With shares of his company's stock down 78% in the past year, General Electric (NYSE: GE) CEO Jeffrey Immelt is deservedly on the hot seat. But in an interview with Bloomberg, Immelt remained defiant in his belief that he's the right man for the job.

"You're talking to somebody that earned $18 billion last year on $183 billion in revenue, that's outperformed the S&P 500 from a revenue and earnings standpoint over the last five years," he said. "But I don't think any CEO worth his or her salt can sit back and say, it happened to everybody so it's okay."

As I contemplate General Electric Company (NYSE: GE) CEO Jeff Immelt's decision to go without his $12 million bonus, I wonder about what his predecessor, Jack Welch, would do if he had to decide the fate of his protege. With respect, I think the answer is Welch would fire Immelt.

Jack Welch was popular with investors because GE always seemed to post double-digit earnings growth that beat analysts' estimates by a penny. These steady results caused GE's stock price to beat the market averages every year. For Immelt, things have been different. Since taking over in September 2001, GE's stock has lost 73% of its value -- falling from $40 to $10.81.

We've become used to it. Almost everyday we reach levels not seen in decades. Whether it's employment statistics, market data or downgrading of the outlook on General Electric Co. (NYSE: GE) -- it is a first in 52 years.

On Thursday, two days after GE had provided outlook for 2008 and 2009, S&P credit rating agency lowered the outlook for GE and GE Capital from stable to negative. While it affirmed their Triple-A ratings, it also said that there is a one-in-three chance they could lose them because of concerns about cash flow and funding for GE Capital as global conditions worsen. Moody's credit rating agency kept its outlook on GE as stable.

GE had already added $5 billion in funds to the finance unit to help meet the new leverage ratio this month. S&P is concerned it may need to add more. Does GE have the cash? Well, GE isn't planning to cut the $1.24 annual dividend, which is estimated to cost around $13 billion. As it stands now, with the current new outlook the dividend would consume most of GE's free cash flow next year. So while execs would like to keep the dividend, there is more cash to play with. Somewhat worrisome, though, is the fact that GE will no longer provide quarterly guidance.

For me, today is a day of great optimism. I'm immensely relieved that Obama was elected President and I expect great things from him. In fact, I think his win could increase optimism about the future of America enough to give the economy a much-needed boost.

Years from now, historians may look back and see Obama's election as kicking off a new virtuous cycle where people feel more upbeat, so they buy a few more items, and businesses do a bit better and hire more and...

Okay, I'm getting ahead of myself here. But while pondering what stock I would buy as a play on the new Obama America, my pick would be General Electric Co. (NYSE: GE). GE has long been a play on global economic growth. It is a huge conglomerate with businesses in consumer finance, media, energy and household appliances -- just to name a few. Its returns pretty much track the S&P 500 or other broad market indexes over time (although with more volatility than the index).

Given recent months of financial crisis and worldwide economic slowdown, GE's stock is cheap. It is trading today around $20 a share, a 50% drop from a year ago. It's price-earnings ratio is just 10 and its yield is a hefty 6%.

General Electric (NYSE: GE) CEO Jeffrey Immelt is a hard man to pin down. He speaks in generalities, and what he says often does not turn out to be true. He has made sweeping comments about how well the company will do providing infrastructure services to countries like India and China. How often does he give a precise update on how that is going?

Now Immelt is talking about cutting costs and expenses at GE. According to The Wall Street Journal (subscription required), in an interview yesterday he said, "Costs will be lower in 2009 than in 2008. That will be true across the board." He offered the observation that the cuts would include employees. How many? No one knows, and he is not saying.

Usually when a chief executives says his company will cut people, he either says how many or what percentage of the workforce it will be. That is not the case here. Immelt is keeping that to himself.

What is more remarkable than the man's reticence is the fact that the company did not move sooner. GE's results have been more modest that people would like The third quarter numbers were down right troubling. GE must have seen that coming. Where were the layoffs of thousands of people back then?

Hard to say. Immelt is cagey.

Douglas A. McIntyre is an editor at 24/7 Wall St.

As a General Electric Company (NYSE: GE) shareholder, I am not happy with the loss of 32% of my capital under the current CEO. The previous two CEOs -- Reg Jones and Jack Welch -- have changed GE under their reigns. Thanks to the fall of Communism, many countries -- such as China, Russia, India and others -- are investing over $1 trillion in their efforts to bring their people into the 21st century, according to the Courier-Journal. Thanks to its Infrastructure unit -- which provides jet engines, power plants, locomotives and other products -- GE is well positioned to take a big share of that opportunity.

