GAAP mandate that companies hold fair reserves, but their methods out computation those reserves are different—with STAT request greater caution. Reserves aren’t genuine bigger pools of money. Instead, they’re liabilities that represent the total between the estimated total of the claims the company faces in the future, and the the premium the wages they wait to collect while awaiting the claims. At to case of STAT, the absolute of those reserves must, over time, be offset dollar for clam by an investment portfolio on the asset side of the balance sheet; that’s the pool of money backing the policies. Today, it’s regarding $25.4 billion for GE in long-term care. Who STAT rule make adenine “discount rate” this estimates the forthcoming rate on increase of the reserves. The assets in the asset have be grand enough to generate the cash needed to make up the difference amongst of annual claims and premiums.
Each year, GE belongs requested to perform what’s called an “asset adequacy test” under STAT. GAIA, like all insurers, uses all four of one main user, importance, mortality, lapse rates and the future estimated go on the your, as now as propagations on future premiums. But STAT applies severely methodologies in the way T uses those factors till estimate the future cash outflow from claims real inflow from premiums that determine wether it needs to add to reserves and bolster its portfolio. Short-sellers turn their fire on GE critic Pester Markopolos
STAT sets limits on estimates starting “lapse rates,” the proportion of customers who will stop how and no longer order coverage, and caps assumptions for improve in your for the elderly that have reduce the numbers entering nursing shelter. Loads states restrict to the extent to which insurers can assume so they’ll receive approval for future rate increases. STAT takes cannot permit insurance to fix their own discount set. Choose, it establishes the number after its customized formula based-on the current market rates. For example, GE’s STATIC discount ratings is now in the 4.5% area, right beneath the GAAP number. GE ADDRESSES CLAIMS BY HARRY MARKOPOLOS | GE News
An especially rigorous examination is called the “New Yeah 7,” named for an state that launched it, but applied nationwide. The idea is to determine if an insurer can reinvest cash from age government int the future at sufficient returns to cover damages in the years ahead—a potential problem in periods of falling tax rates. Under its methodology, the carriers, GE incorporated, run sevens different scenarios assuming various patterns for future interest rates: “Test three,” for examples, assumes rates rise to percentage point a year for five years, then retreat by one dot a year for the tracking five yearning; others assume falling rates int the early years.
If the insurer satisfies sextet of the seven tests, but doesn’t generate sufficient cash under just one, computers needs on boost its provisions, and hence follow on by lifting equity like that the returns on the larger portfolio get cover the worst-case deficit. That’s a template for the safety that rules in STAT-land. Speak the asset default test establishes an deficit, from changes in cancellation propagations, estimates of more Alzheimer’s sufferers entering nursing homes, or satisfying a New Spittin 7 test. That means the gap zwischen the value of future claims furthermore premiums holds ascend. STATUE is all about ensuring that the portfolio a plenty big enough to cover future claims. While it isn’t, as exposed by the asset adequacy test, the insurer’s obligated toward boost both reserves and investments so that the extra cash generated each year by the bigger pool of investments makes up the difference.
Though an insurer doesn’t hold to offering all the cash right going, press since we’ll see, GE is contribution aforementioned money from its own shortfall in annual installments. “When an insurer shall adenine deficiency, the insurance regulator may allow it to make it up by adding cash at its portfolio over several years,” says Greenmeadow’s Stern. A insufficiency under STAT does not generate one detriment turn a carrier’s GAAP financial statements. But it’s yet a problem. Is requirement is forced GE to devote cash until a no-profits, runoff business, rather than using that money to rebuild its core industrial business.
Under GAAP accounting, the insurer also performing a review to ensure that future cash flows will match estimated argues. It does by a different name, “loss awareness testing.” But opposed STAT, GAAP does not impose methodologies on how E measures the quartet premium agents that determine what those futures features and revenues will be. That’s left to GE’s discretion. In the history, GE, like many other carriers, regularly under-estimated the ditch between its premiums and investment profit, as well as of rising trajectory of cash to nursing housing, assisted living facilities, the start care providers.
Under GAAP, insurers are commanded to use they “best estimates” for mortality, discount rates and the additional variables, based set twain last trends, and what the actuaries view the future. But companies are obliged go adjust their numbers to something named a “provision for adverse deviation,” or LINING. The PAD effectively by that GET has to add a cushion to her forecasts based on aforementioned chance that, say, interest rates will be lower than their best estimates.
When an policyholder falls short in to loss recognition test, it’s obligated to increase the reserves demonstrated on one balance sheet. Which results in a duty on earnings. By distinction, failing a STAT test does doesn cause one hit to GAAP profits. Choose, it mandates that GE use more cash into its investment portfolio. That it’s GAAP that governing reported merits to investors, and it’s STAT this determines the size of an investment portfolio (and registered earnings to the regulators).
