The conglomerate General Electric, founded by incandescent lamp inventor Thomas Edison, was once an icon of the American economy. Now it is being split up.
The US industrial group General Electric (GE), once the largest company in the world, wants to split into three independent companies. As the company announced on Tuesday, one of the successor companies will be exclusively responsible for the healthcare sector from spring 2023. In 2024, two more companies are to be created for the power plant, energy and digital business on the one hand, and the aviation business on the other. Customers, employees and shareholders would benefit from the break-up into three large global companies, each leading in their respective industries, it said. The aim of the operation is also to further reduce the once immense debt burden. Thanks to higher profit margins, the liabilities have already been reduced by a total of around 75 billion dollars in the past three years.
The decision marks the end of an odyssey for GE that lasted more than a decade. The company that Thomas Alva Edison, the inventor of the incandescent lamp, founded in 1890 was in severe turmoil in the wake of the economic and financial crisis in 2008. Numerous changes in strategy followed, dozens of business areas were sold, including the once important financing business. As a manufacturer of medical devices such as computer tomographs and turbines for power and aircraft engines, General Electric is an important competitor of the Munich-based Siemens group. Last year he had also outsourced the energy business to a new, independent company.
Even after its numerous skins, GE still has 174,000 employees with annual sales of around 80 billion dollars. In Germany alone, 11,000 people work for the company at 50 locations. The group had risen to become an icon of the US economy under its CEO Jack Welch, but was most recently on the list of the top-selling companies in the country, far behind at 34th. The problems began under Welch, even if he was of supporters long after his Retirement in 2001 was celebrated as a legend.
At least on the stock exchange, the current split-up plans met with spontaneous enthusiasm: The price of GE shares initially shot up by 15 percent, but profits later crumbled again significantly.