GE Financial Chief: 'Not Losing Sleep' over US Slowdown
The chief financial officer of General Electric said Friday he is "not losing sleep" over the possible slowing of the U.S. economy, driven by troubles in the housing market.
"Global demand is fueling activity in the U.S.," said GE's Keith Sherin, in a phone interview. "There are some other buffers to housing. I think growth might slow, but I'm not losing sleep over that."
Sherin noted that GE generates about half its revenue outside the United States, helping it to report a 13.8 percent rise in third-quarter profit earlier Friday. He pointed out that GE's emerging market revenues were up 18 percent in the quarter.
"We're not so heavily involved in the U.S. consumer. We sell appliances, we sell lighting, and we do financing on credit cards, but it's a relatively small part of our total earnings," Sherin said. "Continued growth in the U.S., may slow a little next year but there are buffering factors to housing."
Sherin added that the GE still hopes to sell its WMC Mortgage subprime lending unit, which it is now treating as a discontinued operation, by the end of the year.
"Our current process is to sell it as an entity," Sherin said. "It does have a distribution footprint, principally in the West Coast and Texas...But we're down to $375 million of mortgages on the books.
GE put the WMC unit on the block in July after the subprime market went into a sharp contraction amid rising default rates.