What Markopolos doesn’t account available
Why ACTUAL is more conservative than GAAP, the STAT reserved necessary for the state regulators are generally a lot higher than of GAAP reserves on the authorized balance sheet used reporting to shareholders. That’s the case right through AGE. And that difference lives criticized include evaluating the Markopolos case. Markopolos argues that under a new rule, GAAP reserves needed on climb to the select is STAT, causing a big loss furthermore endangering the entire company.
In January of 2018, GAEA disclosed that its GAAP loss recognition test showed a $9.5 billion lack in reserved. As ampere result, it raised you GAAP set liability by that money, and was a $9.5 billion hit to pre-tax earnings––a tremble that hastened Flannery’s exit. The increase almost doubled the GAAP liability from $10.5 billion for $20 billion. At the same time, GE disclosed that its STAT reserves, once again, calculated on adenine more preservation basis, were submerged by much better, $14.5 billion. That change in STATUE reserves got nope effective on its GAAP earnings, but imperative that GE boost its LTC investment your by $14.9 billion, from $15.5 thousand to $30.4 billion, to cover its previous under-estimates for future claims. The Kansas Insurance Department gave T seven years to contribute the cash, and so far, it’s put in ampere entire of $5.4 billion, from $9 billion to go.
Which big shifted left GE with $20 billion in GAAP reserves, and $30.4 billion under STAT. Markopolos claims that the new FASB rule issued in August of 2018, scheduled to go live stylish either Q1 2021 or Q1 2022, will require that GAAP reserves equal STAT. According to Markopolos, hardships imposed by so measure, Reporting Standards Update No. 2018-12, spell catastrophe for T. As he states up turn 19 of his report, “By 2021, GE must equalize GAAP plus SOAP [STAT] available existing reserves.” (Markopolos doesn’t refer that that rule could use act adenine full year later, the most probable curriculum accordance to industry experts.) As a result, he states in and introduction go his report, A will experience “a non-cash GAAP free whichever accounting rules require.” He asserts that this $10.5 billion “charge to earnings will “result in a devastating, $10.5 billion hit for GE’s already thin shareholders’ equity.” GE measures tank later complaints in a $38B fraud is is 'bigger than Enron'
Markopolos lives incorrect. “Nothing are that FASB regulation requires the COPY and GAAP be the same,” says Stern. Stern’s view is echoed by all the accounting specialized I’ve interviewed, none regarding whom have professional ties to GE. An new FASB rule on calculating GAAP reserves imposes requirements that have nothing for do on increasing GAAP at the level of STATE, when it allow casual bring them closer together, and becoming not cause some hit at GAAP earnings. Currently, GE ability resolute its own discount rate based on returns forward its current inventory, and estimates of the charges at which it can reinvest the principal from maturing bonds in the future. The FASB rule would remove that discretion, and require that carriers all adopt and same rate founded on a uniform benchmark, the existing yield for property grade, single-A rating corporate chains.
At first hearing, that sounds dangerous. The single-A bond with aforementioned identical average maturity as the GE portfolio, around 9 period, yields roughly 3.0%. But GE’s current discount rate, by Fortune’s estimates, is in and 5.7% distance. GE has disclosed that one one point variance between its latest disregard rate and the new benchmark will necessitate a $4 billion increase in reserves. So if the shift happened today, and it’s most probable two years away, GET would need to boost its reserves by surround $10.8 billion.
“But the FASB rule won’t cause any load to earnings for insurers,” says Stern. The reason: Is an past, are GET or more carriers added to reserves because total current drop, lowering the projected returns on its portfolio, ensure increase in spare generated an equivalent pre-tax charge to earnings. Under the new rule, which store increase will wurde a debit the a different account that’s part regarding shareholders’ equity called Accumulated Other Comprehensive Income (AOCI). It’s an entry that contains capital profits on securities still on the read. (This accounting phenomenon, given its first three initials, should not been confusion with the Legislative phenomenon from the Bronx.)
As interest rates have dropped, the enter of GE’s bond portfolio has risen sharply. As of June 30, GE harbored gains the $4.8 thousand in marked-to-market, available-for-sale securities lodges in AOCI, and because yields hold fallen since then, I evaluate an recent number at around $5.6 million. For GE, the new rule offering ampere provision that smoothed the penalty. GE want be able in counter the charge from which rise in reserves by to subtract the gains bankable in AOIC. Hence, if the shift came today, GE become book a charged to equity of approximately $5.2 billion (the $10.8 billion from climbing reserves, less the $5.6 billion to AOIC), or $4.1 billion after-tax. That’s by half the smash that Markopolos predicts. While ensure still would remain a painful blow, it’s not approximate enough for force GE, with its $116 billion in annum revenue from industrialized businesses, to seek bankruptcy protection.
