This is a partial transcript from Your World with Neil Cavuto, January 17, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews. 

NEIL CAVUTO, HOST: Market analysts say it certainly pay to diversify. That strategy definitely paying off for one General Electric. GE's earnings up nearly 10 percent. In the latest quarter, 39 cents a share, right in line with estimates. Strength in GE capital offsetting weakness in the company's jet engine business on the heels of the September 11 attacks and a drop in revenues at NBC.

Still, things appear to be back on track. While revenues remain down from a year ago, there are signs of a strong recovery in the final months of 2001. Let's get to the bottom of it all with the man at the top: GE's chairman and CEO Jeffrey Immelt. He joins us now from the company's headquarters in Fairfield, Connecticut. Jeff, good to have you. Happy new year.

JEFFREY IMMELT, CHAIRMAN & CEO, GENERAL ELECTRIC: Great to be here, Neil. Good to talk to you again.

CAVUTO: These really always defy the general view that everything stinks for corporate America. How are you pulling that off?

IMMELT: You know, again, I talked to you out back in September, right after 9/11, and I talked about the GE business model. And I think it just works. You know, we have a great set of diversified number one businesses. We have business initiatives like digitization and Six Sigma to help us win in every environment. And we have just great financial discipline to allow us to do acquisitions and continue to grow in down cycles.

You add all that up together with a great leadership team and this is very typical of the performance that our investors have grown to like.

CAVUTO: How do you get the Wall Street community, though, to start buying that, though? You're well off your highs here. There's a concern here that you just can't keep this pace up. How do you answer that?

IMMELT: You know, Neil, it's just about performance. As we continue to perform time after time after time, the stock always tracks performance. If you go back over 25 years in every economic cycle, GE has outperformed the S&P 500, has outperformed the GDP. And that's why people own this stock. It's based on performance. So I think, Neil, if you look, all the leadership team here can do is continue to perform and investors are going to buy the stock. And that's what we're all convinced about.

CAVUTO: Do you think that, in a perverse sense, the frustration with Enron has helped companies like yours, that there might be sort of a move to safe and tried and true names whose businesses, even though yours are fairly diverse, you can understand versus one. In Enron's case, you couldn't.

IMMELT: Well, I mean, the one thing I know is that we're nothing like Enron. I mean, we're in businesses we've been in — some as many as 100 years. We give people great visibility. We have more that 225 investor and analyst meetings every year. We've got a great culture. All the people in the company are paid with one currency, which is the GE stock.

So I think in many ways, GE is a company that stands for trust. And it's been around a long time, and if that's what investors like, that's this company. We give people accountability, performance, diversity and visibility. And that's a pretty good combination, we think.

CAVUTO: All right, I apologize. The Kmart exposure, any there?

IMMELT: Very small. With GE capital, very small. We sell light bulbs and things like that, but we have very little exposure to Kmart.

CAVUTO: OK. Let's talk a little bit about NBC. That was a weak link in the armor, not surprising given the advertising down draft. How long do you expect that to be the case?

IMMELT: You know, Neil, we saw some positives signs towards the end of the year. The scatter market was up and some encouraging momentum as we left the year. It was a tough 2001 in its entirety with NBC. But the fourth quarter actually had some encouraging signs. I feel great about our position with the Olympics. That's almost sold out. And so, I think we've got some good momentum with NBC as we face 2002.

CAVUTO: Speaking of NBC, the reports were that you were very involved in keeping Katie Couric on board — quite actively involved. Is that true?

IMMELT: Well, now that she makes almost as much as you do, then...

CAVUTO: Yeah, wouldn't that be nice.

IMMELT: ...to keep our talent. But look, you know, I was supportive of what the team did, but the team did the negotiation. I think Katie is a great talent. The Today show is a very profitable enterprise.

CAVUTO: So you feel she was worth the figures that we're hearing, the $16 million or so? That's about right?

IMMELT: You know, I think what you read is pretty close.

CAVUTO: OK.

IMMELT: And I think she's worth it. I think she's worth it.

CAVUTO: Do you worry, though, that as a guy who runs also a big entertainment powerhouse, that you've raised the bar here and that's it's going to cost you dearly down the road?

IMMELT: Neil, we had two decisions to make, really, the same week. We had a decision to resign Katie Couric, which we did, and we passed on the NBA because we thought it was too expensive for the business we were in. So you have to make those choices. I make them as a business person. My emotions aren't tied up with it.

The Today show is very profitable. We have a great team. Not just Katie, but Matt and the rest of the team, and it's worth it. So we make our decisions one-on-one.

CAVUTO: OK. I read that a factor was Jeffrey Immelt is getting so involved in making sure Katie Couric stays at NBC, then he's not getting rid of NBC. Is that right?

IMMELT: Well, look, I like NBC. I think it's profitable. Our return on total capital there is very good. I think we play in a big market that has growth opportunities. So I am very comfortable with where we are in NBC, and I'm about growth and this company is about growth. And NBC is a franchise that we think we can grow with. Since the last time I saw you, I was at Telemundo...

CAVUTO: But, but if it doesn't continue to grow, would you consider like, all right, this ain't working?

IMMELT: Sure. Like every other business in GE, if it doesn't perform, if the dimensions of NBC change, I'll think about it in a different way. But when I look at it today, it's got great margin rates, it's got great return on total capital. We play in a big industry. I've got a great leadership team in place, and I just like the dimensions of NBC as we sit here today.

CAVUTO: All right. Could I be a little inside baseball here. Now you have apparently a financial channel, right? It's CNB — something like that.

IMMELT: Something like that, yes.

CAVUTO: Something like that. Now are you as involved, as Jack Welch later recounted in his book, in that operation and sprucing it up and getting its ratings back. I don't wish you well there, but I mean, what are you doing as far as getting involved in CNBC?

IMMELT: Look, I love business. I love learning about all our businesses. And like Jack had an interest in medical systems and aircraft engines and NBC, I planned to have equal amounts of interest in all those businesses. I don't spend any more time in NBC than I do the medical business or the aircraft engines business. I love business. I love getting involved and getting to know the people across GE. So that's where I plan to be.

CAVUTO: All right. Jeffrey Immelt, always a pleasure. Thank you very much.

IMMELT: Neil, it was great talking to you.

CAVUTO: Same here, sir. The chairman and CEO of General Electric, Jeffrey Immelt.

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