General Electric was once one of the top jewels in the American industrial sector, known at its peak as the "universal enterprise". From aircraft engines to household light bulbs, it was the company's production scope.
However, as time passed, this massive enterprise group had to face restructuring after years of stagnation and sluggish performance. On Tuesday, the plan to split the company into three independent companies and go public officially came to an end, with the aviation, energy, and healthcare companies all listed for trading, marking the end of the era of the former giant General Electric.
The spin off of General Electric means that this large corporate group has reached its peak in cutting expenses and also marks a shift in the corporate structure that has dominated American business for decades.
Three parts of the world
General Electric announced in November 2021 that it plans to spin off into three companies, focusing on three different areas. The company had already abandoned its well-known equipment manufacturing business, and as early as 2020, General Electric stopped selling its representative light bulb products.
In a letter to shareholders in February this year, CEO Larry Culp reviewed General Electric's history and emphasized that the establishment of General Electric was largely due to the enthusiastic and sincere efforts of its employees. The completion of the company's spin off is not the end, but a beginning.
The aviation business led by Culp will essentially inherit most of General Electric's legacy, continuing to produce jet and turboprop engines, while retaining the stock code "GE".
General Electric Aerospace has installed approximately 44000 commercial aircraft engines and approximately 26000 military and defense aircraft engines worldwide, with adjusted revenue of approximately $32 billion last year. It is expected that the company's operating profit will reach approximately $10 billion by 2028.
The energy sector is known as GE Vernova, which includes renewable energy companies, power companies, digital companies, and energy financial services companies. GE Vernova has installed over 7000 gas turbines and approximately 55000 wind turbines, with its products reportedly producing approximately 30% of the world's electricity. The company officially conducted transactions on Tuesday under the name of GE Vernova, with the code "GEV".
The healthcare company is called GE Healthcare, providing diagnostic scanners, imaging patents, and software services. The company started listing on NASDAQ in January 2023, with the stock code "GEHC".
So far, the stock price of the medical business that was first spun off has remained strong. Since its listing, GE Healthcare's stock price has risen by nearly 50%, while its parent company GE's stock price has risen by nearly 170%.
The market is paying attention to whether the spin off of GE Vernova will continue to help General Electric regain market confidence, or will it fall into an awkward state of being ignored.