General Electric (GE) is getting ready for greatness by doing a very typical thing, going on a diet. The company is reportedly poised to sell a $30 billion real estate portfolio. Part will be sold to private equity firm and financial institution Blackstone. Wells Fargo will purchase the rest. The deal includes warehouses apartment buildings, factories and malls, as well as other commercial properties around the world. In addition the deal might include substantial loans said anonymous sources. There was no mention as to if any other players were involved in the portfolio sale.
The transaction might go through and be publicly announced as early as Friday. If everything works the way General Electric, Blackstone, and Wells Fargo have planned this deal may be the biggest real estate sale since the financial collapse of 2007.
GE, which is best known for its light bulbs and ovens, is seeking to return to its basic manufacturing core rather than have as many side ventures. The company plans to focus on building things such as turbines, medical equipment, and engines.
On April 9, the company’s stock rose 2.9 percent after the Wall Street Journal reported rumors of the deal with Blackstone and Wells Fargo. Hopefully, this will be a turnaround for the company which has always been a hit or miss in regards to investor sentiment overall. Additionally, there has consistently been a group of investors who are always willing to dish out vitriol towards the company.
A part of those big things General Electric is ready to do will surely involve the Internet, as more and more of life and business in general tends to do. These changes may involve a more organized repair schedule for household appliances or more efficient machine to machine communication. For example, a consumer’s refrigerator could realize that their owner was nearly out of milk and then it would e-mail their iPad, work e-mail, and even text their phone so that the same person would no longer have any excuse for forgetting to pick up milk on the way home.
Furthermore, these networked computers along with the software and sensors that run them are likely to add $10-$15 trillion in the gross domestic product (GDP) by 2035, according to General Electric predictions. The company also recently opened what it is calling the first in its line of “flexible” factories. This particular factory is located in Pune, India. Its 67 acre campus will employ 1,500 people, all trained in how to use the latest technology from 3-D printers to laser inspection tools. This campus will be the first to produce parts and products for multiple General Electric endeavors. Such activities may include building components for jet engines and locomotives, as well as assembling wind turbines, and water treatment units for applications as diverse as oil and agriculture.
The factory will allow GE to get the most out of the equipment it purchases, because all parts will be made in one location as well as allowing the company to ramp up or decrease production as particular parts of its business endeavors warrant. No more will the decrease in one company process mean layoffs and resettlement for workers. Any bugs in software can be corrected quickly, because the people who wrote the software will be on the same grounds as the people who test the products. Combining forces in that way is one more example of how General Electric is ready for a great future.
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