New CEO at General Electric John Flannery will unveil a plan for the conglomerate that will be focused on three of its largest business units, but does comes up short of any radical restructuring of the company that is 125 years old.
Flannery, who since taking over as the company’s top executive on August 1, has conducted a strategic review of the company and is expected to place the company’s focus on its power, aviation and healthcare divisions, said a person who is familiar with this matter. Flannery plans to see how the company can exit the majority of the other operations it has.
GE will pull back from transportation, one of the biggest and oldest makers of diesel locomotives, along with GE Lighting, which goes back to Thomas Edison and currently makes energy management sensors and LED bulbs.
While the three units previously mentioned will be GE’s core, Flannery will stress during his Monday meeting with analysts and investors, that he will evaluate regularly the business portfolio of GE as part of how he leads the giant.
Based in Boston, GE is also planning to shed at some point most of its interest in Baker Hughes, which is now a separate entity after it merged with the oil and gas operations of GE in July, said the person familiar with the situation.
GE has a stake of 63% in Baker Hughes, which as of Friday’s close of business was valued at $40 billion. While it is intending to exercise an option to exit BH, the process has not started and would be the topic of much discussion between the boards of both companies.
In the current arrangement, General Electric cannot sell its share for several years.
Flannery will streamline the corporate functions of GE, said the person familiar with the plan. The company has close to 24,000 people in digital, research and its headquarters.
More research will be moved to the specific business units while the development of software will be only for its core industries.
It is not clear the number of jobs that will be affected by these new plans of the CEO and Flannery is not expected to make any announcement Monday of a target. GE had approximately 295,000 employees as of the end of last year.
The Monday meeting will be a broad map and outline of the continuing process. However, it will not detail each component of the pledge by Flannery to sell over $20 billion the conglomerate’s assets.