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Finance

GE Joins Boeing in Pension Freeze, Stock Falls

On October 7, GE (GE) announced a freeze on the pensions of 20,000 full-time employees to meet regulatory and financial targets. The company is also freezing supplementary benefits for 700 employees and offering a one-time payment option to 100,000 former employees.

Together, these moves are expected to reduce GE’s pension funding deficit by $5 billion–$8 billion. GE’s pension plan was underfunded by $27.2 billion as of June 30, 2019. It also expects the move to help reduce its net debt by $4 billion–$6 billion. GE’s CEO, Larry Culp, has given the company a target of net debt-to-EBITDA of less than 2.5x.

The move to freeze pensions follows last month’s BHGE stake sale and subsequent $5 billion debt tender offer. In August, the company sold its aircraft leasing arm, PK AirFinance, to trim GE Capital and focus on its core industrials business.

View more information: https://marketrealist.com/2019/10/ge-joins-boeing-pension-freeze-stock-falls/

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