Recovering from Jeffrey Immelt’s tenure as CEO of the firm is going to be tedious and protracted for General Electric. But CEO John Flannery appears up to the task.
Through selling off some of its units – such as its health care unit, railroad locomotive unit, its distributed power business which makes Jenbacher and Waukesha gas engines, and, upcoming, its stake in Baker Hughes – the company is aiming for a 2.5 ratio of debt to earnings before interest, tax depreciation and amortization by 2020, down from 3.5 today. At the same time, the company is contributing $3 billion to its finance unit. And has no plans for selling its two biggest remaining units that make jet engines and power turbines. This sounds more like the real GE. Let’s hope that Flannery’s plans work well – it would be nice to see GE rejoin the Dow Jones Industrial Average.