Splitting planned: The competitors Philips and, above all, Siemens had already taken similar paths some time ago.
(Photo: Reuters)
Boston The US industrial giant General Electric, with its 174,000 employees and sales of around 80 billion dollars, wants to split up. The Siemens rival will split into three listed companies, GE announced on Tuesday. GE Renewable Energy, GE Power and GE Digital would be spun off together as a unit, and GE Healthcare as one more. The aviation division is to be spun off as the third unit.
The aim is to reduce debts and set up the business optimally. The news was well received by investors: the share soared 15 percent before the stock market went public.
“By creating three industry-leading global public companies, each one can benefit from increased focus, tailored capitalization and strategic flexibility to create long-term growth and value for customers, investors and employees,” said CEO Lawrence Culp.
The aviation division as the main company is to be led by GE boss Culp. GE manager Scott Strazik is to lead the combined business for renewable energy, power and digital and Peter Arduini GE Healthcare.
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“Today is a pivotal moment for GE and we are ready,” said CEO Larry Culp. The company remains focused on “further reducing debt, improving our operational performance and strategically deploying capital to generate sustainable, profitable growth”
Culp was the first outsider as CEO
In October 2018, Culp became the first outsider to act as CEO and Chairman of GE to save the staggering icon. Known for his hands-on work style, Culp first made the conglomerate Danaher big before taking on the mammoth task at GE. GE was particularly in trouble under the dubious expansion under Jack Welsh and Jeffrey Immelt. Culp’s predecessor, John Flannery, had to vacate his post after a year.
Right from the start, Culp did what no one had dared before: He lowered the dividend to almost zero in order to create more financial freedom for his major cleaning. Since then, the corona pandemic has also emerged, so that the 58-year-old manager had to reorganize the already ailing group in the middle of a global crisis that is particularly hard on the aviation sector.
In his three years at the helm, Culp has already changed the company significantly: Culp has withdrawn from several areas in order to reduce the high debt: Among other things, he has left the biopharma division and his majority in the oil and gas supplier Baker Hughes separated. He has also sold off the lightbulb manufacturing process that General Electric started its business nearly 130 years ago. For the future, Culp wants to position GE more strongly in renewable energies, in health technologies and in new technologies for more energy-efficient flying. At the beginning of the month he merged the aircraft leasing division Gecas with that of the Irish competitor Aercap.
Now comes the big hit that many investors have obviously been waiting for.
With agency material
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