RETHINKING - November 10, 2021 - Industrial Empire breaks in parts

The last announcement of General Electric came these days, the industrial empire of other times is splitting in three new independent companies: aviation, healthcare, and energy.

After two decades of decline, GE never found a new balance for growing again. During that period, the industrial corporation sold a series of business units, to pay its debts.

About GE's decline, the Wall Street Journal wrote: “The Boston-based conglomerate founded by Thomas Edison has in recent years shed its locomotive, consumer appliances, lighting, oil and gas and aircraft-leasing businesses to pay off tens of billions of dollars of debt. Much of its problems stem from its legacy GE Capital division whose bad financial bets nearly sunk the company during the financial crisis.”

Now, GE made a crucial decision, to split into three companies. 

These were the words of the Larry Cup, CEO of GE, making the announcement: "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."

According to previous experiences, the split of business giants is difficult and frequently, they never return to the old glory times. Remember the cases of Motorola, Hewlett-Packard, and others.

We must observe the next steps of Mr. Larry Cup and his team and how they start the split process.

 

SOURCES: The Wall Street Journal, my own think tank.