Power Failure: The Rise and Fall of an American Icon

by William D. Cohan

Before a group of about eighty GE executives in Crotonville, at something called LIG—for Leadership, Innovation, Growth—Pralle presented his recommendation to sell half the portfolio. “There are lots of people who are very interested,” he told Jeff. The purpose of the LIG was to have GE executives from across the company join together to swap ideas about how to think about their businesses in a new and different way. “We’ll book a $5 billion to $10 billion gain,” he said. “And we’ll have much less exposure to real estate, particularly to those things that we think will be a risk during the next downturn.” Jim Colica, the GE Capital chief credit officer, agreed with Pralle: GE had too much exposure to real estate. Goldman Sachs, which was informally advising Pralle, agreed, too, and was prepared to sell a big chunk of the portfolio. But Jeff said no.