Talks of a G-E Breakup Resurface
CBJ — The prospect of having General Electric broken up into separate smaller companies has once again been tabled after it was announced the company lost more than $11 billion from charges associated with its long-term care insurance portfolio and new, stricter tax laws.
CEO John Flannery has floated the idea of a breakup on previous occasions as he and his team look to cut more than $3.5 billion in costs to offset a loss in revenue and cash flow. It will surely mean more job losses moving forward.
It hasn’t been any easy ride for Flannery since taking over as CEO last summer when he inherited numerous problems.
Although Flannery is considering the idea of a breakup, it’s by no means a certainty at this point and would seem to be executed only as a last option.
Meanwhile finance arm GE Capital will take a hit of more than $6 billion in the fourth quarter from a reevaluation of its insurance assets.