its global reach
GE Capital Solutions has confirmed it is carrying out a
strategic review of its European operations that could result in
the loss of scores of jobs.
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The lessor last month told Leasing Life that it plans
to shed two-thirds of its Swiss workforce, believed to total around
200 employees.
GE would not comment on the future of a further 350 staff
based in the UK, although it did confirm that they had been
informed of the move to restructure. Following its review GE
Capital Solutions now plans to focus less on its smaller customers
and target more larger-end business sourced from companies such as
Dell and Canon.
“We can confirm that GE Capital Solutions has completed a
strategic review of its UK operations in light of the ongoing
global economic turmoil,” said a company spokesperson.
“As a result, the fleet management, equipment leasing and
commercial distribution finance operations will concentrate on
providing value-added solutions and services to mid, large and
multi-country customers across Europe. This will mean changes to
the UK organisation and we have written to employees to engage them
in the process.
” Of the Swiss job losses, the spokesperson told Leasing
Life: “I can confirm that two-thirds of our Swiss workforce
will be impacted. However, we will not be closing down our office
in Switzerland, but will continue to work with large local
customers and service pan European customers with operations in
Switzerland.”
The news comes on the back of GE’s Q2 results which posted
revenues of $7.4bn with profits of $903m, up five per cent from the
comparable 2007 period, for its global Capital Solutions division.
Conversely, its Real Estate operation – which sits alongside
Capital Solutions in the company’s Commercial Finance department –
drew revenues of $3.8bn generating profits of $960m.
Although profits in the Real Estate arm are down 8 per cent
year-on-year, they are higher than the profits produced by Capital
Solutions.This is despite the fact that Capital Solutions’ revenues
are far higher than those of Real Estate.
This suggests that Capital Solutions has high operating costs,
and could be one reason for its move away from small
enterprises.
Meanwhile, the US giant has announced a series of deals with
Mubadala, Abu Dhabi’s state investment vehicle, including an $8bn
joint venture to set up a commercial finance business.
“The deal with Mubadala comes after around four years of working
together on a range of investment and energy projects, including a
$1bn infrastructure fund that was created in 2006 between GE,
Credit Suisse and Mubadala,” said a GE spokesperson.
“The new $8bn fund will invest in a range of high return
financial services businesses and assets, across all sectors. This
is in line with CEO Jeff Immelt’s strategy of investing in high
growth, high return industries, geographies and sectors,” confirmed
the spokesperson.
The new entity, which will be modelled on GE Capital, will aim
to build its assets to more than $40bn over the next 12 to 18
months, investing in such sectors as real estate and
infrastructure.
In addition to financial services, the new partnership will see
Mubadala become one of GE’s top 10 institutional investors over
time. Furthermore, GE will be involved in developing and supporting
Masdar City – the world’s first zero-carbon environment – with
solar, water and other renewable energy technologies.
Paul Collett
