GE feeling the squeeze in Asia
Richard Milne | Wednesday, 28 May 2008
FT Syndication Service
PARIS: General Electric, the world's largest industrial group, is starting to feel the ripple effects from the global financial crisis in its Chinese and Indian operations.
Nani Beccalli, head of GE International, forecast economic growth would slow in the two Asian countries. This had already had an impact on the results of the conglomerate, which derives more than half its revenues from non-US businesses.
"The credit crunch is affecting everybody, including China and India. Internationally we grew by 22 per cent last quarter [in revenues]. But we could have grown by 27 per cent or 30 per cent so, yes, it had an effect," Mr Beccalli told the Financial Times.
The comments mark a shift in GE's assessment of emerging markets in Asia and highlight the nervousness some industrial executives have shown about a possible slowdown in growth there.
Many of the world's largest industrial companies, such as GE, Siemens and ABB, have enjoyed very strong growth in markets such as China, India and the Middle East.
But some of them are so dependent on that growth that even a small slowdown in those markets could knock several percentage points off their growth - as happened at GE, whose international business provided one of the good points in a disappointing first quarter.
Other industrial companies are upbeat in public about Asia, but some are still worried. Peter L
PARIS: General Electric, the world's largest industrial group, is starting to feel the ripple effects from the global financial crisis in its Chinese and Indian operations.
Nani Beccalli, head of GE International, forecast economic growth would slow in the two Asian countries. This had already had an impact on the results of the conglomerate, which derives more than half its revenues from non-US businesses.
"The credit crunch is affecting everybody, including China and India. Internationally we grew by 22 per cent last quarter [in revenues]. But we could have grown by 27 per cent or 30 per cent so, yes, it had an effect," Mr Beccalli told the Financial Times.
The comments mark a shift in GE's assessment of emerging markets in Asia and highlight the nervousness some industrial executives have shown about a possible slowdown in growth there.
Many of the world's largest industrial companies, such as GE, Siemens and ABB, have enjoyed very strong growth in markets such as China, India and the Middle East.
But some of them are so dependent on that growth that even a small slowdown in those markets could knock several percentage points off their growth - as happened at GE, whose international business provided one of the good points in a disappointing first quarter.
Other industrial companies are upbeat in public about Asia, but some are still worried. Peter L