wes wrote:

---

If you owned 70% of the market for anything and were loosing money what would you do?

Duh.

 

---

 Raise prices.

Oops, Snippy fell into that one.

Ya gotta ask why GE wants ta dump their locomotive biz after all these years. It's a mighty big question considering the strength of their share of the US, and world market for new locomotives.

The big problem for new locomotives is the contracts that sell so many to the US freight outfits. They have this clause whereby they'll replace failures with a new unit for a broken unit, one to one. And the maintenance thereof... The deal always looks good to the buyer. But the seller (GE) has to eat the costs for all this horse trading. It's a money loser. Sell 'em cheap(er) than comparable EMD units. But GE still owns 'em forever! As good as they may be (The GEvos, Dash-9s, and everything else) they're only as good as when they're working, pulling freight!

So why do they (GE) wanna shed 'em?

https://www.dallasnews.com/business/economy/2017/11/13/ges-new-ceo-may-put-fort-worth-locomotive-plant-600-employees-sale

The Krink wrote:

---

GE wants to "shed" the locomotive division because the locomotives today are
state of the art and the perfect time to sell that operation to a new buyer that
agrees to keep the show going and GE make a gazillion dollars from that sale
and GE no longer paying for labor to build locomotives.

---

 Seems as though no buyer has stepped up. GE won't make a 'gazillion' dollars, or any dollars while this just simmers along, and no buyer has been found to buy their locomotive, or 'transportation' division. Perhaps they'd do better by parceling pieces of the transport div's. best sellers off... Traction controls, motors, signaling, loco-maintenance/repairs, car lease biz, etc. Then there's light bulbs. The original 125 year old business that put GE at the top of the world!

How the mighty fall.

 General Electric Co GE to sell locomotives, lighting units under turnround plan Read next fastFT US joins global stock slide; S&P 500 down 0.8% 3 hours ago Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save to myFT November 13, 2017 Ed Crooks General Electric plans to sell its businesses making locomotives and lighting, as new chief executive John Flannery battles to strengthen its fragile cash position.

Giving a presentation to analysts and investors in New York, Mr Flannery said the sales of about a dozen businesses worth $20bn or more would include two of its oldest business lines, which both have their roots in the 19th century. The disposal plans came as GE said it would cut its dividend for only the second time since 1938, reducing it from 24 cents per quarter to 12 cents. Mr Flannery said he had a full recognition of the gravity of this decision, and the effect it has on many people, but that it reflected where we are as a company right now.

He said the company had hoped when it made the decision to sell off most of its financial services operations in 2015 that cash flows from its industrial business would have risen to support the dividend. Instead, the opposite has happened. Cash flows from industrial operations have slumped, from about $11.6bn in 2016 to an expected $7bn this year, and are expected to rebound to $9bn-$10bn next year*. Underlying earnings per share, which the company had been targeting at $2 for next year, are now expected to be in a range of just $1-$1.07, in line with this years expected earnings of $1.04-$1.12.

The company is also borrowing $6bn to pay additional contributions into its pension fund that it expects to be due over 2018-20. The weak earnings outlook contributed to a renewed fall in the GE share price, which by mid-morning in New York was down 3.6 per cent at $19.75. Mr Flannery described 2018 as a reset year, and added: We know what we need to do, and its showtime. *This post has been amended to correct the industrial cash flow outlook for 2017 and 2018.

-- Edited by Uke on Wednesday 15th of November 2017 11:06:02 AM