GE Capital Services, General Electric's massive financial services unit, is poised for a new era of streamlining under a new leader.
Gary Wendt, the unit's longtime chief executive who oversaw a huge buildup in the unit's business, stepped down Tuesday. Dennis D. Dammerman, General Electric's chief financial officer, was named to succeed him.
Executives said during a conference call that the $250 billion-asset unit is going to concentrate on "eliminating redundancies," often parlance for paring down divisions and firing employees.
"We've acquired a lot of companies in the last five or six years," said Dennis J. Nayden, who was promoted from chief operating officer to chief executive of GE Capital Corp., the finance unit of GE Capital Services. "Now we're presented with considerable opportunity to look at backroom operations."
Mr. Dammerman, 53, has often been asked to step in during difficulties at General Electric. In 1994 he was assigned to clean up GE's Kidder, Peabody & Co. after the unit reported trading losses. Kidder Peabody was eventually sold to PaineWebber.
GE Capital Services oversees not only the financial services behemoth GE Capital Corp., but also insurers GE Financial Assurance Holdings Inc. and GE Global insurance. GE Capital Services contributed more than 40% of General Electric's earnings last year, bringing in $3.3 billion.
GE Capital Corp., a commercial, industrial, equipment, and consumer lender, has more than $106 billion in receivables and competes heavily with banks in the credit card, mortgage and auto loan industries.
The unit has been credited with succeeding in international markets where banks have tried and failed. GE Capital Corp. this year purchased a finance company in Germany and a mortgage company in Poland.
"They're very entrepreneurial and have a fast decision-making process," said Charles Wendel, president of Financial Institutions Consulting.
Mr. Wendt strongly believed in "the strength of individual business lines," said Mr. Wendel.
The philosophy that may have run counter to General Electric's desire to centralize operations.
The departure of Mr. Wendt, 56, had been rumored for months. Observers say there has been friction between him and Mr. Welch, and that he may have been forced out.
The company said Mr. Wendt "agreed to resign." Mr. Welch said the company's statement "speaks for itself, and we're looking forward."
Mr. Wendt has been chief executive of GE Capital Services since 1986, and has been credited with much of the unit's success. "He did an absolutely super job," said Samuel L. Eichenfield, chief executive of Finova Group Inc., a Phoenix-based finance company.
Mr. Wendt is a "genius" said Financial Institutions Mr. Wendel. "It's never a positive when someone like that leaves the scene. Where do you go from here?"
Mr. Dammerman has a long history with the company. He was named CFO in 1984, making him the youngest in the company's history.
Mr. Nayden, the new GE Capital Corp. chief executive, has worked closely with Mr. Dammerman on the Kidder, Peabody cleanup.
GE chief executive Mr. Welch will be resigning in two years, the company has said, and some see the shake-up as a way of preparing for his departure.
Last year Mr. Wendt's massive divorce settlement made news. A judge ordered him to give his ex-wife half his assets, or $20 million, saying her role as a corporate wife was intrumental to his job.
