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Opinion
Brooke Sutherland

GE Finally Slays the Beast That Jack Welch Built

The conglomerate’s structure was always too complicated for its own good. It will be messy, but breaking it up is the right thing to do.  

CEO Larry Culp is putting GE on a path to an identity bordering on normal.

CEO Larry Culp is putting GE on a path to an identity bordering on normal.

Photographer: John Tlumacki/The Boston Globe/Getty Images

General Electric Co. is finally ditching its conglomerate structure, ending an era of corporate sprawl that even in the best of times never made much sense and in the worst of times brought the company to the brink of destruction. 

The $120 billion industrial giant will split into three companies: The health-care division will be spun off in early 2023, followed by an amalgamation of GE’s gas and wind turbine businesses and its remaining digital assets in 2024. Those divestitures will leave the remaining company focused on jet engines. Nothing about GE is ever simple, though: The company is still funding the surprise $15 billion reserve shortfall in its legacy long-term care insurance business that it disclosed in early 2018, and those assets will remain with the aviation operations. That liability is no longer the unpredictable money suck it once was, but it does muck up the story a bit — at least until GE can figure out how to pay someone to take this headache off its hands. Even so, with three separate smaller companies, there will be much less room to hide unwelcome surprises like the insurance funding gap and the earnings statements will be inherently less messy, hopefully bringing an end to a long legacy of obfuscation. It has been a trying road, but GE at long last has a pathway to an identity bordering on normal, thanks to the deft decision-making by Chief Executive Officer Larry Culp.