As GE breaks up, future of CT employees uncertain
A GE spokesperson told Hearst Connecticut Media on Wednesday that it was too early to say what the impact will be on the Norwalk office or others.
With Connecticut’s lost conglomerate now breaking up into three smaller companies, General Electric has not yet said how the moves will impact the company’s remaining finance and tax staff in Norwalk who drove the company’s profits in its heyday.
At stake are hundreds of Connecticut jobs — GE won’t say how many — mostly in various financing businesses that remained after the company sold off massive chunks of GE Capital between the 2008 recession and 2017.
Now an already shrunken GE is spinning off its health care and energy businesses to focus on aviation. All three companies will their shares traded publicly under the plan announced this week.
GE Healthcare will be the first of the final two spinouts, with the company setting a target of early 2023 for the transaction, and early 2024 for the energy business.
A GE spokesperson told Hearst Connecticut Media on Wednesday that it was too early to say what the impact will be on the Norwalk office or others. The spokesperson did not respond to a request for an updated employee count in Connecticut.
GE Capital entered this
year with about 2,000 employees across four units under CEO Jennifer VanBelle, who is also treasurer of GE.
“The company is still working through a lot of details with each business, but is not anticipating a change at this time,” Jaclyn Cochrane, communications leader for GE Energy Financial Services, said in an email to Hearst Connecticut Media. “Boston will remain an important hub.”
CEO Larry Culp Jr. will lead the aviation company anchored by jet engine manufacturer GE Aviation based in Evendale, Ohio, a rival of East Hartford-based Pratt & Whitney. The energy business
— which traces its heritage to Thomas Edison — will be led by Scott Strazik, CEO of GE Power, which has its headquarters in Atlanta.
The company has yet to announce the final landing place for the General Electric name itself and its legendary blue logo that looms large in U.S. corporate history.
“I think as we’ve seen in so many instances outside of GE over the last decade, spinning good businesses heightens focus and accountability,” Culp said Tuesday during a conference call. “Up and down the chain — from the board to the team and including investors — that alignment that you get with
pure-plays is really helpful. So you put all that together, on top of what we have been able to achieve, I think we feel strongly this is the right decision. This is the right time.”
The decision cements the dismantling of the conglomerate once based in Fairfield that former CEO Jeffrey Immelt inherited from Jack Welch in September 2001. Immelt sold off once-prized divisions like NBCUniversal in New York City and GE Plastics based in Pittsfield, Mass., in addition to billions of dollars in GE Capital businesses.
In 2016, Immelt moved GE’s headquarters from
Fairfield to Boston, citing the city’s innovation vibe, only for GE to replace Immelt the following year as its stock continued to lag behind other blue chip companies. Culp took the corner office in 2018, having previously led the industrial systems manufacturer Danaher.
In 2000, GE Capital was the company’s crown jewel, generating just over half of General Electric revenue. Two decades later, GE Capital contributes less than 10 percent of the parent company’s total revenue.
The 2008 crisis prompted GE to negotiate a $3 billion infusion from Berkshire Hathaway to meet immediate cash needs. The U.S. government included GE Capital among lenders classified as “too big to fail” and subject to far stricter regulatory scrutiny.
In addition to the prestige GE lent Connecticut via its former corporate headquarters off the Merritt Parkway, the company was a dominant Connecticut employer on the strength of GE Capital. Culp has continued carving off pieces of GE Capital, with the company projecting $75 billion in debt reduction this year.
Culp referenced GE Capital directly only once in the Tuesday conference call, noting the aviation business will shoulder the remnants of an insurance division that sold long-term care policies on which GE continues to pay out claims.
“I think we’re doing a better job not only managing that portfolio but also, frankly, running the business in terms of finding opportunities to raise premium; as well as, frankly, managing claims smarter,” Culp said Tuesday. “We’ll continue down that path. If things change, we’ll deal with that in time, but this is an obligation that we’ve run well — again, a runoff obligation.”
In addition to the existing GE Capital office in Norwalk, GE has hundreds of employees in the Hartford area that it picked up in its 2015 acquisition of Alstom’s power grid product lines.
Separately that year, GE spun off Synchrony Financial as an independent retail finance company, which remains based in Stamford.