GE Timeline: Public Assurances, Private Anxiety
In his book about managing the financial crisis, former Treasury Secretary Henry Paulson recounts conversations with Jeffrey Immelt, the CEO of General Electric, during the pivotal months of late 2008. As the government moved forcefully to keep credit markets working and shore up banks, Paulson says Immelt raised concerns about GE’s ability to borrow in the commercial paper market. The portrayal differs from that in some of GE’s statements in public forums and documents from the same period. Related story.
Date | Financial Events | Paulson's account | GE's Public Statements |
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Sept. 7, 2008 | Fannie Mae and Freddie Mac are placed in conservatorship. Treasury extends credit to keep the mortgage lenders afloat. | ||
Sept. 8 |
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Sept. 14 | In a letter to investors, GE says its commercial paper program, which totals more than $90 billion, remains “robust.” | ||
Sept. 15 |
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Paulson says Immelt stops by his office late in the day. “Now here was Jeff telling me that GE was finding it very difficult to sell its commercial paper for any term longer than overnight.” Paulson finds GE’s funding problems “startling." | |
Sept. 16 |
![]() The value of shares in one of the industry’s most venerable money market funds falls below $1, an event called “breaking the buck” caused primarily from losses on Lehman Brothers commercial paper and medium-term notes. Because money market funds are major buyers for commercial paper from GE and other companies, credit fears spread. |
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Sept. 25 | Immelt and other top GE executives have conference call with investors and analysts. Regarding GE's commercial paper market, the CFO says: “You really don’t have any near-term pressure of any magnitude.” | ||
Oct. 1 |
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Oct. 7 | The Federal Reserve Board announces the creation of the Commercial Paper Funding Facility (CPFF), to backstop U.S. issuers of commercial paper. | ||
Oct. 9 | A foreign banker relays concerns about GE’s survival to Paulson. Paulson believes the new Federal Reserve program to buy commercial paper will enable GE to “weather the crisis.” | ||
Oct. 10 | In a conference call, an analyst asks about government bailout actions and the backup capacity for GE’s commercial paper. GE's CFO says the company has a “great broad” commercial paper market: “We haven’t had any trouble funding ourselves.” With regard to government rescue efforts, including the funding facility for commercial paper, the CFO says: “We don’t plan on using any of those.” Immelt adds: “Even with all this volatility, we have never had issues in the CP market rolling our paper.” | ||
Oct. 12 |
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Oct. 13 |
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Immelt calls Paulson and says the Fed's newly announced Capital Purchase Program will hurt GE, whose financing arm is bigger than most banks but not part of the CPP. His people are "nervous," Immelt tells Paulson: “I’m worried about my company and our ability to roll over paper in the face of this.” | |
Oct. 14 | The FDIC creates Temporary Liquidity Guarantee Program to guarantee senior debt of all FDIC-insured institutions and holding companies. | ||
Oct. 16 |
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Oct. 23 |
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Nov. 11 | Treasury announces streamlined mortgage loan modification program. | ||
Nov. 12 |
GE and FDIC reach agreement so that company can participate in the TLGP.
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Dec. 16 | In conference call with analysts, Immelt says GE's use of the FDIC loan guarantee program and other government programs has "been powerful and helpful.” | ||
Feb. 27, 2009 | GE cuts its quarterly dividend by two-thirds to save $9 billion annualized. | ||
March 12 | GE announces that Standard & Poor's cut its triple-A credit rating one notch. |
Source: “On the Brink: Inside the Race to Stop the Collapse of the Global Financial System,” by Henry Paulson; SEC filings; Federal Reserve Bank of St. Louis; GE
Director of Research Lisa Schwartz contributed to this chart.