Jeffrey Immelt, poised for the biggest restructuring push on his watch at General Electric Co., is plotting acquisitions to complement an industrial portfolio spanning jet engines to locomotives to oilfield equipment.

With GE planning to sell the bulk of the GE Capital unit, Immelt said he will spend as much as $5 billion a year to expand the manufacturing units. GE’s chief executive officer is getting a start on building up cash for purchases and stock buybacks with a $26.5 billion plan to dispose of real estate assets.

“We’re always looking for ways to grow our industrial businesses,” Immelt said Friday in a telephone interview. “We’ve got so many investment opportunities in the businesses we’re in today -- oil and gas and healthcare and aviation.”

The decision to unload most of GE Capital breaks with Immelt’s incremental pace of dispositions to wean GE from the unit that destabilized the parent company during the 2008-09 financial crisis. Shrinking GE Capital may let it escape designation as a systemically important financial institution, and GE said it’s working with federal regulators.

“The timing was very good to be a seller of financial service assets,” said Immelt, 59, who has been CEO since 2001. “You’ve got slow growth, you’ve got low interest rates, you’ve got lots of liquidity, you’ve got search for yield. We said, ‘This is a great environment.’”

David Fuller's view

Selling off GE’s financial sector will reduce earnings revenue but this can be at least partially offset by share buybacks. 

GE is inexpensive today and its industrial portfolio should benefit as the global economic recovery continues.  This would eventually justify a higher rating for the share.