General Electric's CEO Presents at 2013 Annual Shareholder Meeting Conference (Transcript)

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General Electric Company (NYSE:GE) 2013 Annual Shareholder Meeting Conference Call April 24, 2013 11:00 AM ET


Jeffrey R. Immelt – Chairman and Chief Executive Officer

Keith S. Sherin – Vice Chairman and Chief Financial Officer

Michael Barbera IVS Associates – VP, Treasurer


Tom Borelli – FreedomWorks

Kevin Mahar – Shareholder

John Keenan – AFSCME Employees Pension Plan

Martin Harangozo – Shareholder

Ron Flowers – Retirees Association of General Electric

Justin Danhof – National Center for Public Policy Research

Dennis Rocheleau – Shareholder

Jeffrey R. Immelt

Good morning and welcome to GE’s 2013 Annual Meeting. I’m Jeff Immelt, Chairman of the Board of GE and here with me today are Keith Sherin, our CFO; and Brackett Denniston, our General Counsel.

Each year, we have our Annual Meeting in a GE town that epitomizes what our company is about and that our shareowners deserve to see. This year it’s in New Orleans and we’re very proud to be here. New Orleans is a great vibrant city and the State of Louisiana is a great place to do business. We have more than 1,300 employees working across the state and businesses such as energy management, oil and gas, healthcare and GE Capital and we 1,300 retirees across the state.

In GE, we take on the world’s toughest challenges and we find ways to build a better future. We want to be in places where the people share their same spirit. New Orleans has faced this year challenges and its people have only made this city stronger. That commitment is making a better future is a critical part of GE’s culture. That’s why we’ve invested millions of dollars in the state-of-the-art IT facility here in New Orleans. We approach that we opened the GE Capital Technology center this week and have already begun to staffing the facility. We’ll bring more than 300 jobs in New Orleans and these are high-tech jobs, so they will add to the city’s economy.

Over the years, we’ve developed solutions for our customers. We have build on strong relationships and help the communities. Oscar has been a partner to GE Healthcare for years. It’s a great relationship on several levels, technology, efficiency and culture. And across the U.S., we must develop new models of healthcare, building both the structure and culture that allows us to move faster. This week we also announced the donation to the Congressional Medal of Honor Foundation for the educational programs with World War II Museum here in New Orleans. It’s a way for the great organization and the local teachers and students who’ll help benefit from these programs.

So this is special place for GE and its shareowners and to be I welcome all of you. We like to think that GE as a company that can compete and help our customers to compete in today’s environment and we’re focused on big productivity drivers of our time. And this includes things like unconventional resources, the shale gas revolution, advanced manufacturing, only the analytical layers around our products and simplification which we’ll work on very hard in GE to move faster and be more competitive.

Today with a $100 billion in revenue and 15% margins, we’re the largest and most profitable infrastructure company in the world, selling in more than a 160 countries. We put about 6% of our revenue back into R&D. We invest some $10 billion to launch products and build global capability and we’re big financial service players with an emphasis on specialty finance for small and medium sized business.

The culture of our company is based on four principles, were mission based. We believe that the products we make change the world. We build re-power. We move recur. We’re constantly searching for a better way. We always learn more and do better. We’re working on solutions for our customers and our society like we do here in New Orleans. We’re working on affordable healthcare energy in the bit province to shape the 20% rate and we’re a weak company we believe in team work.

Those are the principles that have allowed us to grow and be successful over the past 130 years and really that’s what keeps us hungry and humble as we look at the future. This is who we are. It’s why GE works and it’s why you could be you proud of your company and why your company is positioned for the success. So now in the order of business, some advice of this meeting is properly convened that we have a quorum and that the proposed resolution set fourth in the proxy statement was filed as part of these proceedings.

We received proxies representing over 79% of the approximately 10.4 billion outstanding shares, eligible to vote. The management proxy committee has voted these shares in accordance with shareowners wishes. It’s now my privilege to introduce the director nominees and the members of your Board of Directors who are here with us today. I’m going to ask the Director to stand briefly as I introduce them, so you can see who they are.

Sandy Warner, former Chairman of the Board of JP Morgan Chase, our Director since 1992. Sandy is Chairman of the Audit Committee; Jim Cash Emeritus, James E. Robertson, Professor of Business Administration at the Harvard Business School, our Director since 1997; Andrea Jung, former Chairman and Chief Executive Officer Avon, our Director since 1998; Ann Fudge, former Chairman and Chief Executive Officer, Young & Rubicam, our Directors since 1999; Shelley Lazarus, Chairman of Emeritus and former Chief Executive Officer, Ogilvy & Mather, our Director since 2000; Shelley is Chairman of the Nominating and Corporate Governance Committee; Ralph Larsen, former Chairman and Chief Executive Officer of Johnson & Johnson, our Director since 2002; Ralph is presiding Director and Chairman of the Management Development & Compensation Committee; Bob Swieringa, Professor of Accounting and former Dean of Johnson Graduate School of Management Cornell University, our Director since 2002; Bob Lind, former Chairman and Chief Executive Officer of Deere, our Director since 2005; Susan Hockfield, President of Emerita and professor of Neuroscience MIT, our Director 2006; Jim Mulva former Chairman and Chief Executive Officer, ConocoPhillips our Director since 2008; Geoff Beattie, Deputy Chairman Thomson Reuters, our Director since 2009, Mr. Beattie's Chairman of the Risk Committee; James Tisch, President and Chief Executive Officer Lowes Corporation, our Director since 2010; Jack Brennan, Chairman of Emeritas and Senior Advisor of Android Group, our Director since of 2012. Francisco D’Souza, Chief Executive, Cognizant Technology Solutions, our Director since 2013; and Mary Schapiro, former Chairman Securities and Exchange Commission, our Director nominee.

I would like to acknowledge three directors who are not attending this meeting, they’re not attending for election today. Roger Penske has been a GE Director for 19 years. We’ll always appreciate Roger’s entrepreneurial spirit and operational insight. Sam Nunn, Director for 16 years. We will always miss his wisdom and judgment across every business and A. G. Lafley who’s a GE Director for 10 years. We’ll always remember A.G.’s strategic and operational skills. Please acknowledge all of their great work, the Board and for the great work on behalf of GE. I would also like to ask Mike Neal and John Rice to stand briefly, the Vice Chairman of GE, Keith Sherin who is here today is with me. Mike and John?

And now the second item on our agenda, a report on company operations. Keith Sherin will review GE’s financial performance and strategy and then I’ll review our long-term outlook and key strategy items. Keith?

