General Electric Suspends New Orders in Iran
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General Electric announced yesterday a moratorium on seeking new business in Iran effective immediately.
GE spokesman Gary Sheffer said that the company was concerned about its foreign subsidiaries “making contractual promises to customers that cannot be kept due to possible developments relating to Iran,” and that its policy would be “re-evaluated as conditions relating to Iran change.”
Mr. Sheffer said that the company would complete current projects contracted with its non-U.S. subsidiaries, like General Electric Hydro in Canada and General Electric Medical Europe in France.
The decision was made by General Electric’s board of directors, headed by Chairman and CEO Jeffrey Immelt, in December 2004.
In November 2004, France, Germany, and the United Kingdom succeeded in persuading Iran to halt uranium enrichment operations as a sign of good faith and the beginning of normalizing relations with the European Union. Iran later qualified its commitment as temporary.
Mr. Sheffer said that General Electric had not sold nuclear products to Iran, and that all General Electric sales in the country have been in compliance with American law. He said that General Electric would reconsider its moratorium on new business in Iran only for humanitarian purposes, and only with the express approval of the U.S. government.
General Electric, which follows BP Plc and Halliburton in reducing its presence in Iran, announced record earnings of $5.4 billion for the fourth quarter 2004 (up 18% over the fourth quarter of 2003).
New York City Comptroller William C. Thompson Jr. expressed his satisfaction with GE’s announcement. “I’m glad to learn that General Electric has agreed to sever any future ties with Iran,” said Mr. Thompson, who is investment adviser to New York City’s pension funds. “It appears that General Electric is agreeing with what we have maintained all along; that doing business with nations that support terrorism is bad for the bottom line and goes against everything this nation stands for.”
As of December 2004, the five New York pension funds were holding about 33.2 million shares of General Electric, worth approximately $1.1 billion.
