mr. flannery said today on cnbc that they want to maintai the dividend. given what you know and you follow this company so closely, that may be his best of intentions, but a lot of our viewers bought the stock for the dividends. do you think it's safe? >> the answer is yes, but you have to -- have to understand when you spin off health care, health care will i have own dividend policy and t'alth care is a growth year asset so likely to have a payout ratio. they should be growing cash flow so the odds of maintaining most of that dividend is pretty high. bel o r,peld be a couple of suld nnbe bieut i don't think it's g to be material. thank you as always. >>> morganur of , just a orment ago mentioned ge's exit nmha d t afrhe century as part of the blue chip index it's being replaced by walgreens fell 1% in the dow debu t today.> ften wall street overall stocks bounced back after yesterday's steep selloff. tech stocks rebounded but confusion over trade policy capped some of the gains. the dow jones industrial average was 30 points to 24,283. the nasdaq added

mr. flannery runs it into the future today, we got that answer.ealth care is the name in the portfolio that is going to be pushed out it's going to be a modernization of roughly 20%, and 80% is spun or split off to shareholders and the health care business will be its own entity it takes with it about $18 billion in debt, pension liabilities, a business with a $19 billion revenue run rate, earnings per share, if you call them that, not earnings per share yet, but earnings that are double digits, low double digits, so it might be -- well, let's call it value to somewhere between 14 to 15 times, giving it, they hope, an overall value of $60 billion to $70 billion for perspective for people the $18 billion in debt, too, remember this was the big announcement today, but not the only one. there's a plan, as well, to exit the 62% of baker hughes, a ge company that ge currently owns that will also take place over the next two and a half to three years, the company said, and, perhaps, as importantly, they are doing things to the balance sheet to instill m

company investors are still waiting to hear the details of a major overhaul restructuring promised by mr flannery above and beyond the previously announced sell off the c.e.o. who has spent thirty years with the company insists all options to restore profitability are on the table as we reported here it will be delisted from the thirty stocks that comprise the dow jones industrial average today is officially the last day in that club. the u.s. house of representatives has passed legislate. to scale back nutrition assistance to less fortunate americans as part of a massive new farm bill the legislation is a long way to go it has not yet been considered by the us senate all that may occur in the coming days but the passage in the house is particularly significant in that it was not a bipartisan bill with both republicans and democrats supporting it that usually takes place the reason stems from the controversial provision related to changes in what is called the supplemental nutrition assistance program or snap or some people know it as food stamps which currently assist roughly forty million lower

mr. flannery said it publicly. i'm sure he'll reiterate it when he joins us.t's the key is turning around power and selling what they own of baker hughes over time it's the public markets having a more focussed company around aviation, power, and renewables with the hope, of course, you can start to have the significantly increase the focus, the simplicity, that's kind behalf they're going to try to get investors to be focussed on. >> as for the premarket move here, 6% hand had a 5% day since 2015 i think you go back to 2011 to see if 5.5% move you could be looking at a substantial move here. as for the dividend, others are looking at whaothers pay honey well 2 nowhere near the current that is going to reflect their peers. >> it will and if you're a current shareholder, you're going to get shares of the new health care company to be lead by karen murphy and you could argue that the dividend there plus whatever the dividend will be on ge will be commence rate to what is now let's take a listen to flannery a few moments ago talking about this move this morning.

company investors are still waiting to hear the details of a major overhaul restructuring promised by mr flannery above and beyond the previously announced sell off the c.e.o. who has spent thirty years with the company insists all options to restore profitability are on the table as we reported here g.e. will be delisted from the thirty stocks that comprise the dow jones industrial average today is officially the last day in that club. the u.s. house of representatives has passed legislation to scale back nutrition assistance to less fortunate americans as part of a massive new farm bill the legislation has a long way to go it has not yet been considered by the u.s. senate all that may occur in the coming days. the passage in the house is particularly significant in that it was not a bipartisan bill with both republicans and democrats supporting it usually takes place the reason stems from the controversial provision related to changes in what is called the supplemental nutrition assistance program or snap or some people know it as food stamps which currently assist roughly forty million lower i

mr. flannery discussed that and said it's going to take time to get them to execute appropriately. far short what had been internal and external goals for the company. it's been a brutal year for ge, as we know and as i talked about last week, we're waiting for what is expected to be before the end of the quarter the more significant announcement from the company in terms of its future. we'll leave it at that, at this point. in terms of see what the details are, if we get any in terms of the future and the various divisions, but it has been brutal run every time. it seems to get a little bit of momentum, the something happened the most recent being dropped from the dow it's more of a psychological blow. >> it's the trade issue. they get affected. talk about a global supply chain. a company for ge according to the journal from the initial tariffs that have been listed around the world, 3/4 of the initial list of products are facing u.s. tariffs. they have to source parts. they profile an mri machine and how many different components from around the world go into something like that