Keith S. Sherin

Jeff, thank you. Good morning everyone. It’s great to be here in New Orleans. I’m going to just cover a couple of charts about our financial performance. I’ve got to start with the economy. We see 2013 be shaping up sort of similar to 2012. We have slow growth in the developed world like the United States and Western Europe and Japan and we have pretty strong growth in the emerging markets and that’s continuing.

You could see for our outlook, the United States, we expect to have around 2% GDP growth about flat with last year. We can see that unemployment remains stubbornly high. One of the bright spots that we’re experiencing is in housing. We see a quite an increase in both single family housing starts, as well as multi-family housing starts, that’s good for the economy. It’s good for our appliance business. And then, one of the challenges that we continue to face our larger fiscal deficits and with programs like sequestration, that’s going to continue to provide a drag on growth.

Europe is tougher than we expected. Europe was slow growth last year. This year it could be down a bit for us in the quarter, it was down quite a bit. We expect that to continue through the year as they wrestle with their austerity and fiscal challenges. And the bright spot is in the global markets. Places like China, the Middle East, Africa, Latin America, we continue to see very strong growth, orders were up 17% in the first quarter. So the recovery is mixed, the strength for us is in the emerging markets, and we continue to shift to center gravity of the company to take advantage of those opportunities.

For 2012, we laid out a number of objectives, with investors we had five big commitments we made at the end of 2011, and we had a pretty good year in terms of performance.

Number one, we wanted to grow our industrial earnings double-digit, we grew them 10%, that was a great performance. Number two, we want to increase our pre-tax profitability, our operating margins, we grew them by 30 basis points. Number three, we wanted to restart the dividend out of GE Capital, and the team did a great job, we’ve received $6.4 billion from GE Capital back to the parent last year, which helped a lot with capital allocation.

Number four, we want to continue to run off our non-core assets in GE Capital, make the non-core assets smaller and invest in our mid-market leasing and lending business, and the team exceeded all of there targets, and number five we want to have good year on balanced capital allocation, returning cash back to you, back to our shareholders, we had a good year with a mix about $5 billion of buyback, and $7 billion dividend, so $12 billion back to shareholders.

And on the right side, you can see we still have just tremendously strong fundamentals in the company. We ended the year with a record backlog $210 billion of products and services we will deliver over the next several years.

We had a $77 billion of cash between the cash of GE Capital and the cash of the parent, that keeps GE Capital safe and secure, and it gives GE the ability to do a lot of different things in capital allocation, and we want a strong dividend, our yield last year averaged 3.3%, and it’s very important to us, I’ll couple more in that a minute.

I’m just going to talk about the growth enablers, we continue to invest in our global growth, we continue to invest a new technology, and we continue to invest in our services, both platform. So we had a pretty good year, we met or exceeded all of our investment commitments that we laid out at the end of 2011.

When I talk about investor friendly capital allocation here is really on top of what we invest organically for our new product introduction or globalization or other technology investments. Here’s what we do with investors. On the left side, the dividend is the number one priority for us. Last year, we paid $7.2 billion of dividends to our investors. In December, our board of directors approved a dividend increase of 12%, and in this year we expect to pay about $8 billion of dividend.

With the dividend increase even though the stock is higher the yield is up to 3.3% and in environment where the 10-year treasuries are trailing at 1.7%. It’s a pretty nice return for shareholders on an ongoing basis.

And then a bit on buyback, we are buying back shares, last year we bought back a little over $5 billion of stock with the closing of the NBC transaction we received the cash for selling the remaining 49% back to Comcast. We’ve increased the buyback objective this year. We expect to do almost twice as much as we did last year. And then finally on the right side, our strategic acquisitions, we continue to invest in inorganic capability, we are adding new capability to the company.

We have a $8 billion of announced transactions, the two biggest ones that you are all familiar with our Avio in our Aviation space, which is going to add a lot of capability to the aircraft engine team as well as Lufkin and oil and gas deal that we announced two weeks ago that builds out our oil and gas base, and we are very excited about the both of those acquisitions. So we are returning a lot of capital back to shareholders plus we are reinvesting in the capability of the company.

Now I talked about dividends being a number one priority, I thought I put this chart and to talk about put some numbers to put that in perspective, so this is the amount of dividends that company paid in the decade of the 70s, 80s and 90s and then from 2000 – the first quarter, the amount of dividends we paid, so if you look at from 2000 to the first quarter that’s about a 13-year period. We paid 2.5 times the amount of dividend that we paid over the previous 30-year periods.

So this is a really a big priority for us or our objective is to have an attractive payout ratio. And what we mean by that is that for every dollar of net income we generate, we’re going to pay out about $0.45, 45% of that back to shareholders in the form of the dividend. We’d like to have an attractive yield. So when you buy a share of GE stock and you get that dividend of $0.19 every quarter, on an annual basis today, as I said, that’s about a 3.5% yield which is a premium versus the S&P 500 and a significant premium to some of the other alternative investments out there.

We want to grow the dividend inline with earnings. So as we grow the company, we expect to continue to grow the dividend, and as we said, the Board last increased the dividend in December and it’s at a very attractive level. And then finally, including the buyback, we do have a significant amount of capital, we’re returning back to investors.

So to wrap up, our performance, how the company performs is what’s going to drive the total shareholder return that you all get. This is a chart of our operating earnings per share from 2009 through 2012. You can see through that period, we’ve been able to deliver double-digit earnings growth. Through that period on a cash basis, we’ve delivered $36 billion back to investors in the form of dividends and buybacks.

You could see on the bottom that from that time, 2009 to today, the GE total shareholder return has exceeded that of the S&P 500. In 2012, we delivered a 21% total shareholder return based on our performance and that also exceeded the return of the S&P 500. And while year-to-date, we’re off to a slow start. We’ve always known that we have a plan that has a first half with lower equipment deliveries and the second half has got a much better profile.

Our expectation is that we’re going to have a pretty good year in terms of operating EPS. We’d like to deliver double-digit operating EPS. And if we deliver that performance, we think we’re going to have another very good year for investors. We plan on returning $18 billion of cash to our investors this year, $10 billion through the buyback, $8 billion through the dividend, and most of that is still to come in the second, third, and fourth quarter or so. We have a good outlook for the year. We have a good expectation and we look forward to a good performance delivering good returns.

So, thank you and I’ll turn it back to Jeff.

Jeffrey R. Immelt

Okay Keith, thanks, and just a few comments on kind of where we’re taking the company next. We really have two pieces to the portfolio, a great infrastructure company and a very valuable especially finance company and we expect to get dividends as we grow and strengthen our Financial Services company to back and to invest in the strong infrastructure company. And our enterprise capabilities are really technology, very strong focus on services and growing that into analytics, a very good capability and market share on our growth markets, simple and competitive cost structures. So we as a company really focus on those four things.

