[Aloha]

The article gives the answer early on - the company is still in a phase of change from selling GE Capital - for 20 years they were used to using Capital as a source of excess cash to paper over other temporary market issues elsewhere in the company - they no longer have that ability - so now the cyclical nature of normal business will show directly on their balance sheets and statements.

GE will probably be just fine - in a decade.

[xapata]

I'm dubious that business has a cyclical nature. It's hard to distinguish a random walk from noisy waves.

[Aloha]

Demand for certain goods and commodities are cyclical - I design dispatch consoles, we tend to get customer verticals in clusters - public safety, power/utilities, transportation and it continues in a cycle, based on replacement intervals (on a 20 year lifetime) - I know Motorola sees similar cycles too - they'll oscillate between public safety and commercial markets.

I know there are similar business cycles in aviation, power generation and industrial controls.

[xapata]

If I understand you correctly, you're suggesting that the demand for dispatch consoles follows a wave with a 20-year period, because the device must be replaced approximately every 20 years? I can believe that for an individual buyer, but for the market as a whole to follow the same period, that'd imply that every buyer made the bulk of their purchases at around the same time. That seems unlikely.

[2sk21]

I agree with your assessment. GE was a conglomerate and as such the various businesses in its control operated on different cycles.

[nervousvarun]

Absolutely agree...also didn't a similar thing happen with GM when they got rid of their internal financing division (GMAC)?