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NEW YORK -- General Electric Co. is breaking its financial services business into four separate units, the company said, giving CEO Jeffrey Immelt more involvement in the company's biggest business.
Effective Aug. 1, GE Capital, which accounts for about 40 percent of the manufacturer's earnings, will split into separate units handling commerce, consumer, insurance and equipment businesses. Each business will report directly to Immelt and GE vice chairman Dennis Dammerman, the Associated Press reported.
"The reason for doing this is simple -- I want more direct contact with the financial services teams," Immelt said in a statement.
Michael Neal will be CEO of the new GE Commercial Finance, while David Nissen will be CEO of GE Consumer Finance, Arthur Harper will be CEO of GE Equipment Management, and Michael Fraizer will be CEO of GE Insurance.
GE Capital CEO Denis Nayden, his job eliminated by the restructuring, plans to create a separate financial services advisory company, GE said. He will serve as a senior advisor to Immelt and the GE Capital board on business development and other matters.
The recent series of scandals on Wall Street has led many investors to criticize GE's size and financial complexity, and Friday's move to break up GE Capital was at least partially an effort to make its biggest business more transparent, the report said.
"This will create a clearer line of sight on how our financial services businesses operate and enhance growth," Immelt said. "Our external reporting will mirror this organizational structure, providing greater clarity for investors."