From a portfolio standpoint, we really aspire to get our industrial percentage of earnings overtime up close to 70%, we want to have good relative performance versus our peers and we just want to keep investing in great markets where we have long-term tailwinds, continue to build our strength in infrastructure, drive returns and margins, and again, as I said continue to create value in our GE Capital franchise. And so this is something we communicate very frequently.

A good example of how we create fast growth industrial businesses is in oil and gas. This is a place where we put a lot of capital over the last 15 years to kind of grow the business and establish a strong competitive position and to get a business that’s in excess of $15 billion today, should be higher in 2013 with good margins and returns that really leverages the capabilities that I talked about earlier. It leverages all of the GE industrial capability. It allows us to build integrated solutions for our customers. We can leverage our global capability and our global footprint, and we can utilize our cost base and our operating capabilities on margins to build good margins and returns in this business as well.

Financial Services team has done a great job of repositioning in the new world for financial service markets. As you can see on the left, we’re down at about $400 billion of assets and we’ve got very strong liquidity and it really improve the funding profile, a very strong tier 1 capital and so we believe that GE capital ought to be able to increase their dividends back to the GE parent.

In the right hand side, just takes look at GE Capital versus some of our peer banks. And on lot of the metrics that are important that investors follow GE Capital has a very strong position. So we’ve got a great franchisee in mid market areas, we’re generating substantial excess cash and we have a lot of financial strength. So, strong industrial, strong infrastructure, strong financial services.

As Keith said we continue to invest in R&D, I think this is a core strength of the company. We invest between 5% and 6% of our revenues back in the R&D and you see that output in terms of a great array of new technologies and Jet engines and blowout preventers, new healthcare products, mining equipment appliances. Again, we think this is the key competitive advantage as we look at the 21st century and it’s a place where GE wants to invest and grow.

Our services business is incredible driver of profitability. We’ve grown our revenue by more than two times over the last decade. This is a very high margin business. In the services business, we want to continue to grow around our installed base, we want to continue to add technology to improve our customers’ performance and we want to try the analytics, so it is going to help drive better product performance, help our customers to be more profitable.

So service is continues to be a big for us when we look at the company. One of the places where we’re investing a lot of money in R&D is in analytics and this kind of shows you one of the reasons why we do that is to make our customers more profitable. Our big customer base is where our installed base is in places like aviation and power and rail and healthcare and just a 1% improvement in fuel savings over 15 years for Airline customers is where $30 billion of profit to them so these small changes in our product performance really bleed through into great performance enhancements for our customers.

And then the right hand side just shows you some of the opportunities we have to work with customers from a software and analytics standpoint. RailConnect goes to our railroad customers, and help to make them more productive. Teliris goes to our airline customers and helps them reduce their operations cost and help their asset utilization, and (inaudible) is kind of an air traffic control system for hospitals. And so, we have customers for all these, and this is a key way that we can use our service business to add customer value.

We’re winning around the world. We have a business and a framework in our growth markets that’s growing 10% to 15% every year. We’ve added commercial resources and we want you to think about your company as one that can really invest and grow on all these global markets. We can compete in places like China very successfully, India, Russia, all around the world. And so, we are a very strong global company, more than half of revenues are outside the United States, and I expect that will continue into the future.

So, we’ve seen great growth. We have 17% orders growth in these growth markets in the first quarter, and we’d see this big theme continuing into the future.

Our cost margins are very important to all of us in terms of how we run the company. We got a commitment to grow margin rates by 70 basis points in 2013. One of the key ways we’re doing that is by simplifying our cost structure and continue to drive lower cost and administrative cost. And so we see that going down to probably 15% by 2014.

So we continue to grow and work on margins which we are expanding, and we continue to simplify the company to really only be putting the resources where we can get the most (inaudible). And so, it’s all about speed, accountability and compliance when you look at the company.

One of the big investments you saw in some of the videos, and some of the things we’ve done is to invest in advanced manufacturing, just like technology, we think manufacturing is a core part of the Company’s strength, and so when you read about things like additive manufacturing or design to costs or 3D printing or some of the new fees and technologies and technology.

This is going to allow us to be faster to markets, lower our product costs, improve cycle times and we think again this is a place where GE has a strong leadership position. Lastly, when you think about and you read the annual report and the proxy, we always have a 3-year plan that holds managers accountable of certain metrics. We just launched another one in ’13, ’14 and ’15 and that’s all about operating EPS growth, overall cash, both CFOA and cash from disposition growth, a growth in our industrial percent of earnings, and growth in return sort of capitals.

So we think these four metrics, really captures what’s most important to our investors, it’s the way that we will align managers looking forward into the future, and again we think this is make sure that we are focused on what’s most important to you and your colleagues around the world. Culture (Inaudible) at GE, we talked about the culture of GE works, mission based, search for better way, solutions oriented for our customers, and a team that works together working on a way to make the world more valuable, and understand our context and fit with the world.

So that’s just a brief update on the Company operations, and now we are going to move forward with the agenda. So, let’s move to discussion and voting on matters set forth in the proxy statements. We will take up the election of directors and the management ensuring proposals in the order in which they appear in the proxy statement. After the election of directors and management proposals, we are going to do, so what we are going to do is go through up to all the management proposals. There is going to be an opportunity for questions and discussions at that time.

And then after the share holder proposals are introduced there will be chances to discuss those as well. And there will be time later on the meeting for discussion on other business matters, but first we need to address the items that are presented in the proxy statement. The independent Inspectors of Election for this year’s meeting are representatives of IBS Associates. The inspectors have taken the oath of office required by law and it had been a work since proxy started coming in. If you’ve already voted by proxy, there is no need to change your vote by ballot today, unless you would like to change your vote.

You’ll find the ballot on your seat, so let’s return to the Election of Directors into the presentation proposals in the proxy statement. The first matter is the Election of Directors had placed before the meeting to service directors for the coming year. The 17 individuals whoes names and biography appears on pages 3 to 9 of the proxy statement, namely those nominees are Beattie, Brennan, Cash, D’Souza, Dekkers, Fudge, Hockfield, Immelt, Jung, Lane, Larsen, Lazarus, Mulva, Schapiro, Swieringa, Tisch and Warner, each of those nominees has received the overwhelming maturities of the 8 billion shares voted by proxy.

