GE Capital’s ongoing attempt to
restructure itself into a leaner, more profitable company
is starting to take shape, says Jason T Hesse.
Following the announcement last July
2008 of a major reorganisation at GE Capital, the company has taken
steps to consolidate its business lines into a new structure,
called GE Capital EMEA.
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The new business, which incorporates GE
Corporate Financial Services (CFS) Europe, GE Capital Solutions
Europe, and GE Healthcare Financial Services (HFS) Europe, will be
headed by Rich Laxer and headquartered in London.
The Middle East and Africa region will also
fall under the new structure, including the $8 billion (€6 billion)
Mubadala joint venture, which will focus on growing GE Capital’s
commercial finance footprint in the region.
Restructuring Group
An internal memo from GE, obtained
exclusively by Leasing Life, also said that TIP Europe, GE Capital
Solutions’ global trailer rental business, and Rail Services
Europe, which provides rental, maintenance and funding solutions
for freight operators, will sit in the new Restructuring group,
reporting to Mark Begor, president and chief executive officer of
GE Card Services.
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By GlobalData“The businesses in Restructuring either have
assets that consume a lot capital, provide low returns, or do not
match our long-term portfolio objectives. The focus will be on
improving returns and/or exploring strategic options such as a
partnership or a sale,” said the memo.
In another recent communication to
employees, Rich Laxer added that “leasing remains a key component
of GE Capital EMEA” (emphasis in original document), and will be
looked after by Roman Oryschuk, who was president and CEO of GE
Capital Solutions Europe before the restructure.
Leasing
Oryschuk will look after all of the pan-EMEA
leasing accounts as well as the Commercial Distribution Finance
(CDF) businesses, which provide inventory finance. He will head the
leasing division on an interim basis, “for an undefined period of
time until a new senior leader is appointed”.
“[Commercial Distribution Finance] has had
some big cuts in the States as well, and internal communications
have not really convinced everybody that the business knows where
it will sit”
While the company says it is committed to
leasing, it is also understood that there is a lot of confusion as
to where the CDF business line will sit and to whom it will
report.
A decision has not yet been taken as to
whether CDF sill be a pan-European business, run by a standalone
European team, or if it will continue to have teams in-country for
individual markets.
“That’s been quite destabilising for a lot of
people because it’s uncertain what the future looks like,” said a
GE employee. “CDF has had some big cuts in the States as well, and
internal communications haven’t really convinced everybody that the
business knows where it will sit.”
The official line, however, remains that CDF
will remain part of the leasing unit under Oryschuk, but will
operate a hybrid model.
“We are finalising the exact organisational
design for Leasing and how CDF will be organised within it,” said
GE. “But CDF has operated a ‘hybrid’ model for some time, with
certain functions and processes reporting to local country teams
and other functions and processes reporting at a pan-European
level”.
