The Atlanta Journal-Constitution
GE to split into 3 public companies
General Electric, the storied American manufacturer that struggled under its own weight after growing to become a sprawling conglomerate, will divide itself into three public companies focused on aviation, health care and energy.
It is the culmination of an arduous, yearslong reshaping of a symbol of American manufacturing might that could signal the end of conglomerates as a whole.
“It’s over now,” said Nick Heymann of William Blair, who has followed GE for years. “In a digital economy, there’s no real room for it.”
The company has already rid itself of the products most Americans know, including its appliances last year and the light bulbs that GE had been making since the late 19th century when the company was founded.
The announcement Tuesday marks the apogee of those efforts, divvying up an empire created in the 1980s under Jack Welch, one of America’s first CEO “superstars.”
GE’S stock became one of the most sought after on Wall Street under Welch, routinely outperforming peers and the broader market. Through the 1990s, it returned 1,120.6% on investments. GE’S revenue grew nearly fivefold during Welch’s tenure, and the company’s value increased 30-fold.
Yet the stock began to lag in the summer of 2001, the waning days of Welch’s rule, and near ruin for GE struck toward the close of the decade with the arrival of the worst financial crisis since the Great Depression. General Electric’s vulnerabilities were laid bare and the epicenter was GE Capital, the company’s financial wing.