From CNN Money:
GE is slowly dismantling an empire.
It was once a sprawling corporation that included NBC, Universal Studios, a giant appliance company and even one of America’s biggest banks.
But now the iconic company founded by Thomas Edison is making itself smaller and smaller. And that shrinking has gained urgency in recent months as GE races to raise cash, chip away at a mountain of debt, and plug a huge hole in its pension fund.
No business is too sacred for the chopping block, especially because GE’s stock price has been cut in half over the past two years. Even businesses central to its vaunted history — the 111-year-old railroad division and Edison’s light-bulb unit — are up for grabs.
“This is a slow-motion break-up of the company,” said Robert McCarthy, an analyst at Stifel.
In the 1980s and 1990s, legendary CEO Jack Welch turned GE into the biggest and most complex conglomerate on the planet. Now the new boss, John Flannery, is trying to fix the company by doing the exact opposite.
“Our objectives are to run the businesses well, make the portfolio stronger, simpler and continue to work as hard as we can to earn back your trust and to deliver for you,” Flannery told disappointed shareholders last month.
The sell-off amounts to a rejection of the conglomerate model itself. GE wants to focus its attention on what it believes it does best: making power plants, jet engines and health care products like MRI machines.