General Electric Net Income

[Samurai Appliance Repair Man]

Yowzah!  So, banks (including foreign banks), which make nothing but fiat currency out of thin air, are getting bailed out to the tune of $12.8 trillion (of debt money also created out of thin air), but companies that make real stuff, like GM and GE, are imploding.  Regardless of what you think of GE appliances, they do make real things as opposed to the bogus, synthetic garbage from the "Masters of the Universe" on Wall Street. 

News Alert from The Wall Street Journal:

General Electric's first-quarter net income fell 35% to $2.8 billion, slightly beating analysts' estimates, as revenue declined 9% to $38.4 billion. The company's capital finance division earned $1.1 billion in the period, down 58% from a year earlier, while NBC Universal also had a tougher performance due to a soft advertising market.

http://online.wsj.com/article/SB123995742769428779.html#mod=djemalertNEWS

[completeapplianceservice]

Yeah, i know that they have had their appliance division on the market for sometime. Probably trying to get rid of the branches that are holding them down.

[dbiberdorf]

GE is suffering because fully 1/3 of the company is basically a bank.

http://money.cnn.com/2009/06/29/markets/thebuzz/?postversion=2009062912

And, to make it better, they're taking bailout money:

http://business.theage.com.au/business/hybrid-ge-gets-in-on-banking-bailout-20090629-d2lu.html

[Alfred]

       My Grandfather started selling GE appliances in the 50's.  In the 60's you could sell a GE oven bake switch for $10, and make $5!  As a youngster, I was around the store often.  One time, I went on a call with one of the men.  We removed the motor from a dishwasher, took it apart, (you could do that back then) installed a new start winding (from Grainger, I recall) put the machine back together, and collected around $12 or so.  GE was good back then, as were, I suspect, most of the brands.  There were trips and tours offered, even (especially) to the small dealers, and they supported you well in all areas.  There were even parts "seminars"  where they came right to Bangor and wined and dined you. 

      We stayed exclusively with GE through their rotary compressor fiasco in '88, but in '96 when their washer (the "Launch of a Lifetime") transmission brake failed miserably, we finally took on other lines.  Interesting to note in these two situations, as some may remember, GE denied any trouble whatsoever, until their world literally crumbled around them.  I recall my sales rep, Greg Pennell, insisting that my men didn't know what they were doing.

     The Maytag Neptune cave-in chiseled away at my remaining confidence in the retail side of things.  I decided it was time for a change, and I liked the repair side better anyway.  When they all claimed that their quality was improved (remember GE's "Six Sigma" program..) but like dominoes fell to a one year warranty on everything, well, actions spoke louder than rhetoric.

      When I finally gave up the franchise, GE had resorted to outright lying, you had to carry $20,000 in display inventory (mostly product you couldn't give away) in order to get competitive pricing, and then they'd change a model number by a letter or two and offer it to Home Depot (etc.) after telling (lying to) you that it was an independent dealer exclusive.  Depot would offer it at about what we paid for it.

       I figured I couldn't beat em, so join em, i.e. I'll try doing more warranty, all brands.  But the box stores would exchange, loose, mis-date, etc. so the Service Power - Service Bench chase got so bad we were ready to start shooting.  People like Jeff Thompson at WLPL threatened that if I wouldn't do warranty for $60 or so per call (we flat rate most calls at $100) he'd close the account.  I wouldn't, so he did.   I'm fortunate in that I have plenty of work, but it is unfortunate that the industry has taken this turn.

       I do enjoy the service and parts business, (no warranty, thank you!) but I have no sympathy for these manufacturers, who have all cheapened their product beyond imagination, complicated their product beyond belief, (GE alone had 350 models of refrigerators) and sell their product on every street corner with zero regard for service and support after the sale.

        You got a great site here!  I know the amount of work that involves, and I salute you!

Al

[Pegi]

Al, what a great post,  very interesting.  Thanks for taking the time to write all of it.  You are a great tribute to our industry. Pegi

[denrayr]

[user=533]Pegi[/user] wrote:

Al, what a great post,  very interesting.  Thanks for taking the time to write all of it.  You are a great tribute to our industry. Pegi

i agree, i like hearing about the way things used to be done. I love the thought of being able to make component level repairs like replacing a motor winding, you get to make more profit off the part and charge a little more labor while keeping the repair affordable.

