GE freezes pension plan for 20,000 employees - Fox Business

General Electric is still trying to defend itself against accusations of accounting issues. SEC said they are monitoring the situation.

General Electric is making sweeping changes to its pension plan for approximately 20,000 employees, sending shares higher ahead of Monday’s opening bell.

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Ticker	Security	Last	Change	Change %
GE	GENERAL ELECTRIC COMPANY	8.57	-0.14	-1.61%

Seven hundred employees who became executives before 2011 will have their supplmentary benefits frozen, and no changes will be made for retired employees. The changes will reduce GE’s pension deficit by about $5 billion - $8 billion and net debt by approximately $4 billion - $6 billion.

“Returning GE to a position of strength has required us to make several difficult decisions, and today’s decision to freeze the pension is no exception,” Kevin Cox, chief human resources officer at GE, said in a press release.

“We carefully weighed market trends and our strategic priority to improve our financial position with the impact to our employees. We are committed to helping our employees through this transition.”

Retired employees who have not started receiving montly payments will have the option to receive a one-time lump-sum payout.

GE's Troubled Timeline:

2018:

• June: GE was <a href="https://www.foxbusiness.com/markets/general-electric-to-leave-dow-jones-industrial-average-amid-stock-slide" target="_blank">booted from the Dow Jones Industrial Average</a> and announced a <a href="https://www.foxbusiness.com/markets/a-simpler-ge-what-it-means-for-investors" target="_blank">massive restructuring</a>, shifting its focus to aviation, power, and renewables.
• October: CEO John Flannery gets the boot and was replaced by Larry Culp. The company then took a <a href="https://www.foxbusiness.com/markets/ge-seeking-path-forward-as-a-century-old-company-ousts-ceo" target="_blank">$23 billion goodwill charge</a> for its power business. Culp said he would sell assets to raise cash and pay down debt. The SEC and the Justice Department said they would <a href="https://www.foxbusiness.com/markets/ge-slashes-dividend-takes-22-billion-charge-in-3q" target="_blank">investigate</a> the <a href="http://www.foxbusiness.com/markets/ge-slashes-dividend-takes-22-billion-charge-in-3q" target="_blank">writedown</a>. The investigation is ongoing. 
• End of the year: GE <a href="https://www.foxbusiness.com/industrials/general-electrics-baker-hughes-sale-too-little-too-late" target="_blank">sold a $4 billion stake</a> in the oil-services provider Baker Hughes and announced it would <a href="https://www.foxbusiness.com/markets/ges-digital-unit-to-sell-majority-stake-in-servicemax" target="_blank">sell a majority stake</a> in the software provider ServiceMax to the private-equity firm Silver Lake. It was able to bring down debt by $21 billion in the fourth quarter.

2019:

• January: GE altered its agreement with the rail-transport company Wabtec in order to receive $2.9 billion of cash in exchange for giving up more equity.
• March: Warns it could have a <a href="https://www.foxbusiness.com/markets/ge-stock-can-bounce-back-from-cash-flow-warning" target="_blank">negative free cash flow</a> of up to $2 billion this year.
• June: Reports <a href="http://www.foxbusiness.com/industrials/ge-1q-first-quarter-profit-earnings-revenue-aviation" target="_blank">strong first-quarter results</a>, bolstered by its aviation unit.

This story is developing. Check back for updates.

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https://www.foxbusiness.com/markets/ge-freezes-pension-plan-for-20000-employees

2019-10-07 10:45:53Z
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