The next on the agenda is the proposal to approve our name to executive compensation, your Board of Directors recommends a vote for the approval of the name of the executives compensation and then the, there is the proposal to ratify the selection of KPMG as independent auditors for ‘13. We have with us today John Veihmeyer and Bill Freeda of KPMG responsible for GE audit were available after the meeting to respond to your appropriate questions. Your Board of Directors recommends vote for the ratification of KPMGs independent auditors. So now if you like to speak, go to one of the two our microphones and I will calling you there, give your name when you recognize, so is there any discussion on the board nominees for the management proposals. So Dr. Borelli, I’m going to start with your Tom on microphone number one.

Question-and-Answer Session

Tom Borelli – FreedomWorks

Good morning Mr. Immelt and shareholders. My name is Dr. Tom Borelli. I am senior fellow at FreedomWorks, a national grassroots organization and I am managing the market freedom project there. Before we have a chance to vote on the board and yourself, I would like to explore your statements you’ve made about our national debt, as you know our national debt is at $17 trillion and counting and it’s not only bad for citizens, it’s actually bad for shareholders. And to your credit, you’ve recently joined a Fix the Debt Commission with Mr. Boles and Mr. Simpson as well as other 80 CEOs who want the government to do something about this massive debt.

The problem we have here though, Mr. Immelt, is that your actions as CEO undermines the reduction of our debt, as you know you lobbied – General Electric lobbied for Obama’s $787 billion stimulus, which added almost a trillion to our debt. And then making matters worse, our profitable company took a $100 million in grants from taxpayers. 1 grant was for $30 million and we ended up hiring five or six people. That just doesn’t make any sense and I think it represents a real reputational risk for the company to lobby for big government and favor for cutting the deficit and then on the back end, a profitable company that last year made $16 billion ended up taking grant money from taxpayers. I mean, that’s outrageous, but we have a solution.

We think it’s in the company’s best interest and your best interest to return the $100 million back to the taxpayers. We think that’s a noble initiative. You’re making plenty of money, you really don’t need the $100 million will make a great statement for General Electric’s leadership and to make sure you understand that (inaudible) business, today we launched a website GE, Give It Back, and we have an online petition that’s been directed to the Board of Directors encouraging them to return the taxpayer money back to we, the people. I’d like your reaction to our request that you return our money back to the people.

Jeffrey R. Immelt

Dr. Borelli I always listen to what you have to say. So I appreciate your comments at this year’s meeting. Thank you.

Tom Borelli – FreedomWorks

(Question Inaudible)

Jeffrey R. Immelt

I always listen to what you say.

Tom Borelli – FreedomWorks

(Question Inaudible)

Jeffrey R. Immelt

Let’s go to microphone, Kevin let’s go to microphone number two.

Tom Borelli – FreedomWorks

Answer the question please?

Jeffrey R. Immelt

Again Dr. Borelli, I always appreciate to having you here at the meeting.

Tom Borelli – FreedomWorks

(Question Inaudible)

Jeffrey R. Immelt

Okay, Kevin. Good morning.

Kevin Mahar – Shareholder

My name Kevin Mahar and I’m 19 year old veteran of every shareowners meeting. This morning I rise on the basis of the Board of Directors to give a statement from Bill Frieder whose wife was ferric in an accident and he had to take the home, so Bill ask me to make the statement for him.

Good morning. My name is Bill Frieder. I’m here this morning to ask the shareowners board against the members of the Management Development and Compensation Committee of our Board of Directors. We have Chairman, James Cash Jr, Andrea Jung, Robert Lane and Douglas Warner III. I do not take this action lightly, but I find it necessary because I believe these directors bear at least some of the responsibility for the continuing and disturbing policy of phantom dividend. This is the practice with GE Senior Executive are permitted to collect dividends or dividend equivalence on shares of GE stock they do not currently and may never own.

This year, they were two shareowner proposals submitted on the subject and it’s disappoints me to tell you all that GE did everything it could and was successful in its efforts to convince the Securities and Exchange Commission to disqualify the proposal on phantom dividend. In fact GE paid a considerable amount of shareowners money to the law firms of Gibson, Dunn & Crutcher to have the shareowners’ proposal disqualified.

Please keep in mind that the executives and profit from this practice spent our money, not their own, just so we, the shareowners would not have a voice as to whether we wanted this practice to continue. But makes this practice so egregious this year is the fact that in 2012, GE notified those who retired as salaried employees, and their spouses that if they had not reached the age of 65, and enrolled in Medicare by January 1, 2015, they would no longer be offered post 65 retirement benefits which include a Medicare supplement, subscription plan and life insurance plan.

GE claims they have taken this action to remain competitive. The beginning of 2005, our newly hired GE employees were told that they would not be permitted to participate in the GE pension plan. Again, GE claims it was necessary to remain competitive. When asked if the supplementary pension, a plan reserved for the privilege field would continue after January 1, 2005, the answer from GE was, yes, it was necessary to remain competitive.

When GE was asked why they do not end the practice of (inaudible) dividends, GE answer was, you guessed it, we need to be more competitive. Is it possible, Mr. Chairman, that the only way the General Electric Company can remain competitive is to take benefits away from employees and retirees, who make design its LG products and give even more – among those, but three of you on the stage, really.

This past election season, we heard quite a bit about the makers and the takers. I asked GE’s shareowners to consider who was the GE company are truly the makers and who are the takers? Thank you.

Jeffrey R. Immelt

Thanks, Kevin. Ms. (Inaudible)

Unidentified Analyst

Are you going to answer the question.

Jeffrey R. Immelt

No, he add a proposal for the board, so.

Unidentified Analyst

Good morning it’s a (inaudible) with FreedomWorks and shareholder. Mr. Immelt, GE has benefited from the fiscal cliff deal where they were wind production tax credits and GE has also taken a substantial amount in grants and government contract. So my question to you is that, do you stand for free market or do you stand for government support when it comes to company that are profitable are turning a profit and issuing dividend.

Jeffrey R. Immelt

Again, we run a global company, globally competitive company. Our sales to the government are less than 3% of our total revenue. So we are 55% of our industrial companies outside the United States. So, we try to compete and use the same rules of ever other company in U.S.

Unidentified Analyst

So by using our tax dollars, how dependent is the wind production. How dependent is the wind energy industry regarding General Electric without government assistance. How dependent would that industry be?

Jeffrey R. Immelt

Again, you need to – our customers will be better off answer that question, but the cost…

Unidentified Analyst

But you’re the CEO…

Jeffrey R. Immelt

Our customers are the ones that really have the benefits there. Cost of electricity is probably $0.07 or $0.08 a kilowatt hour now.

Unidentified Analyst

Which is much more higher than it would be for…

Jeffrey R. Immelt

Half of the revenue was outside the United States, so little fine.

