Stock of fabled US conglomerate General Electric opened strongly in the NYSE as the company announced that it will split into three units, GE Aviation, GE Healthcare and GE Energy, which will encompass GE Renewable Energy, GE Power and GE Digital.
These units together are parts of one unit, GE Industrial, which had debt liabilities of $14.7 billion as of 3Q21. In that quarter Aviation had revenues of $5.4 billion, Healthcare $4.3 billion, Renewable Energy $4.2 billion and Power $4.0 billion. In the pre-Covid conditions of 2019 Aviation had $33 billion in revenues, Healthcare $20 billion, Power $19 billion and Renewable Energy $15 billion.
The company founded by Thomas Edison had a spectacular fall from grace the last thirteen years after being heavily hit by the 2008 financial crisis and an ill-fated $9.5 billion acquisition of the power business of French transportation conglomerate Alstom. GE was dropped from the Dow Jones Industrial Average in June 2018.
During the COVID pandemic the company’s aviation unit, which makes engines for Boeing and Airbus, was also heavily hit laying off 10% of its US workforce in March 2020.
Nonetheless recent news seems to indicate that the company is turning itself around with stocks rising in the second half of 2021, spurred on by the purchase in September of ultrasound equipment maker BK Medical for its healthcare division, causing a 5% share hike.
The company’s press release did not state what would happen top GE Capital, the company’s financial arm, which had $8.7 billion dollars in revenues in 2019 and holds the larger part of the conglomerate’s debt with $46.1 billion of long-term debt maturities as of 3Q21.