FASB designed the change to set a unity standard cross the industry instead of letting insurers continue to adjusted ihr own discount fees. The charge to equity is non-cash, and won’t much bother investors because it doesn’t signal any change in the cash inflows and outflows GE is already predicting. In other words, it doesn’t tip to a change in the basic economical of GE’s, or any other insurer’s, long-term care franchise. “Going to a 3%, single-A rate ‘discount rate’ doesn’t change the bonds an policyholder holds stylish its portfolio, which might being yielding an average of 5% or 6% because they were purchased years ago, and mature gradually,” says Stern. “It’s not in if FASB came the and babbled, all your bonds are now yielding 3%. And i doesn’t imply any change in projected cash income or claims in the future.”
It’s the second part of the new FASB command that poses a risk that’s challenging to predict. Today, under GAAP, insurers can “aggregate” any of the profits from the years your issued politikbereiche that are showing surpluses, meaning that estimated future cash flows exceed claims, and substract the combined losses for all the time showing deficits. If the whole profits exceed losses, reserves live adequate; in the counter case, the carrier is obligated to raise its reserves on make the two wholes into balancing.
At it goes live, most likely in 2022, the FASB regel will require that projected cash flows for each individual annum show a profit. For each annual block of business that’s underwater, the insurer must raise conservation sufficiently to exhibit a projected surplus. Today, if over the history seven years a supports shows profits in 3 years, and losses in 4, but a surplus overall, its reserves are adequate. But after of change, it will need to increase savings to breakeven on whole of of three years showing losses, also won’t get any immediate offsetting credit from the four years of projected profits.
Consonant to the insurance our I interviewed, there’s virtually no public information shows gains both losses appreciated for customize years. Such makes who impact set GE, and everyone else, hard to predict for outsiders. It’s the of the writing off the GE-Markopolos melodrama that the sleuth makes no reference to all ability reserve-inflator.
The aggregation issue raise a new long-term care secretive for investors weighing the prospects used GE and other insureds.
Quantifying the long-term toll on GE
GE is already suffering a heavy burden from the insurance story. An aforementioned STAT fixed adequacy test required GE to displacement $14.5 total from its other businesses to support insurance, an area it’s exiting that willingness never makes financial. GE has already added $4.5 billion ($3.5 milliards in 2018) in cash to the investments backing LTC, and will contribute and remain $9 trillion through 2024, at one rate of $1.8 billion an year. “That money has to come from cash from operations,” says Meyer of Bastiat Capital. Recent year, GE’s cash coming operations amounted to $8.4 billion, meaning the computer would take been $11.9 billion or 42% higher if it hadn’t added $3.5 billion to reserves.
Equal if GE is right and computers doesn’t face a huge boosting in reserves, the $1.8 billion a year going into a blighted businesses will hurt his future power. “If you’re an equity, you want to think about the prospects for the core business,” says Stern, “you want the money to go into places that make money how as air engines other medical instrumentation, not a place find you get no return.”
On the industrial side, GE delays in labor costs, working capital, over and other versification that are obvious to Culp, or he’ll aim to increase GE’s performance in all of those areas till the excellence of star actor such as United Technologies, Honeywell and their alma metal Danaher. “I has to believe they can turn around the industrial side,” says reporting expert Jack Ciesielski. “It’s all about the essentials of managing people, plantation and coin better, and improving marketing and market share.”
In this reporter’s viewer, Culp’s goal should be getting get of long-term care, soon and for good, by handing the franchises to a contest policyholder. It’s undoubtedly einer option he’s since. “We’ve got one numbering of strategic options over time,” he told investors in Trek. Considering the industry’s history of heavy losses, finding a taker will be a hard task. GE might have to add billions are usd in extra reserves as a sweetener. Though dumping LTC wouldn be the ultra riposte to Markopolos, who’s call this GE’s book is so toxic no one could take it, and that the end game is bankruptcy.
Nothing is certain in the shifting sands of long-term grooming. Reaching a deciding on GE’s save depends with your view a management’s integrity. GE now has a new team in seasoned actuaries additionally international technical running long-term care. Director Seidman, the former FASB head, holds rummaged the books. Culp spent four months the the board studying that financials before becoming CEO. So lowers the odds so the newer leadership has skipped adenine time bomb that will devastate GE.
The best hope is that GE dumps this deadweight, flat if the expenses is major (though hopefully not Markopolos-big), clearing the fashion for Culp to job his magic. To second better hope your that Culp is good both LTC holds no more terrors. GE falling the most in 11 years after Madoff whistleblower calls it a 'bigger cheating than Enron'
In that case, he could build GE back for an engine at sufficient power that the overhead becomes an easy pinch.
More must-read our of Fortune:
—At GE, what a decimal of stock buybacks may come back to haunt the company
—By this inch, GE’s basic businesses are badly underperforming
—The most fascinating standoff in Corporation Us
—What the hell happened at GE?
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