Unidentified Analyst

The wind energy product that you produced and you’re gaining the benefit from the government, dropping up that industry, which clearly can’t stand on its own. Does General Electric highly depend on government support in order to produce those products and so on?

Jeffrey R. Immelt

Again, we make the products and we’ll see where they fit in the market.

Unidentified Analyst

So you’re not for free market, you prefer government support.

Jeffrey R. Immelt

Again, I just we make the technology; we’ll see where they fit.

Unidentified Analyst


Jeffrey R. Immelt

Thank you. We’ll now move to the six shareowner proposals in the order that they appear in the agenda, we have six shareowner proposals being presented.

The first proposal asks the Board to cease all executives’ stock options and bonus programs and was submitted by Mr. Timothy Roberts of Louisville, Kentucky. The second proposal relates to director term limits and was submitted by Dennis Rocheleau of Fairfield, Connecticut.

Third proposal requested the board to have a policy that the Chairman to be an Independent Director and was submitted by The American Federation of State, County and Municipal Employees. The fourth proposal relates to shareowner action by written consent was submitted by Mr. William Steiner. The fifth proposal requested senior executives retain a significant percentage of due shares until reaching retirement age results was submitted by Mr. Steiner. The sixth proposal relates to multiple candidate elections and was submitted by Mr. Martin Harangozo of Louisville, Kentucky.

We ask that the presenters can find their comments during this portion of the meeting to the subject matter of the proposal being presented. And we ask that the other speakers waiting for all the shareowner proposals represented before providing our comments.

We’ll have an opportunity for discussion of other matters after we’ve finished the (inaudible) and report on inspectors of election on the voting results.

So let me begin with Mr Timothy Roberts, I believe is here today to present proposal number one. Mr. Roberts? Good morning.

Timothy Roberts

Good morning. My name is Tim Roberts, it’s great to be here. Please turn to the back of the Annual Report to the performance chart on page 143. The market is at near record high, our stocks, our dividends and our earnings are trailing like the (inaudible). When the company underperforms the market, performances are paid. This is accomplished by taking the company nearly bankrupt according to force and claiming a slight recovery is an out performance to the market.

Purchasing ages can be told to bag these suppliers to raise prices on a net income and performance to produce trading and recovery opportunity. Trading patterns show that both Mr. Welch and Mr. Immelt made enormous amounts of money on options and trading GE stock, collectively they own hundreds of millions doing this. Welch and Immelt become rich, utilizing the shareholders as useful idiots. Their inside trading even if legal is outperforming to buy and hold shareholders.

Shareholders do not have the same inside control and we lose money. Again see the GE performance chart in page 143 in find print. Welch said to the Financial Times effectively that much of GE evaluation was unsustainably driven by debt. Welch did not however return to the GE shareholders, the hundreds of millions he collected in creating that GE bubble. Welch and Immelt kept their money as shareholders lost their shirts. Again see page 143, given the size of the valuation declines and dividend declines and Welch’s acknowledgment that debt driven profits are not sustainable. Profit increases should only offer salary increases, when profits increase with debt simultaneously decreasing, increasing the profits by increasing debt continues in insanity, as Welch discussed in Financial Times.

As my home address is on the proposal I have received correspondence from several shareholders, all have been positive. One wrote that he lost both his shirt and his underwear. So shareholders I urge you to make proxy recommendations and ask me if you need any help in doing so.

The proposal, The Board of Directors are requested to consider voting, attestation of all executive stock option programs and bonus programs. If you look at the chart on page 143 Mr. Immelt you see that a $100 invested in the market becomes $109, you see $100 invested in the DOW becomes $114, yet we see a $100 invested in GE becomes $69. So, this raises questions collectively for you Mr. Immelt. Would you rather have $69 or $109 and how does $69 outperform $109? Would GE catch-up to the market beginning your tenure and why is the GE performance chart in the back of the book and not in the front of the book? And next year will you put the performance chart in the front of the book? And, finally, can you chart the GE performance to the market since your tenure in the front of the annual report? Please vote yes for proposal number one. Thank you. Thank you.

Jeffrey R. Immelt

Thank you. I understand that Dennis Rocheleau will present proposal number two. Dennis?

Unidentified Analyst

Thank you, gentlemen. Contrary to the ad hominem argumentation of Tony Muller and his associate [Don Cretcher], this proposal is pure process and GE’s obduracy is its wellspring. That said, I’ll reserve my time for another matter.

Jeffrey R. Immelt

Okay. I believe that Mr. John Keenan is here to present proposals number three, four and five. Mr. Keenan.

John Keenan – AFSCME Employees Pension Plan

Yes, thank you. Fellow shareowners and member of the board, my name is John Keenan, and I’m representing the AFSCME Employees’ pension plan and co-filers Missionary Oblates, Congregation of the Sisters of Charity of the Incarnate Word, Congregation of Divine Providence, Benedictine Sisters of Mount Saint Scholastica, and Benedictine Sisters of Virginia. I hereby move share owner proposal three, asking the company to adopt a policy that the Chairman of the Board be an Independent Director.

We believe an independent board chair provides a better balance of power between the CEO and the board, and supports strong independent board leadership and functioning. The proposal boils down to presenting an inherent conflict of interest. It’s the board’s job to monitor the CEO and the chair’s job to run the board. The CEO is also the chair then he or she is effectively in charge of monitoring his or her own performance. We believe that independent board leadership would be constructive here at General Electric where our Chairman and CEO, Jeffrey Immelt is serving both positions since 2001. And, according to the Forbes 2012 Rankings of Pay Efficiencies for CEOs servicing at least six years, Mr. Immelt was named one of the worst CEO’s for pay for performance, ranking 200 out of 206 for executives who delivered the most to shareholders relative to their total compensation.

Our company states that according to the 2012 Spencer Stuart Board Index report 77% of the S&P 500 do not have an Independent Chair. But, saying everyone else is doing, it does not make it right. And the Spencer Stuart surveys clearly indicating freezing trend toward independent Board leadership in the U.S. The same 2012 report found that 43% of S&P 500 companies split the Chair and CEO roles, up from 35% in 2007, but also shows 21% of boards now have a truly Independent Chair, up from which is more than double the 10% found in 2006.

Our Board argues that splitting the roles of Chair and CEO would have the consequence making their management and governance processes less effective than they are today through undesirable duplication of work and in the worst case, lead to a blurring of the clear lines of accountability and responsibility. We strongly disagree. Combining the positions clearly blurs the lines of accountability and responsibility. It’s the board’s job to provide oversight of the CEO and the Chair’s job to run the board. When the CEO is also the Chair which is the case here then he is effectively in charge of the oversight of his own performance which is in obvious conflict.

