Move will trim net debt by as much as $6 billion, company says
Falling interest rates complicate one of Culp’s top challenges
General Electric Co.’s pension deficit is the worst in corporate America, hampering Chief Executive Officer Larry Culp’s efforts to rescue the manufacturing icon.
Now, with falling interest rates making his job even harder, he’s doing something about it.
GE said it’s freezing pension benefits for more than 20,000 employees and setting aside as much as $5 billion to cover funding requirements through 2022. The steps will help trim the shortfall by as much as $8 billion, the company said in a statement Monday.
GE’s stubborn pension deficit is among its biggest liabilities, complicating Culp’s efforts to put the Boston-based company on more stable ground. The CEO, who took the helm a year ago, has said debt remains one of the company’s thorniest problems, alongside a slumping power business and lingering insurance liabilities.