WAUKESHA — As
investors speculate whether General Electric’s financial woes will
lead to a wholesale breakup of the company, local leaders are
working to ensure that whatever future awaits the corporate titan
includes Waukesha County.
Paul Farrow said Wednesday that his office is working with the
Waukesha County Center for Growth on the issue, and has also reached
out to company officials.
announced last June that it would be closing its Waukesha engine
plant in 2019 and moving some 300 jobs to Canada, its medical device
wing, GE Healthcare, employs about 3,100 people in the Waukesha
area, Farrow said.
includes those employed at the division’s headquarters in Waukesha
and at offices in Wauwatosa, he said.
“When you look
at GE, it is such an incredible corporate steward in this region,
and has been so for a long time. Our goal is keep them, whatever the
new entity might look like,” Farrow said.
“I know we are
very early on in the conversation, but we have already reached out
to individuals at GE to say ‘You guys know what we have: We have an
incredible county. We’ve got some of the lowest unemployment in the
country. We have an incredible workforce that’s here. What can we do
to help you guys realize that this is where you want to have the
health care entity?’”
$15 billion hit
Tuesday that GE will pay out $15 billion for miscalculations made by
its insurance subsidiary North American Life & Health is what has
sparked conversations about a possible company breakup.
Part of GE’s
Capital division, North American Life & Health helps cover the risks
assumed by insurers that sell policies to consumers.
stopped writing new policies in 2006, but just before that it
reinsured about 300,000 policies covering the long-term health care
of people in the final years of life.
underestimated how much it would cost to pay for the care of those
policy holders who lived longer than projected.
The mistake was
magnified by low interest rates that reduced the returns on the
premiums the subsidiary collected.
known that the problems at North American Life would result in a
financial hit to GE since last year, but the impact turned out to be
about five times more than anticipated, RBC Capital Markets analyst
Deane Dray told the Associated Press.
‘‘This is deeply
disappointing,’’ GE CEO John Flannery acknowledged.
GE’s stock fell
55 cents, or nearly 3 percent, to close at $18.21 Tuesday on the
probably would have been more severe if Flannery had not hinted that
GE might take the radical step of splitting up the main company’s
three main components — aviation, health care and power — into
Founded in 1892,
GE has already has shrunk dramatically since it became entangled in
the financial crisis a decade ago, and Flannery has previously vowed
to shed business units worth more than $20 billion over the next
year or two.
In a Tuesday
conference call, Flannery told analysts that there has been an
ongoing review of how to wring the most value from GE’s disparate
businesses since he succeeded Jeffrey Immelt as the company’s CEO
five months ago.
‘‘All options on
the table, no sacred cows,’’ Flannery said during the call.
— The Associated Press contributed to this