hey, so for my last post I decided to write about GE selling its plastics sector. I got this article from : http://news.yahoo.com/s/ap/20070521/ap_on_bi_ge/ge_saudis_plastic;_ylt=Av_1A6mcvJVMczrB1B3aSapu24cA
The article I choose is called Saudi firm buys GE Plastics for $11.6B. The article talks about how General Electric Co. sold its plastic division to a company in Saudi Arabia for 11.6 billion dollars. With the money GE makes from this deal, GE plans on inceasing its stock buy back. They plan on buying back $7 to $8 billion worth of stock. GE's CEO said that this would be a good decision in the long run of the company. This announcement actually caused the stock of GE stocks to go up 27 cents to $37.23. The article then basically talks about some historical facts about the company. It talks about how the plastics division was started 1930s. The platics created from this division is used in automobiles, health care and consumer electronics. Unfortunately the division has been struggling since 2004 due to an increase in costs of natural gas.
After reading this article, the first thought that came to mind is outsourcing. Outsourcing has been a big issue in the past few years. Now that a foreign country owns this department, I wonder if they are going to keep all aspects of this business in America. It would be very unfortunate to have more people lose their jobs due to forgein invesments. Since the plastics department employees about 10,000 people, it would be bad for the economy for these people to lose their jobs. I am also interested in seeing what the company plans to do with this division. GE predicted that the division was worth only about 6 billion. So there must be a good reason why the company paid so much for it
