General Electric, one of the oldest vanguards of US manufacturing, will split into three separate public companies focused on aviation, healthcare, and energy.
The company announced its planning on spinning off its healthcare business into its own company in 2023, followed by its energy business the next year. In a press release, GE said the decision will allow each of its new businesses to create more value long term and hopes the split companies will allow for greater flexibility, accountability, and more dedicated boards with “deep domain expertise.” Perhaps more importantly, the company also said the move will help it continue to reduce its debt, something that has bloated the company for years.
If all goes according to plan, three separate businesses will emerge from the breakup, with the aviation arm maintaining the GE mantle. GE Chairman and CEO H. Lawrence Culp, Jr. will continue to serve in his role until the spinoff which will then see him take on the lead role at GE’s aviation company.
GE did not immediately respond to Gizmodo’s request for comment.
GE was incorporated in 1892 in a merger between the Thomson-Houston Company and the Edison General Electric Company with a focus on electrifying the US. Since then, the company has diversified widely to create everything from aircraft engines and healthcare tech to mostly useless smart home devices. It’s also become a major supplier of US military equipment.
Like many, GE was rocked by the 2008 financial crisis and never truly received it. The company‘s stock price plummeted while its debt just kept getting bigger and bigger. The breakup then marks an escalation of major cost-cutting initiatives undergone since Culp took on the top position at GE in 2018. Since then Culp has taken an active role in selling off some of GE’s deadweight, including earlier this year, when it sold off its jet leasing business, GE Capital Aviation Services, for $24 billion in cash.
“Today marks GE’s transformation to a more focused, simpler, and stronger industrial company,” Culp said at the time.
GE’s breakup is symbolic of a larger shift in a US economy obsessed with tech. The legacy firm was the most valuable US company as recently as the late 1990s but that’s changed over the course of the past two decades, with giants Apple, Microsoft, and Alphabet all surpassing the $2 trillion valuation mark in recent years.