An Independent Board Chair present culture shift to the U.S. Imperial CEO model, but this goes to the heart of corporate governance. Who runs the Board and what’s the Board’s role? Is to work on behalf of shareholders or work on behalf of the CEO? We maintain it should be the work on behalf of the shareholders. Proxy Advisor Glass Lewis supports this proposal stating that an Independent Chairman is better able to oversee the executives of the company and so the pro-shareholder agenda without the management conflicts that CEO or other executive insiders often face leading to a more proactive and effective Board of Directors. We believe that independent board leadership would be in shareholders best interest and urge shareholders to vote for this proposal. Thank you.

Jeffrey R. Immelt

Thank you. We do number four and number five as well.

John Keenan – AFSCME Employees Pension Plan

You also do number five.

Jeffrey R. Immelt


Unidentified Analyst

On behalf of the proponent of shareowner proposal for, I hereby moved shareowner proposal for asking your company to provide the right act by written consent. Thank you on the five. On behalf of the proponent, I hereby move the shareowner proposal five asking your company to implement a stock retention policy to require executives to repay 25% of shares gained through equity programs, through retirement. The idea here is that by requiring our executives to hold their shares, this will better align executive interests with those of the shareholders. Thank you.

Jeffrey R. Immelt

Thank you very much. I understand that on proposal number six will be presented by Martin Harangozo, Martin good morning.

Martin Harangozo – Shareholder

Good morning. My name is Martin Harangozo. I am grateful to be a shareholder. I love this company, people and products. I own more voting shares and more than half of your directors and director’s nominees. Equal imagination is a proposal on proxy without spending one penny for postage.

General Electric a 100 billion plus net asset company, 12 digits, growing to a historical market average will gain an additional 7 digits in 200 years making 19 digits and one-time 1% donation 17 digits would give each person today much more than $1 million. Two centuries of intelligent monetary growth can forever change the world financially, permanently eliminating millenniums of persistent poverty and illiteracy. No more biblical poor ledgers, as ledgers become a millionaire, the $1,000 shareholder becomes a debt of billionaire, the pensioner is hold. We can give the public this much.

Today, we use more steel and build larger ships than ever yet one-time larger ship builder, Bethlehem Steel, led by charming CEOs, guided by rigorously directed cozy directors within impressive credentials when bankrupt as warm buffet did not build them out. That’s what and steel did not see as underperformance to market, as an opportunity to harness the market until it could once again lead the market, it simply when buzzed.

Millenniums of commerce and centuries of equity growth teaches that that free indexing should enable General Electric to perpetually grow, achieving three digits each century. All of history shows that any plan short of this will likely not achieve such growth. Something always goes wrong, somebody will borrow too much, financial saviors as profit are rare.

U.S. housing crisis occurs when 99.2% of average Americans may go under a 30 year mortgages. Our Board, likely all multi-millionaires, did not protect a dividend of six months after doing so, promising to do so. Dividend cuts and share depreciation (inaudible) more than a wealthy director. If GE does not grow, the sky growth can be earned in these samplings.

The dividend of offer should be met with the words never again. That free company is paying half of earnings and dividends will not default on dividends. We can lent to many nations, but borrow from none. (Inaudible) rights regarding buffets virtual a half of way, the Board members made as wealthy Barbie dolls. Buffet has criticized his ineffectiveness as a Board member.

Presidential elections on the other hand teach spirited competition. This creates the world’s greatest economies; single candidate director election should be improved. My dear fellow shareholders, I bring a plan with a date to add seven digits to the company’s performance while reducing risk, if you like such a plan you should vote for those directors that present a plan meeting such investment objectives in our report, this is recommended by Buffet’s mentor, (inaudible) security analysis. This requires a choice in director elections. Please vote for multiple candidate election’s proposal number 6.

Jeffrey R. Immelt

Thanks Martin. So, let’s move on to agenda item number 4, (inaudible), remember we’ll provide an opportunity for discussion of other business matters in a few minutes, but (inaudible) and the items in the (inaudible) statement comes first. You’ll find a bell on your seat, if you have a bell, ready to turn in, please hold it up and I’ll ask the ushers to collect it. See if there’s, we’ll make sure to get you, here we go. So while that’s happening, let’s move on to the next agenda item, I believe the inspectors of election are ready to announce the outcome of the voting. So let’s go to the inspector’s report, Mr. Michael Barbera of IVS Associates will be presenting the report on the inspectors, Mr. Barbera, do you have a report for us?

Michael Barbera

Mr. Chairman. The Inspectors of Election have completed initial tally of the vote cast at this meeting in personal by proxy. Proxy is representing approximately 8.027 billion shares or 77.4% of the total shares eligible to vote or receive. Other shares have been voted at this meeting by ballot or by proxy.

On the basis of our initial count, the Inspectors of Election announce the following results. On the Election of Directors, each director received at least $5.2 billion favorable votes, and all nominees have been elected. On the management proposals, the advisory approval of our named executives’ compensation four, 94.5% of shares voted against 5.5%.

On the ratification of selection of independent registered public accounting firm four, 97.4% of shares voted against 2.6%. On the shareowner proposals, number one, the citation of all stock options and bonuses four, 4.4% of shares voted against 95.6%. Director term limits four, 5.9% of shares voted against 94.1%. On the Independent Chairman four, 24.7% of shares voted against 75.3%.

The right to act by written consent four, 21.7% of shares voted against 78.3%. Executives to retain significant stock four, 29.3% of shares voted against 70.7%, and on the multiple candidate elections four, 3.9% of shares voted against 96.1%. Mr. Chairman, this initial tally is subject to verification and the final tabulation may reflect small changes in the vote I’ve announced. The final tabulation we set forth in the formal report of the Inspector of Election to the secretary of the company, which will be made after the call has been verified. This concludes our report.

Jeffrey R. Immelt

This concludes the formal business of our annual meeting. But we now turn to questions and discussion on other business matters, which is agenda number six. We’ve already heard comments on the issues raised in this year’s proposal, so we try to give other shareowners, who have not spoken, a chance to discuss the others matters which might be on their minds. If you wish to speak, please come to one of the two isle microphones which we recognize. Please remember to give your name when you’re recognized. So is there anyone that would like to discuss. Go to microphone number two, yes sir.

Ron Flowers

Yes. Mr. Immelt, stockholders, I’m Ron Flowers. I’m President of the Retirees Association in Erie, Pennsylvania. We talked about some history today about how the companies making it pretty well, painting a fairly rosy picture. But according to the information that the company gave the union in 2006, the 81,000 retirees, hourly employees average $625 a month in a pension. While a surviving spouses getting about $300 a month. These retirees receive a structural increase in 2007 and a 13th check in 2011, didn’t do a whole lot for that $625 a month, but it was well accepted.

