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7 Billionaires and Their Cars That Will Surprise You

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Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour. https://www.ft.com/content/983d2b62-db95-11e8-9f04-38d397e6661c General Electric cuts dividend to 1 cent after $22bn writedown US conglomerate to restructure power division after failing again to reverse fortunes Larry Culp took over at GE at the start of October © FT montage / REX Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Share Save Save to myFT Ed Crooks in New York AN HOUR AGO Print this page11 General Electric has cut its dividend for the second time in less than a year and unveiled a radical restructuring of its troubled power equipment division, disappointing investors who had pinned their hopes on the industrial group’s new chief executive. GE shares dropped more than 9 per cent by afternoon trading on Tuesday after the quarterly dividend was slashed from 12 cents per share to just 1 cent, allowing the company to save almost $4bn a year while its finances are under severe strain.  The US conglomerate said the Department of Justice had launched an investigation into issues including a $22bn non-cash writedown for goodwill at its power division, mostly relating to the 2015 acquisition of Alstom’s energy unit. The Securities and Exchange Commission, which is already investigating the group over its accounting treatment of long-term contracts and provisions for insurance liabilities, had also widened its probe to include the charge. The third-quarter earnings are the first to be reported under new chief executive Larry Culp, who took over this month following the abrupt exit of John Flannery after one year in the job. Breaking up the power division is Mr Culp’s first strategic move. The new chief will split the unit into two — one housing GE’s traditional business of gas turbines and the other with the remaining assets, including steam turbines and grid equipment. Mr Culp will also overhaul the power division’s management structures so the heads of the business units report directly to him. The existing structure, he told the Financial Times in one of his first interviews since becoming CEO, “had a lot of layers between me and the business”. Taking out those layers, he added, meant the business could run with more transparency and more accountability. Earnings per share for the quarter, excluding the writedown and other one-off items, were 14 cents, well below analysts’ average forecast of 20 cents and 33 per cent lower against the previous year. The results show the difficulties at the power equipment division, which has been hit by the rise of renewable energy and slowing demand in developed countries. The business suffered an adverse swing of more than $1bn, slumping into a loss of $631m for the quarter compared with a profit of $464m for the equivalent period of 2017. Orders were down 18 per cent at $6.6bn for the quarter. Recommended Inside Business Jonathan Ford Lessons from GE’s monster writedown “GE has considerable strengths,” Mr Culp told analysts on a call. “The talent here is real, the technology is special, and the global reach of the GE brand and our relationships are truly impressive — but GE needs to change.” Analysts generally welcomed the decision to cut the dividend. Jim Corridore of CFRA described the move as “brave and necessary and a sign that Mr Culp will not take half measures to improve the company”. However John Inch, an analyst at Gordon Haskett, described the results as “disappointing” and said the dividend cut suggested “GE faces a significant cash constraint”, putting time pressure on Mr Culp’s in-depth review of operations. The company has sold most of GE Capital, the financial services operations that frequently generated about half of GE profits before the 2008 financial crisis. The remaining operations made a residual profit of $59m, but the parent company will no longer receive a large cash dividend from GE Capital.  Combined with a jump in payments into the pension fund to $5.1bn for the quarter, GE swung from a net cash inflow of $4.1bn in the first nine months of 2017 to a net cash outflow of the same amount for the first three quarters of this year. GE’s other divisions reported mixed results, although there was a strong performance from the business that makes aero engines and other aircraft parts, where profits were up 25 per cent from $1.3bn to $1.7bn. Martin Sankey, an analyst at Neuberger Berman, said the sense that GE was spiralling out of control could force Mr Culp to rethink his strategy. “There is a plan, and Larry Culp is a very bright guy. But he has only been in the role for 30 days,” Mr Sankey said. “The spiralling has taken on a life of its own, and that may force some revisions in the plan . . . Some more radical action than he has already contemplated.” However, Mr Inch also raised concerns over the future of GE’s aircraft components business, writing in a note: “A key question is how long aviation strength can last at what appears close to a cycle peak.”

Oftentimes, billionaires and the filthy rich focus on how luxurious and comfortable their transit to the workplace and other destinations is. And sometimes it becomes a statement of one’s success level and public image to the outside world. Billionaires and their cars can be inseparable.

But that’s not the case with every billionaire. Some of them continue to drive cars that don’t reflect their true status and cost way below their means.

They use their car for travelling from point A to B without much fuss or trying to impress others. Check out this list of seven well-known billionaires and the cars that don’t reflect their true status.

1. Jeff Bezos

The world’s richest person and CEO of e-commerce giant, Amazon with a net worth of around $128 billion, prefers to move around in a very simple and old car. He drives a 1996 Honda Accord model, which in today’s date would have cost around $4,000.

2. Steve Ballmer

Former CEO of Microsoft with a net worth of around $40 billion, Ballmer is a hardcore loyalist of Ford vehicles, the company in which his father worked. He drives a Ford Fusion Hybrid priced around $25,000 for his daily commute.

He got his car during his stint with Microsoft from Ford CEO Alan Mullaly to celebrate the production of the millionth car based on SYNC, Microsoft’s infotainment system.

3. Jack Ma

The self-made billionaire and founder of Chinese internet giant, Alibaba also rides in his fairly priced mid-size SUV Roewe RX5 from SAIC, priced around $25,000.

The car was jointly developed by Alibaba and SAIC and termed as Internet car which refers to the Internet of Things. Alibaba was responsible for developing the car’s operating system and infotainment system.

4. Mark Zuckerberg

Founder and CEO of Facebook and the sixth richest person leads a frugal life and avoids spending much on his clothes, cars, and travelling. His personal collection of cars include a black Acura TSX, Volkswagon GTI, and a Honda Fit, all under the price tag of $30,000.

5. Warren Buffet

The CEO of Berkshire Hathway and a successful investor, with a total net worth of $80 billion rides in his 2014 Cadillac XTS model priced at $55,000. He purchased this car after General Motors CEO, Mary Barra, convinced him to upgrade from his Cadillac DTS, which he had purchased in 2006.

He auctioned his previous car for a charity, in which he fetched $122,500 to support Girls Incorporation. Warren Buffet has pledged a majority of his fortune to charity in last 10 years, his total contribution to charitable organizations stands at $27.5 billion.

6. Jim Walton

The youngest son of Walmart founder, Sam Walton, and Chairman of Arvest Bank, Jim Walton has a total net worth of $47.1 billion. The combined wealth of Walmart heirs is more than that of Bill Gates and Warren Buffet.

Despite all his wealth, he chooses to lead a pretty modest life. One of his favourite rides includes a Dodge Dakota, a mid-size pickup truck priced around $8,845 (the base model).

Source: Wikipedia

7. Michael Bloomberg

CEO of Bloomberg, the company he co-founded in 1971, Michael Bloomberg has a net worth of $45 billion. He retains almost an 88% stake in his company and is a major philanthropist who has donated around $5 billion to various social causes. His car of daily commute is Chevloret Suburban, which costs around $40,000.

These humble billionaires truly show how focused they are on creating value for their stakeholders rather than splurging wealth on maintaining own luxurious lifestyles–well, vehicles at least.

Featured image from Shutterstock.

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