General Electric's annual meetings are typically upbeat affairs as executives showcase the company's successes to satisfied shareholders...
General Electric’s annual meetings are typically upbeat affairs as executives showcase the company’s successes to satisfied shareholders of one of the world’s most diversified and successful companies.
But after GE Chief Executive Jeff Immelt was lambasted earlier this month for failing to hit first-quarter goals and triggering a sell-off that wiped out more than $46 billion of GE’s market capitalization, Wednesday’s annual meeting was essentially a mea culpa to investors and analysts alike.
“This has triggered a tough reaction and it should,” Immelt told about 1,000 shareholders. “I can assure you that we look in the mirror and ask ourselves some very tough questions.”
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Immelt worked to reassure shareholders less than two weeks after GE reported a 6 percent loss in first-quarter profits. The surprising report came a month after GE promised investors 10 percent earnings growth in 2008.
Bank of America
Countrywide deal is criticized
Beleaguered Bank of America shareholders pleaded Wednesday with the bank’s chief executive not to proceed with a $4 billion acquisition of distressed subprime mortgage lender Countrywide Financial.
Shareholders told CEO Ken Lewis at the bank’s annual meeting that they were concerned about the company’s position in a weakened economy and bearing the brunt of a collapsed stock price.
Lewis acknowledged the housing crisis wasn’t over but said Bank of America paid a fair price for Countrywide and continues to perform deep due-diligence.
The two-and-a-half-hour meeting came two days after the nation’s second-largest bank reported a 77 percent drop in first-quarter profit of $1.21 billion, largely because of missed payments on credit cards and home loans.
Bankrupt company will be auctioned
Sharper Image, the bankrupt seller of $300 electric shavers and $2,000 massage chairs, will put itself up for auction by the end of next month, the company said.
“We’re going out, we’re talking to people and trying to generate some interest,” said Robert Del Genio, a principal with the turnaround firm Conway Del Genio Gries. that has been hired to help sell Sharper Image.
The 31-year-old retailer, which sells household gadgets from air purifiers to car-navigation systems, filed for bankruptcy Feb. 20, saying it planned to close about half of its 184 stores while reorganizing.
Pension fund head is stepping down
The nation’s largest public pension fund says its chief investment officer has decided to step down.
The California Public Employees’ Retirement System, known as Calpers, said Wednesday that Russell Read plans to leave his post on June 30 to pursue investing in environmentally friendly technologies. Read joined Calpers in June 2006.
Calpers says its board plans to meet soon to discuss appointing a successor to Read.
The pension fund has more than $244 billion in assets.
Lists of states for plant narrowed
Volkswagen said Wednesday it has narrowed its list of states competing for a potential U.S. production facility to Alabama, Michigan and Tennessee.
The German automaker said it was still evaluating whether to build a new plant in the U.S. and would make a final decision this summer.
Stefan Jacoby, Volkswagen Group of America’s president and chief executive, said the automaker was evaluating cost, logistics, site readiness and operational considerations as it looks at the three states.
Volkswagen officials have said the surging euro has pushed plans for a new production facility forward. The 15-nation currency has been hitting record highs in recent weeks against the U.S. dollar, making goods exported from Germany more expensive in the United States.
Dollar benefits as euro drops back
The dollar rose against its major rivals Wednesday, taking back some ground a day after the euro topped $1.60 for the first time.
Despite persistent worries about the U.S. economy, the dollar benefited as the euro dropped back. The currency bought $1.5896 in late New York trading, below the high of $1.6018 it reached Tuesday after a pair of European Central Bank governors suggested that interest rates would go higher if inflation was not stemmed.
“One of the significant drivers today, and an underlying theme in recent dollar trade, is that the market expectations are really starting to shift away from further rate cuts from the Fed and we’re seeing more concern about inflation in the euro zone,” said David Solin, a partner at Foreign Exchange Analytics.
The dollar has been weighed down by a combination of gloomy U.S. economic data, rate cuts by the Federal Reserve and high European inflation, which has kept the ECB from reducing its own rates. Lower interest rates can weigh on a nation’s currency as traders transfer funds to places where they can earn better returns, while higher rates are used to curb inflation.
Compiled from The Associated Press and Bloomberg News