Even with these, you can see they don’t have a lot to live on. The retirees groups across the country use to bring in proxies. We use to bring as retirees group collect proxies and bring them into be voted at the meeting. In 2006, I brought in almost a 0.5 million shares to be voted from 248 people. At the stock price at that time $40 they were worth over $90 million. Now this sounds like a lot of money, wrong. This was an average per retiree of 1,997 shares worth $79,880 per person at 40 a share. For many this was a total life savings, but this also gave them a quarterly income from their dividends of over $600 a quarter, $2400 a year. This could pay property taxes and many other things. This was money that they could count on.

So then what happens? Suddenly the stock was under $7 and their total savings went from $79,000 down to under $14,000. Now these are all averages, but these are the averages that the company reported to the union. Then the dividend went from $0.31 to a dime, when you are on a fixed income a loss like this is devastating. The $2,400 they encountered on was suddenly under $800. How did they make up a 30% reduction in this income?

Over $600 they have no more. What do they do? They sell their stock at $7 a share, cutout essentials, get a job, the average age of one of my meetings is approximately 72 years old, so that option is out. I have been told that many of them sold the stock, on top of that they went for years without sole security increase, but the cost of food utilities and many other things still went up. So, here we are five years after the crash and the company is almost back to normal except for the stock of course and everything is great, everything is looking up.

You have even said in recent press releases that you have up to $12 billion in cash and you’re looking for investments, well I have a suggestion, why don’t you invest in the people who built your company, your retirees. I can remember in the area plant in the mid-70s. The management Rick Richardson was an in charge of the plant back then, he came to us and he says we have this modular locomotive that we want to put into production and see if we can take somebody share away from DMD at that time we had 15%. By the mid 80s, we had 85% of the business like we do today and EMV had 15%.

I got all around the plant [to my] job and I can never remember Reggie Jones or Jack Welch or any other Board of Directors in that shop making locomotives. We made the locomotives, we turned it around, it was our sweat, it was our labor that turned it around and made this company what there is today.

So, yeah we did that for you, your retirees have not recovered. The devastation that happened in the crash is still affecting them your retirees were hit hard. They need to be bolstered by a substantial structural raise in their pensions pointed towards the people with the smallest pensions help them out because they are the people that turned your company around.

Keith S. Sherin

Thanks, Ron.

Ron Flowers

Thank you

Jeffrey R. Immelt

Mic for number one, yes sir.

Justin Danhof

Good morning. My name is Justin Danhof, I am representing the National Center for Public Policy Research. We’re a free-marketing tank in a company shareholder. I appreciate the opportunity to speak with you today. Mr. Immelt, last September, the Molokai business general reported that Obamacare’s 2.3% excise tax on revenues of medical device companies could cause GE Healthcare services between $100 million and $150 million per year.

GE is one of the largest lobbyists in the medical device arena and surely you recognized the market evils of this tax. Currently lawmakers from both sides of the political aisle support revoking it, they just differ on the means to do so. I want to present you with a financially responsible proposal to accomplish or appeal of the medical device excise tax and I hope you will support it.

GE is the market leader and wind turbine production, a market that relies heavily on federal subsidies. The joint committee for taxation estimates that the production tax credit for wind will cost the American taxpayers $7.8 billion between 2013 and 2017. However, some believe, even some within the alternative energy industry that these subsidies are providing perverse incentives that hamper wind energy’s true potential.

Writing in the Wall Street Journal, Patrick Jenevein, CEO of the Dallas-based Tang Energy Group explain, “As long as these subsidies in tax credit exist, clean energy executives will likely to spend most of their time pursuing in advanced legal and accounting methods rather than investing in studies, innovation, new transmission technology and turbine development”. So, would you support a financially responsible proposal they would repeal the medical device tax, while simultaneously putting an end to federal wind subsidies? Doing so could save these company hundreds of millions in the coming years from the medical device tax and what help move wind energy towards true marketplace competitiveness like the year, which I have to think about that.

Jeffrey R. Immelt

Really, it’s the first, I have heard of it, it’s interesting. I’m not going to commit one way or the other today, but I will tell you we’ll continue to invest in R&D around wind turbine. So we want to have the most efficient wind turbines that are available anywhere in the world. Thank you. Kevin?

Unidentified Analyst

Yes, my name is Kevin [Marsh] I spoke before 19 years at the Annual Meeting. I just like to say that a moment of silent isn’t auto, those people that were maimed in the Boston Marathon, the shirt I have on was worn by marathoner, and it of course, ask question, and ask us to say, hey GE we need a class to living in our pension plan, which is what Ron was talking about. So there was a tragedy in Boston, I just want to have a moment of silence.

And just as the Board of Directors were brought up and they were introduced on what they have done for the company, I would ask to every GE retiree here to stand up, because just as Ron said, we are the people that have made this company, the company that it is. And I want to thank you Jeff for attending that meeting we had in Fairfield, Connecticut. We’ve been having annual meetings with your team John Lynch, Mike [Xanthios] and then yourself attended the last time out.

And in that process of talking about retiree problems, we actually have solved the number of GE problems that by talking we can get something done. So I’m looking forward to that kind of problem meeting again this year, and I hope you can make it. If you can, you can or if you can’t, you’re not, you can’t, but just like the Hoyts at Boston marathon all retirees have the determination to increase benefits and pensions for GE retirees. Thank you.

Jeffrey R. Immelt

Thanks, Kevin. We have on mic one.

Unidentified Analyst


Jeffrey R. Immelt

Yes, sir.

Unidentified Analyst

My name is [Joe Madio], and I just like your comments and the risks involved with the tax on your proprietary property in countries like China and what you’re doing to mitigate those risks. How does that compare with domestic operations? Thank you.

Jeffrey R. Immelt

Again, we believe in the right protection for intellectual property rights. We’re very careful when we invest around the world, in China and every other country. We believe our patent portfolio is critical to the futures company. Dennis we turn you on mic two.

Dennis Rocheleau – Shareholder

Thank you, Jeff. I’m Dennis Rocheleau of Fairfield, Connecticut. According to (inaudible), one of the privileged few – according to the recent proxy vote 5.9%. As much as I wanted to improve corporate governance, the character of GE is demonstrated by its treatment of its employees and retirees is of even greater importance to me. As I wrote to you personally, Jeff, the Company’s September announcement that it was breaking certain retirement healthcare benefit promises was deeply disturbing to me. I asked you for a seat at the table before I was put on the menu, being afford at none, I have crashed this venue.

