Jeff Immelt recently stated that America, and GE, must return to Manufacturing roots. He wants to rebalance GE's portfolio by becoming more "industrial", looking perhaps for Wall Street to value GE stock as an industrial conglomerate, instead of as a financial group.

What comes next? How will this impact GE involvement in the Automation business? Here's my analysis:

The recent GE & Fanuc joint-venture split was clearly NOT an isolated decision. It followed the re-organization of the PLC and software businesses into separate commercial units, which was not supported by several key people, notably John Pritchard who spent some 30 years at GE Automation in Europe and is now exiting - the first of many.

GE Intelligent Platforms (GE's Automation arm) reports to Charlene Begley, CEO of Enterprise Solutions, a mix of energy and industrial businesses. Charlene is forceful, personable, impatient and likely to survive. She ran GE Automation before moving to Transportation and then on to Plastics, which she sold to the Saudi's (SABIC) in May 2007. She was responsible for acquiring Intellution, which many insiders feel was one of the smartest moves GE's Automation business ever made. Charlene's pedigree as a GE portfolio manager looks good.

My guess is that GE will create a new industrial division. Where GE will place its Automation business is not yet known; but there will be winners and losers.

Will Charlene emerge as a winner running this new unit? Will GE keep Automation, or sell it off? Will it try to create a larger Automation unit by putting together its Automation business with its Energy unit?

All these questions will take a few months of deliberation and strategy sessions - probably till the turn of the year. After that, GE will move very quickly, probably emerging as a buyer (or seller) of Automation assets in early 2010.

Who else will emerge as potential buyers and sellers? Here's a refresher from the GE Viewpoint:

For sale:

• Rockwell - whether they like it or not.
• Invensys - whether they like it or not. Their pension plan was under funded, and was a poison-pill for potential buyers.
• Honeywell - the Process Systems Division is likely to be divested by a hungry-for-growth-and-glory CEO Dave Cote.

• ABB - Joe Hogan (ex-GE) would find GE's Automation business too small. He is more likely to be focused on Rockwell. ABB has the cash, and Joe Hogan needs to make a move. A bigger ABB would create a global alternative to Siemens.
• Siemens, the largest industrial company, has never been able to make a successful acquisition. They'll be in the bidding.
• Schneider - one of the winners during this decade. They could want GE's software business to add to Citect. They may also be in the market for DCS player. Invensys would be a good fit and make Schneider a world player in software and Process Control.