It's time to make some major changes, something I have said before. I am not the first to suggest this and I am quite sure I will not be the last. General Electric (NYSE: GE) needs to take some serious action to add shareholder value. Apparently, Jeffrey Immelt was very embarrassed after last quarter's earnings announcement, when the company reported disappointing earnings following Immelts' own earlier statement that they would hit their targets.

After GE sells its kitchen and laundry appliances, which is on the block now, it will still own business-producing aircraft engines, locomotives, electric distribution and control equipment, generators and turbines, and medical-imaging equipment. GE is also one of the preeminent financial services companies in the U.S. Commercial finance, consumer finance, and equipment financing and leasing together comprise the company's largest segment. Here is the formal list from the company web site:

• Appliances
• Aviation
• Consumer Electronics
• Electrical Distribution
• Energy
• Finance – Business
• Finance – Consumer
• Health-care
• Lighting
• Media & Entertainment
• Oil & Gas
• Rail
• Security
• Water

It seems to me that the company needs to be consolidated into its core competency areas that offer the most growth potential. If consumer electronics is not being offered up with the appliances group, it should be -- as should the media and entertainment (NBC-Universal) group. I am not sure the lighting division is essential either.

If you made these changes you would be left with divisions focused on water, power and advanced medical devices. That is the core. I think the financial elements should be maintained; most large conglomerates have such divisions, and GE's is among the largest.

I would take the billions of dollars from these sales and create a General Electric "sovereign fund," just like China and Dubai. Why not? GE has better cash-flow than many countries and is more organized. In these days of financial stress, it is the best of times to go shopping for real estate, more water resources, and even some high-tech companies.

Given GE's tech-related, heavy industry enterprises, one company I would suggest is Reliance Steel & Aluminum (NYSE: RS), a company GE probably already buys a lot of finished products from. This company has been prospering greatly in the past few years and looks to continue. This would be a much better fit than entertainment.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of GE.