In Orlando, GE struggles to defend dividend cut
General Electric -- long perceived as one of the most reliable, well run companies in modern U.S. history -- came to Orlando this week to hold its annual shareholder meeting. GE, a conglomerate whose subsidiaries are big in defense, energy, consumer products, media (it owns NBC, MSNBC and CNBC) and entertainment (it co-owns Universal Orlando with the Blackstone Group.)
But GE CEO Jeff Immelt was hard pressed to offer the 600 attending shareholders a bright side to a company whose stock has been pummeled and whose dividend -- a Holy Grail of constancy for retirees -- will be cut 68 percent in the second half of this year to 10 cents a quarter. (AP photo: Immelt talks to one shareholder in Orlando.)
One shareholder who was not happy is Guy Labalme, a retired attorney in Tampa. He owns 56,000 GE shares and said the dividend cut would reduce his retirement income by 60 percent. As Labalme told the Wall Street Journal: "To me, GE, which I always admired, now means 'Go Elsewhere.'"
In a separate interview with the Orlando Sentinel, Immelt said that looming debt repayments at Universal Orlando should not jeopardize the co-ownership with Blackstone. And he said the coming attractions of Harry Potter (see illustration) and others will give the theme park new momentum.
-- Robert Trigaux, Times Business Columnist