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Amid continued market challenges , General Electric (GE) has announced plans to jettison its Transportation business as well as sell off its Industrial Solutions and Lighting divisions within the next two years to enable it concentrate on the pursuance of a more focused strategy, according to the International Rail Journal.
International Rail Journal reports that the CEO of GE, John Flannery, made the announcement at an investor conference call, saying GE will focus more on its power, aviation and healthcare divisions. The report stressed that the announcement is already having a negative impact on the company with many investors selling their shares thus reducing the value of the company by 8% , falling to a five-year low , with GE’s stock fallen by 40% this year and now with a market value of $168bn.
According to the report, the new strategy may result in the closure of many of GE’s plants around the world as Flannery is said to be cutting the number of seats on its board from 18 to 12.
Meanwhile, GE has also unfolded plans to cut its overhead costs by $2bn in 2018, with half coming from its troubled power unit.
“Today (November 13), GE announced that it will divest the Transportation business from its portfolio,” International Rail Journal said, quoting an official announcement by GE. “The Company is in the early stages of this process and exploring a multitude of possibilities that may include, among several options, creative approaches used to transition GE’s Consumer Finance business into Synchrony Financial or models like the Baker Hughes and GE Oil & Gas merger.
“This move is in line with GE’s broader efforts to divest $US 20bn in assets over the next few years. The Transportation business remains committed to building on its strong culture of innovation, deep domain, world-class technology and digital solutions in a way that best positions the business for growth.”