mr. flannery has laid out, typically it causes tremendous exit.hen on top of that, you ha the dow exit. there is nobody left to sell the stock. it is time to buy. >> so you basically think stocks washed ut, management is essentially trying to rationalize the business what are the pitfalls? because i can imagine it looked line of scrimmage t like the stock was getting washed out >> just do a simpg cle calculatn amount of shares in the come to jesus moment and then look at all the analyst reports. jpmorgan analysts had this right. sure there is some down side, but the risk/reward, maybe have 10%, 20% down side, but the up side potentially 200% the next five years or so >> and if we get another dividends cut, how do you expect investors to respond especially in the rising rate environment >> it is almost like the trump stock. i think investors are somewhat numb to the bad news over and over again and so many analysts have projected it so what is priced in once you have had the dividend cut in the fall and recent cuts, a lot of negativity has been pri

mr. flannery as i walked off about that. the dividend overall is going to be lower than it is currently. that is, when you become a shareholder of the new health care company and old, so to speak, ge. but we don't know what the differential is going to necessarily be the dividend for health care is going to be priced appropriately to its peer group, and then ge will do the same will that be a lesser number yes. will you have a new security in the health care company that eivably will be a faster grower that's certainly what they hope as well. so i think they answered this on the call we did want to ask him specifically because i didn't do it during the interview itself. >> and on those comments, as somebody who is invested in ge stock in the past, how are you thinking about the dividend and how does that play into your thesis going forward >> we have it about a nickel or so on a pro forma basis if you will i don't think it's a huge change you know, look, if health care n grow faster and have a different investor base that's

mr. flannery said, but the big question is what is the earnings power? that's the question all of us had on the desk. right now, people think it's going to earn a dollar a share that's been questioned from the st now as you're splitting it up and you have questions of what's allocated to what section, what it means is it's going to take a few quarters for the clarity to really come into the income statement as far as what is the normalized earning power i like what flannery is doing and i give him a thumbs up, but it takes more time before -- >> i 100% agree with jim it's taking up a level, restructuring takes time 18 months sometimes. and you have a business whose power business continues to deteriorate. if i was to look at the industrial sector, which we're neutral on, it's had a tough time lately. we view it as a trade off the bottom, more of a trade versus an investment story. >> i think that's right. in terms of it being a trade, you want to be in the stock, i would think. >> i'm thinking some of the more high quality names not going through the sam

mr. flannery's -- it's his problem now and the group that made a lot of decisions very reac and not proactive. >> not just the debt also the pension liabilities, too. and how are they going to fund that going forward and still be able to carry forth the dividend i don't think any of us are surprised by this. i don't think it makes us want to buy the stock when it happens -- >> it's a big deal. >> big deal. >> incredible history of the company. >> biggest stock, right? it was the biggest valued stock for years in the entire market. >> in fact, bush administratiibo fade but not much. >> also the g-finance. >> i have to interrupt you here now is president trump. >> a lot of you going with us and interesting. we're meeting right now on immigration. and we are very strong at the border, very strong on security. we want securityfor our country. the republicans want security and insist on security f our country. and we will have that at the same time we have compassion we want to keep families together it's very important. i'll be signing something in a little while that's going to do that and the p

mr. flannery about it. but were they understated for years? tated is the question. >> thank you john flannery is joining david on "squawk on the street" later this morning you don't want to miss that. and clearing the fog on london a judge rules later this morning on uber. we'll get a live update after the break. "squawk box" will be right back. - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mos

mr. flannery to speak to all of those shareholders who have spoken to me every time you may go to 30 rock, people in our own building right here for many years and have suffered the pain of watching it fall from the mid-30s to as low as 12. what do you say to them? >> i share in every sense the pain if you will my life-savings is in in the stock so i have the same connection issue we are going through a tough patch and we are dealing with the issue and we have a plan and we know where we are and we are realistic and know where we go with the portfolio and balance sheets and how we run the company and know how to get there and stay tuned for the ride here. >> hang in there is kind of what he indicated any shareholders hung in there with an 8.5% movin is not particularly pleased >> you got to move double to make 50% it is his intent over a period of time to have these businesses in the right place in terms of being able to execute and have a growth company it is his believes if you will he believes they're not going to face any significant liabilities that are not known >> on the dividend b

mr. flannery is working at faster speed. going to be the tone for the next years, everybody is going to do things faster? richard: a lot of things are speeding up. the cap x we are seeing in the u.s. is also accompanied by how .ension funds can be optimized think boards are looking at m&a. that is caused people to look closely at what their business model can be. francine: how are you adapting and adjusting your business model to that? not talk aboutd state street's business model but in terms of our investment strategy, that needs to be adapted. we have looked at how r&d affects future performance and found that of normal expenditure on r&d is a driver of future returns. those are the factors that we found interesting. that perhaps we would not have considered five or 10 years ago. you look iten economic forecasts or economic models, what do you think is lacking. is there something economists are getting wrong? populations have been affected adversely by things on the face of it that are good for the global economy. that ha