General Electric Co.’s new boss said he’s weighing potentially dramatic changes including a breakup into separate businesses, after the iconic manufacturer said it would take a major charge related to a legacy insurance operation.
“We are looking aggressively at the best structure or structures for our portfolio to maximize the potential of our businesses,” Chief Executive Officer John Flannery said Tuesday on a conference call with analysts. A review “could result in many, many different permutations, including separately traded assets really in any one of our units, if that’s what made sense.”
Flannery renewed the discussion of a potential breakup after disclosing a $6.2 billion charge related to an old portfolio of long-term care insurance, another setback for a company already struggling with flagging demand in some key markets. The CEO, who took over for Jeffrey Immelt in August, is cutting costs and selling assets after GE posted last year’s biggest drop on the Dow Jones Industrial Average.
While Flannery vowed last year to consider all options for GE, he emphasized a plan in November to focus the company on jet engines, power-generation equipment and health-care machines. He also said the company would sell $20 billion in other assets, taking the spotlight off the possibility of a more ambitious restructuring.
Flannery said Tuesday he would continue to review the company’s strategic options and update investors in the spring.
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