The lawyer acknowledges that Section 5.4 of the 2012 Benefits handbook for GE pensioner healthcare options at age 65 gives the company the right to amend the retiree healthcare plans for any reason. But the changes set forth in John Lynch’s September 2012 letter are so dramatic and utterly surprising to some GE retirees and long service employees. I feel compelled to repeat the words of Edmund Burke that I quoted in a different context five years ago in [Ire]. It is not what a lawyer tells me I may do, it is about what’s humanity, reason and justice tell me I ought to do.

The proposal of that issue constitutes the sea change in company behavior contrary to all reasonable expectations and experience. It gives little consideration to recent retirees now left with no GE post retirement, post 65 healthcare who made irreversible retirement and financial decisions based on the GE benefits described in their retirement papers. Papers, which made no reference to the possibility that this coverage could be terminated for any reason.

The company executives would propose such actions and the board would approve them is astonishing to me given the absence of a financial imperatives such as impending bankruptcy or several years of unprofitable performance or even wildly escalating healthcare expenses for the company. When the initial notice of this evisceration did not even attempt to quantify the financial impact on the average salary employee or retiree and the concomitant enrichment of the company, I knew the news had to be very bad for current and future retirees that lack of courage, candor and transparency on the company’s part was frankly insulting.

A passion for cutting excessive costs is an adorable quality, if honestly expressed and intelligently administered, but branding commitments to long service employees the legacy costs, does not give the company license to fleece retirees while countenancing the use of chartered or company aircraft to shadow the global express on certain international trips, where is the competitiveness in that.

I’m fortunate enough to enjoy a substantial pension for which I work for 36 years and I value every penny. Being asked to shoulder and unanticipated $50,000 bill in additional future costs is something of considerable consequence to even me. For many other near and current retirees, the financial impact of losing coverage they counting on is much, much greater. In the case of some married future retirees who will lose eligibility for retiree life insurance the value is a $125,000 or more. If anyone here today would like a more vivid description of this pernicious nature of this change, see me after the meeting.

Suffice it to see that the changes which reduce the company’s post retirement health and life benefit liability by $832 million comes with a high personal price tag for each of thousands of current and future retirees. I believe I had earned my benefits but I did not appreciate this how fragile approaches I really had on them. Naively I believe the mantra, I mouthed on behalf of GE at the bargaining table over three decades to representatives of tens of thousands of employees and retirees, promises made by GE or promises kept. In retrospect, I did not perform as well as I thought I had. I fail to live up to my standard of being candid and forth right with union representatives whom I always respected even when I often disagree with them.

Several efforts to establish a reasonable dialogue with the company about this decision to understand the context and justification for it and to explore acceptable alternatives to it had been rejected. The protocols of fair treatment for loyal long-term salaried employees that I believe should exists have been unceremoniously abandoned. In the eyes of many retirees to whom I have spoken most of who are shareholders, the company defaulted on its obligations, turned its back on its traditions and renounced its off stated integrity values.

Accordingly, I would like very much to have answers for three questions which in the interest of giving others the time to talk about issues of importance to them. I will submit to you in writing with the expectation of a reply. For now, I ask only this, where in your view does the process of benefits reduction logically end other than at the trust fund protected portion of our pensions? Thank you.

Jeffrey R. Immelt

Thank you, Dennis. Thank you. Mic for number one?

Unidentified Analyst

Good morning, [Greg Reinhart], shareholder, I think 3,800 shares. A question for Mr. Sherin. Mr. Sherin, you’re the one made a lot of statement regarding the dividend. Okay. Will you acknowledge that, that dividend is not even close to what was paid in the fourth quarter of 2008?

Keith S. Sherin

That’s correct.

Unidentified Analyst

Okay. There is a lot of questions there, okay. I mean you going on about that the dividends, we’re doing this, we’re doing that. Something is wrong if there is a cut and we’ve still not even been restored to what the original dividend was?

Keith S. Sherin

We’re still working on improving the performance of the company in growing the dividend as we grow those earnings.

Unidentified Analyst

Okay. And it does bring another question of what were you doing with the business at the time that you would put it in that kind of a situation that the dividend gets whacked that hard and it still hasn’t been restored?

Keith S. Sherin

We did have a significant financial services business and we ended up with a lot of stress in the financial crisis. So, as did many others and I think we’ve come out of it stronger than almost anybody else and we got a great business going forward.

Jeffrey R. Immelt

$45 million into the financial service business, as I mentioned …

Unidentified Analyst

Right. I have asked you…

Keith S. Sherin

… on the lobby. I mean that’s really the answer.

Unidentified Analyst

Okay, well there is another question though regarding all that is the idea that, okay, as a capital allocator, which I am, I make different investments in different companies, I did not deal with this with Johnson & Johnson, or Procter & Gamble, or Coca-Cola, or McDonald's, or Wal-Mart they all raised their dividend. So the question comes what was going on and what were you all doing that you could not continue the dividend, I mean there is a lot of questions there what…

Jeffrey R. Immelt

We understand

Unidentified Analyst


Jeffrey R. Immelt

Financial crisis money went in GE Capital, we very much look forward to it, continue to increase the dividend.

Unidentified Analyst


Jeffrey R. Immelt

Thank you very much. Okay, Ron one more

Unidentified Analyst

It’s just quickie. I would be remiss if I didn’t say something. The Erie plant of General Electric Company, it makes the best locomotives in the world. We have for a lot of years and about year and a half ago; the company gave the Erie plant an award for being one of those most profitable long-time contributors to the company. Along that same time that they gave, this award they said oh, yeah by the way we’ve started building this plant in Texas to build locomotives.

But you don’t have to worry because the only thing we’re going to use this plant for is overflow, if there is too much work for this Erie plant that does such a good job and makes us so much money. Well about three weeks ago, they announced that oh yeah, by the way, we’re going to move the number one brand new line for locomotives out of Erie to Texas and that kind of sounds like you speak (inaudible).

And I am speaking for the membership in Erie, when I’m saying it’s wrong, this is our company, the people in Erie that work for our company, we had 2000 to 3000 people [agate] the other day. You’re taking a known quantity, a known entity, moving at the Texas and who knows what’s going to happen after that, I believe it’s wrong, I think it should stay right where it is, we need the thousand jobs that you say you are eliminating in Erie.

Jeffrey R. Immelt

Thanks [Ryan]. Thank you. So again, thank you this morning. New Orleans is been a great host to the shareholders meeting we thank everybody for their time and attention this morning. Again we feel very good about how the company is positioned. Thanks for all of your great support. The meeting is adjourned. Thank you.

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