There are more questions than answers surrounding recent reports in the Wall Street Journal and New York Times that General Electric Co. is in the early stages of placing its plastics business on the auction block.
There are more questions than answers surrounding recent reports in the Wall Street Journal and New York Times that General Electric Co. is in the early stages of placing its plastics business on the auction block. The parent company is reported to be seeking bids from as many as six parties, including privateequity investors and plastics firms. Coincidentally or not, the engineering-resins giant also laid off 20 employees at its corporate headquarters in Pittsfield, Mass., the same day the WSJ report was published. The key parties— including GE and Goldman Sachs, the investment bank hired by GE to find buyers—are mum on the subject. However, a recent statement by GE chairman Jeffrey Immelt suggests that the plastics unit is no longer seen as a highgrowth profit contributor and doesn’t fit GE’s ambitious growth strategy. In a quarterly assessment late last year, Immelt said GE would “invest only in specialized higher-margin plastics, not the commodity plastics in its portfolio.” That left it unclear whether GE would divest the entire unit, sell the pieces separately, or even keep parts such as its flagship Lexan polycarbonate business and some higher-performance specialty materials like Ultem polyetherimide and its brand-new Extem TP polyimide, a super-highheat cousin to Ultem.