[RegUS_PatOff]

[Samurai Appliance Repair Man]

Great post and good read, Alfred. Fascinating to hear the sorry history of the appliance giants fall from grace. Domo!

[Alfred]

I see where both Whirlpool and Electrolux (Frigidaire, etc.) have suffered the worst years in their history.  I guess they're all suffering.  It should be interesting to see what transpires.....

Al

[GErepairman]

Here's the latest (news on GE's 3Q results):

Finance arm pushes down General Electric 3Q profit

By STEPHEN MANNING (AP) – Oct 16, 2009

General Electric Co.'s troubled financial unit dragged down third-quarter earnings 44 percent, overshadowing gains in divisions that make power plant turbines and household appliances.

The results from one of the world's largest companies show the spotty strength of the global economy. While "signs of life" are emerging — profits are up for some industrial goods and services — consumers and businesses are still reeling from large numbers of defaults in credit cards and mortgages.

"The global environment is improving, but we are expecting a gradual recovery," GE Chief Executive Jeff Immelt cautioned on Friday after the company posted its results.

GE's quarterly profit fell to $2.4 billion, or 23 cents per share, hurt by sharply lower earnings at its GE Capital arm, which loans money for businesses ranging from credit cards to shopping centers. A year earlier, the company earned $4.3 billion, or 43 cents a share.

GE's overall revenue dropped 20 percent to $37.8 billion, coming up short of what Wall Street was looking for.

GE Capital reported an 87-percent drop in profit. But without a big tax gain, the finance arm would have posted a significant loss. Its commercial real estate unit lost $538 million and profits declined across GE Capital's remaining businesses, including credit cards. The unit has overall losses and asset value write-downs of $9.3 billion this year.

GE's industrial businesses, however, showed some modest improvement in the third quarter, which runs from July through September.

Profits edged up 4 percent, helped by higher prices for power plant turbines and cost-cutting in the company's household appliance business

In a positive sign, the total value of equipment orders climbed $741 million from the second quarter. GE also did a brisk business fixing up turbines and jet engines that its customers already own.

Still, the company's industrial sales declined 13 percent from 2008, an indication that demand is still down.

GE is reshaping itself as it tries to move beyond a tough year. It is shrinking its dependence on profits from GE Capital, beefing up industrial business, and exploring ways to spin off assets like NBC Universal.

The company is relying on its industrial side — whose divisions build dishwashers, sonogram machines, locomotives and oil pipeline equipment — to help it rebuild profits following the recession, which began in late 2007 and has burdened the U.S. economy with huge job losses, a tight credit market and sharply lower home values across much of the nation.

GE is also in talks to sell a sizable part of its NBC Universal entertainment division to cable company Comcast Corp.

Immelt reiterated Friday that GE is exploring "strategic partnerships" among its possible options for NBC, but did not confirm any talks. He said the company had no immediate need for the cash such a deal could bring in.

NBC's fate is partly up to the French media conglomerate Vivendi, which owns a 20 percent stake. Its annual window to decide to dispose of its share begins next month, and there is speculation it wants to unload NBC.

GE Chief Financial Officer Keith Sherin said in an interview that Vivendi has told GE it is "actively considering" whether to exit the partnership. That is different from in past years, he said.

NBC Universal spans the NBC and Telemundo broadcast networks; cable channels such as Bravo and CNBC; the Universal Pictures movie studio and Universal theme parks. The cable networks have been among the strongest performers. Meanwhile the NBC network is fourth in the ratings, Universal Pictures has had so-so box office results, and the recession has lowered attendance at Universal theme parks.

NBC has suffered from a decline in advertising, but the unit posted a bigger profit last quarter. Most of that was from a gain from the sale of a third of GE's ownership in A&E network.

The past year has been a painful one for GE, as it slashed its dividend for the first time since the Great Depression to save cash and lost its coveted top credit rating.

Shares of Fairfield, Conn.-based GE fell 73 cents, or nearly 4.3 percent, to $16.06.

Copyright © 2009 The Associated Press. All rights reserved.