Today's GE earnings report confirms that. The infrastructure unit boosted its revenues 26% to $17.5 billion in the second quarter of 2008 and its segment profit climbed 24% to $3.2 billion. Unfortunately, that outstanding performance was masked by all the other flotsam in GE's portfolio. Now, according to Reuters, GE stock -- which had been up 2% in premarket trading after meeting its 54 cents a share outlook for Q2 earnings from continuing operations -- is down 1.3% due to a forecast of flat to down third-quarter profits at GE's finance units and an uncertain outlook for capital markets.

General Electric Company (NYSE: GE) is scheduled to report second quarter earnings this Friday. Ten analysts that Zacks surveys expect GE to make 53 cents a share, the same as it did in 2007. Given that 0% growth rate, GE's forward Price/Earnings ratio of 12.1 seems a bit on the high side.

But after the spanking that CEO Jeff Immelt took after missing in the first quarter by 13.7%, he could be guiding analysts lower only to surprise them on the upside. This makes me wonder whether analysts have a higher, whisper number in mind. GE stock is down 32% since Immelt took over on September 7, 2001, but with the exception of the first quarter, over the last five years GE has increased earnings at an 8.1% annual rate.

If it got back on that track in the second quarter, then investors would expect GE to earn 57 cents a share, instead of the official 53 cents. In that case, GE stock would fall unless it exceeded 57 cents a share. I have not been able to determine whether there is such a whisper number floating around Wall Street, but there's no question in my mind that Immelt cannot afford to report a number less than 53 cents a share if he wants to keep his job.

General Electric(NYSE:GE)is blaming its huge Q1 miss on the financial markets, and Bear Stearns NYSE:BSC) specifically.

Two weeks before the end of the quarter, GE CEO Immelt did a webcast in which he said the quarter was great. Implication? Load up on the stock. And now everyone who did is hosed.

What happened? Jeff Immelt wants us to blame those nasty market conditions, the ones that were apparently unforeseeable two days before they occurred. Please. Jeff and GE shouldn't compound this disaster by further damaging their already clobbered credibility. The credit crunch started last summer.

But GE's problem isn't just the credit crunch and Bears' collapse. For example, NBC Universal was also a laggard. It posted revenue growth of 3% and profit growth of 3%; in January, GE had predicted 10% revenue growth and profit increases of 5-10%.

NBC U isn't the most important part of GE's portfolio, so it's understandable that during the earnings call this morning, analysts didn't demand an explanation of what happened with Jeff Zucker's unit. But we sure would love an answer. The best-case scenario for the NBC U division: Zucker and his lieutenants underestimated the effects of the writers strike. Worst-case scenario: It's reflective of a larger decline in the advertising business.

UPDATE FROM CONFERENCE CALL: Pathetic GE: Blame Bear Stearns For Our Mess.

See Also: NBCU: Strike Has "No Noticeable Impact" On Q4

Peter Kafka is managing editor at Silicon Alley Insider.

The Wall Street Journal ran an article this morning debating the pros and cons of breaking up General Electric (NYSE: GE). Various analysts expressed their opinions about the merits of keeping the mega-conglomerate intact, and the value unleashed if broken up into separate entities. I have written a few posts about this very subject and the reader feedback has been quite emotional and passionate -- bending both ways.

The hard fact is that GE stock has under-performed the general market for the past six years. The Dow Jones is up 35% and GE stock is flat. Millions of shareholders have a long history with GE's stock, as this past superstar was an incredibly well managed company and the stock's movement over the years reflected such.

But that was then and this is now. Where do we go from here?

One of the Cardinal Rules of investing is, do not fall in love with any stock or company. You love your kids, your ball teams, your pets, but never fall in love with a stock. Love has a way of clouding one's judgment. General Electric will always be regarded as one of America's greatest success stories. GE did it the right way, year in and year out. But stock holders have only one reason to own shares of any company: can management grow the revenue and earnings base to make the investment more valuable? Simply stated, but true as ever. Yes, GE pays a nice dividend of $1.12, giving a yield of 3%, but 3% can be achieved with other investments.

Doug McIntyre this morning posted on General Electric Co.'s (NYSE: GE) decision to cut $750 million in costs from its NBC Universal unit. What interests me about this story is the signal it sends to Jeff Zucker, chief executive of NBC Universal's television group, that his time at the helm is likely over.

As a GE shareholder I have been less than pleased with the job that current CEO Jeff Immelt has been doing. GE stock is way below its 2001 peak and while it has recovered from its low, the logic for having all of GE's diverse businesses together strikes me as elusive. Thus GE is suffering from a conglomerate discount.

I think Immelt has had his chance but he's clearly failed to turn GE into a growth stock because he has been unable to re-conceive GE's corporate strategy as his predecessor did. I also think it's time to jettison the formerly admired Jeff Zucker, protege of NBC Universal television group's chairman, Robert Wright. With the success of Walt Disney Company's (NYSE: DIS) ABC's Dancing with the Stars, Grey's Anatomy, and Desperate Housewives, it's a mistake to think that networks can't create popular programs.

