The General Electric Company
GE's Tuesday press release outlines the company's future, which will be split off in early 2023, starting with divesting its healthcare assets. The process will complete in 2024, with the subsequent splitting of the company's consolidated renewable energy, power, and digital businesses. The remaining aviation division will become the core of the new GE, which the company claims "[shape] the future of flight."
"At GE, we have always taken immense pride in our purpose of building a world that works. The world demands-and deserves-we bring our best to solve the biggest challenges in flight, healthcare, and energy," said GE Chairman and CEO Larry Culp. "By creating three industry-leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees. We are putting our technology expertise, leadership, and global reach to work to better serve our customers."
The slow slimming of the titanic conglomerate reflects the steep changes that have irrevocably altered the corporate world over the last few decades. The size and reach of GE, while at one point affording it immensely lucrative profit margins under CEO Jack Welch, has only become a liability. Increasing competition, the drag of the financial crisis on GE capital, and questionable decisions by leadership compounded to not only cut into the company's profit margins but exacerbate its debt accumulation.
When Larry Culp became CEO in 2018, downsizing efforts became a primary focus of the company. The years-long process has so far seen the divestiture of everything from NBC Universal to its historic lightbulb division.
GE's investors seem to be excited by Culp's downsizing, with trading getting off to a rather enthusiastic start on Tuesday. After a modest 3.5% gain on Monday, GE shares shot up 5.3% in a pre-market spike. Enthusiasm cooled into the day, with shares sliding 1.4% by noon.
