GE operations in Wilmington are expected to be part of separate entities in coming years as General Electric Co. splits into three public companies focused on aviation, health care and energy.
The move, announced Tuesday, comes after more than a decade of losses for the Boston-headquartered conglomerate. Investors have been disappointed over the years by “a combination of earnings decline, balance sheet deterioration and dividend cuts,” according to a Seeking Alpha article
in August this year.
A news release stated that GE, as part of the changes, will pursue a tax-free spin-off of GE Healthcare, creating “a pure-play company at the center of precision health in early 2023, in which GE expects to retain a stake of 19.9%."
GE will also combine GE Renewable Energy, GE Power and GE Digital into one business, with the aim of creating a tax-free spin-off of that business in early 2024.
“Following these transactions, GE will be an aviation-focused company shaping the future of flight,” according to the release. “As independently run companies, the businesses will be better positioned to deliver long-term growth and create value for customers, investors and employees.”
Asked for the announcement's impact on Wilmington, a GE Hitachi spokesperson said, "There is no anticipated impact to employees at this time."
Efforts to obtain more Wilmington-specific information from GE officials were not immediately successful Tuesday.
GE Aviation has a site in northern New Hanover County, where workers make rotating parts for the firm’s legacy engines and new commercial engines.
In May last year, officials at the local aviation operation reported having 650 employees; after layoffs
, that number had declined to 500 as of November 2020.
Adjacent to the GE aviation site in New Hanover County is GE Hitachi Nuclear Energy, 3901 Castle Hayne Road, a provider of advanced reactor technology and services, and Global Nuclear Fuel, a GE-led joint venture with Hitachi Ltd., that supplies boiling water reactor fuel and fuel-related engineering services.
Part of GE Power, GE Hitachi Nuclear Energy makes fuel and components for nuclear power plants, focusing in recent years on the market for small modular reactors.
As part of Tuesday’s announcement, officials said GE overall is expected to achieve “$75 billion of gross debt reduction from the end of 2018 through the end of 2021.”
GE Chairman and CEO Larry Culp said in the release that the firm is “focused on continuing to reduce debt, improve our operational performance, and strategically deploy capital to drive sustainable, profitable growth. We have a responsibility to move with speed to shape the future of flight, deliver precision health, and lead the energy transition. The momentum we have built puts us in a position of strength to take this exciting next step in GE’s transformation and realize the full potential of each of our businesses.”
John Slattery is expected to continue as CEO of GE Aviation, the release stated. Peter Arduini will assume the role of president and CEO of GE Healthcare effective Jan. 1, and Scott Strazik will be the CEO of the combined Renewable Energy, Power and Digital business.
According to the release, "The respective capital structures, brands, and leadership teams for each independent company will be determined and announced later."