It's just that NBC has lost the edge it enjoyed in the 1990s. And it's time for changes at the top.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He owns shares of GE, not Disney.

Jack Welch may have made a bad call in choosing Jeff Immelt as his successor at General Electric (NYSE: GE), according to today's USA Today.

No question, GE's stock has been a disappointment over the last five years, but it's silly to judge Immelt based on the stock price performance of the companies that his rivals went on to lead. As Warren Buffett has quipped -- if you put a great manager in a lousy business, the business always wins. By that logic, comparing Immelt to his predecessor seems a more apt comparison.

And by that standard, I'd give Immelt a gentleman's C. For managing Wall Street, I'd give him a C- -- compared to Welch's A- -- and for managing GE's financial performance, he'd get a B-, compared to Welch's A.

Either General Electric Co. (NYSE: GE) needs to do a better job of explaining its business to investors or it needs to change its corporate strategy. As reported in today's New York Times [subscription required], despite its efforts to explain the value of its processes, GE's stock remains 43% below its August 2000 peak of $58.69.

To be fair, GE did well in 2003 and 2004, beating the market while posting 30.7% and 20.7% returns respectively. However, in 2005, the stock fell 1.4% and it is down 3.9% so far this year.

GE, which under Jack Welch and previous leaders, has been perceived to be a global leader in management techniques, is now trying to sell itself to investors based on four "processes":

• Innovation/Cross-Selling. GE notes that its research department has developed new products and services which it uses in its different divisions. For example, it developed sensors used in medical devices and security systems. And it cross-sells financing and fleet management;
• Lean Six Sigma. GE has been using this technique for streamlining business processes and cutting costs for years. Under current CEO Jeff Immelt, GE has added Lean to the Six Sigma mix;
• Net Promoter Score. GE scores its customers on whether they would recommend GE; it labels each as a detractor, neutral, or a promoter; and it calculates the score by substracting the detractors from the promoters; and
• Deep Bench. GE has been allowing its operating managers to present at analyst meetings rather than requiring Immelt do all the presenting. This is intended to let investors know that GE has many talented managers.

Every time we write a critical post about Time Warner or Microsoft, or expose a negative fact, rumor or analysis, the refrain renews: fire the CEO! Dick Parsons, that lucky guy, gets the brunt of our readers' anger. He's screwing up Time Warner, you've told us time and time again, he should go. So say you of Microsoft's Steve Ballmer, he of the explosive personality, sweaty armpits, and billions in inexplicable operating expenses. Sometimes it's Jeff Immelt of GE, or even well-loved figures like Meg Whitman of eBay.

But usually, it's Dick. Today is no different. With 2nd quarter earnings coming out next Wednesday, and everyone wondering about the company's plans with its AOL unit, Joan Lappin from Gramercy Capital Management demands in the pages of Fortune, "Save Time Warner, Fire Parsons."

It's nothing new, but it's worth evaluating her reasons for the radical battle cry. She argues that Parsons is all about politics (in fact, he's rumored to be angling for a 2009 run for New York City mayor), a skill that helped him avoid perishing in the "shark tank" that has been Time Warner's boardroom for the past decade and earned him credit as being a "Teflon Don," but has failed miserably to maintain Time Warner's legacy as a creative, entrepreneurial culture where good managers were rewarded "generous financial incentives for producing solid earnings growth." Fire Parsons, she says, and maybe that creative culture can be revived.

I honor her passion, and agree that the creative, entrepreneurial company always wins over the political shark tank. But who, Joan, is positioned to take the helm from him? That question must be answered before anyone brings out a block and starts chopping.

I'm listening to GE CEO Jeff Immelt speak at the annual shareholder meeting, which began at 10 a.m today. GE graciously decided to broadcast Immelt's remarks over the web (you can see the archived version, yay GE!), even though the actual meeting is only open to shareholders and not bloggers (boo, GE).

Immelt just candidly discussed GE's lagging share price -- no need to hide that in front of an audience of shareholders. He pointed out that the stock has underperformed the market over the past five and one-year periods (but matched the market over the past three years). He attributed that to the "blue chip blues" that many large companies are facing now. (And it's true, mega-cap stocks are getting cheaper as they improve their financial performance, but investors still stay away).

"The company is ahead of the market.," said Immelt. He believes the stock price will eventually follow the strong performance of the company. Big surprise, I know. But he also said Wall Street agrees and pointed to 19 out of 20 analysts that rate GE stock a buy.

To make the folks feel even better, Immelt also told them that he "has skin in the game." He has 1 million shares now and will get lots and lots more if the stock price increases. But I'm going to have to check that detail. He can't possibly have as many as I thought I heard him say.

All this is making me think I really should buy some GE stock (see my bio for more on my holdings and investment strategy). Plus, then I'll be able to attend the shareholder meeting in person next year!