The $15 Billion Money Pit Dragging GE Down - Energy Watch News

The $15 Billion Money Pit Dragging GE Down

Jack Welch built it, Jeff Immelt milked it and John Flannery failed to fix it. Now Larry Culp must figure out what to do with the troubled remnants of GE Capital, the finance arm that nearly sank General Electric Co. a decade ago. So far GE — once the quintessential American conglomerate — just keeps stumbling from bad to worse. A big part of the trouble has to do with GE’s book of long-term care insurance, a vestige of GE Capital that backs policies which pay for things like home health aides and nursing-home stays. The problem is twofold. As medical costs soar and Americans live longer, GE’s assumptions about what it will have to pay out are proving to be too rosy. This year, the firm said it will need an extra $15 billion to cover future claims.  11/27 Bloomberg

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