MIAMI – General Electric (GE) announced today it is splitting itself into three different public companies, concentrating on its main business, GE Aviation.
GE announced plans on November 9 saying that the company will spin off its health care business in 2023 and its energies business in 2024. Those will become separate companies.
GE Aviation will still have a 19.9% stake in the new health care company, keeping its assets and liabilities.
GE is famous in aviation as it is one of the three main jet engines builders along with Rolls-Royce and Pratt & Whitney. The company’s aviation arm, which also supplies systems and avionics, is mostly based in the Cincinnati region, as 9,000 of its employees are based there. However, it is not sure whether the new company’s headquarters will be in Boston or in Cincinnati. The company has not made any comments on the matter yet.
GE chairman and CEO Lawrence Gulp Jr. stated in a company statement that “The world demands – and deserves – we bring our best to solve the biggest challenges in flight, healthcare, and energy”. According to him, those three “industry-leading, global public companies” can “benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors and employees.”
The Future GE Aviation
Mr. Culp will keep leading GE as CEO and chairman. Additionally, he will be a non-executive chairman of the health care branch. On his part, Mr. John Slattery will continue as CEO of GE Aviation until 2024. However, it is not immediately clear what his position will be once the two remaining companies are split, as Mr. Culp is to lead GE Aviation.
GE Aviation, as well as the whole aviation market, was hit hard by the COVID pandemic. The company announced in 2020 that it would go through a 25% reduction of its workforce, which counted 52,000 employees before the crisis.
Moreover, the company apparently expects that difficulties will continue in 2022, as reported by the Wall Street Journal. According to the news outlet, GE aviation is Cincinnati’s third-largest employer, with 8,900 local employees.
Featured image: The mighty GE9X mounted on Boeing 777-9x. Photo: GE