Subprime woes take toll on GE results

The Financial Times reports:

The US subprime mortgage crisis hit General Electric on Friday, wiping $373m from the industrial conglomerate's first quarter profits and prompting its executives to warn of an incipient "bubble" in global credit markets.

GE said it had replaced the senior management team at its mortgage unit, and would reduce its workforce by around 1,000 people, or 40 per cent.

GE will also cut by half the loans it makes to less than $15bn this year - a sign of its belief that the subprime market has yet to hit the bottom.

"We have got to get our house in order," Keith Sherin, GE's chief financial officer, told the Financial Times.

The story says it all.