Tags: Immelt | Russia | US | China

GE's Immelt: 'I Like Russia Long-Term'

By    |   Wednesday, 17 December 2014 01:09 PM

The plunge in oil prices to a five-year low is making minced meat out of the Russian economy and the ruble.

But eventually things will turn upward in the country, says Jeff Immelt, CEO of General Electric. Russia accounts for about 1 percent of GE's revenue.

"We'd like Russia to be in better shape. I like Russia long-term," he told CNBC.

While the oil price slide is causing problems for countries such as Iraq, Libya and Venezuela, it's not a downer for everyone, Immelt said.

"The needs are still there for [GE products] in emerging markets," he stated. "We're in 170 countries. If gas prices go down, the U.S. gets better, China gets better, India gets better. That's all good for GE."

As for China, while its 7.3 percent economic growth rate in the third quarter represents a slowdown from prior years, that still represents strong growth. "China will be just fine. That's what underpins oil over time," Immelt said.

"We're more leveraged to the United States than any other market. We're a 130-year-old American company [although] we've globalized the company. When one door closes, another one opens," he noted.

"I'd much rather have our position today as an American company. We'll benefit from every ounce of U.S. Growth. We feel great about the U.S. economy. [But] we're extremely well-positioned in other places as well."

Meanwhile, Gary Shilling, founder of A. Gary Shilling economic research/money management firm, says the turmoil in global economies and financial markets sparked by oil's plummet could intensify.

"We very well could have a financial crisis" like 1998, when Russia defaulted on its debt and U.S. stocks endured a 19 percent correction, he told Yahoo.

The oil price drop and the decline of commodity prices in general since 2011 will play a disruptive role, he said. So will the "competitive currency devaluations" going on in Japan, the eurozone and other nations.

"Everyone is devaluing against the dollar and emergency market currencies are collapsing. I think we'll see a lot of financial crises because there's a tremendous amount of leverage out there."

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The plunge in oil prices to a five-year low is making minced meat out of the Russian economy and the ruble.
Immelt, Russia, US, China
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2014-09-17
Wednesday, 17 December 2014 01:09 PM
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