General Electric Faces Industry Changes

   

General Electrics is one of the well-known names in the power industry, but is facing competition from other big names in the industry, leaving them to adapt for economic survival. The CEO John Flannery reveals the upcoming changes with GE during an investor conference this week.

GE is no longer an industrials member of the Dow Jones to be replaced by Walgreens Boots Alliance. General Electric will be pulled from the index starting June 26 and after the announcement GE stock slipped 1.5 percent in extended trade. The announcement gave a boost of 2.2 percent for Walgreens stock.

The share price for GE has shown under performance in the broader market under the leadership of former CEO, Jeffrey Immelt, who was replaced last year by the current CEO John Flannery. Under the new leadership of Flannery GE is selling off assets and dividing assets for sale.

The health division of General Electric accounted for $19.11 billion in revenue from 2017, representing more than 15 percent of the company’s annual sales. They just announced that they will be spinning off their health care business (x-ray machine and equipment) and separate their oil services company, focusing on other divisions. GE will be focusing more on their aviation division and developing renewable energy units.

GE also announced these new developments after agreeing to sell their distributed power unit for $3.25 billion by the U.S. buy-out group Advent. Flannery says that power profits will be flat this year after falling 53 percent in 2017, making sales for new plants tough. He goes onto say that this transition will take time but they will be developing new uses for their technology for clean energy options.

GE felt influenced to move towards more renewable energy options after the announcement from competition in the energy industry including Vistra Energy Corp and Dominion Energy Inc. These two companies combined provide electricity for 5.5 million people and claim they will no longer be building combined-cycle natural gas-fired power plants. The companies will also be investing in solar energy technology, giving a push to GE for exploring sustainable energy solutions.

For more about the changes with General Electric, check out the videos above.

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6 years ago