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00:00:01
>> Shares of General Electric, the oldest of the blue chips, coming off of their worst one-day-drop in nine years, compounding pain for investors. GE stock price has plunged 50% over the last 12 months. And the company's power business is to blame, as Reuters correspondent, El Scott explains.>> GE's power business is about a third of their total revenue, $35 billion a year.
00:00:26
And what's happening is, the demand for big power plants is dropping like a rock. Most people that I talk to are not aware that renewables have become economically comparative with big fossil fuel power plants. They've always thought wind and solar were much more expensive to install and to run than those other plants.
00:00:49
The fact is they've now become competitive, and in some cases, less expensive than electricity from even the most efficient, new natural gas burning plants. So what's new here is that the connection between those trends and GE's efforts to restore its business, we can see two problems. One is, it's harder to sell new power plants, and we've seen about a 75% decline in annual sales of big power plants.
00:01:20
And number two, as old plants, coal and natural gas get shut down because they're too expensive to run in this new environment. It's harder to make revenue from servicing them.>> Which means, the whole fossil fuel ecosystem that supported General Electric for over a century is eroding. And some investors want GE to break up to limit the fallout from the declining business.