AP
General Electric reorganizes into 4 major units
Friday July 25, 6:41 pm ET
By Stephen Singer, AP Business Writer
General Electric reorganizes into 4 major units instead of 6[size=2]


HARTFORD, Conn. (AP) -- General Electric Co., which owns businesses ranging from light bulbs to NBC television, on Friday said it will restructure into four businesses from six, a move that Chief Executive Officer Jeff Immelt says will focus the company on growth.

Immelt has been under pressure to shake up GE since it shocked investors with disappointing first-quarter earnings. GE's share price has since dropped nearly 22 percent.

Friday's move follows GE's recent plan to consider spinning off its iconic lighting and appliance businesses, a brand familiar to Americans for generations.

The new structure includes GE Technology Infrastructure, led by Vice Chairman John Rice, which includes Healthcare, Aviation, Transportation and Enterprise Solutions.

GE Energy Infrastructure, headed up by John Krenicki, includes Energy, Oil & Gas and Water.

GE Capital, led by Vice Chairman Mike Neal, brings together all the financial service businesses, including Commercial Finance, GE Money, industry verticals and Corporate Treasury.

NBC Universal, headed by Jeff Zucker, will remain unchanged.

In the reorganization, GE's Commercial Finance, GE Money, GE Industrial and GE Healthcare were folded into new, expanded business segments.

Analyst Nicholas Heymann of Sterne Agee in New York said in an e-mail that GE made the right move, and that the new structure suggested GE would be focusing increasingly on infrastructure and, to a lesser extent, on commericial finance.

The expected sale of GE Money at a favorable price "should further underscore GE's narrowing focus of its businesses," Heymann said. Immelt has said GE will consider selling portions of GE Money, which provides banking and credit services.

GE, which is based in Fairfield, has been getting rid of other units that have failed to drive profitability. It announced in May it would sell or spin off its appliance business, but this month said it would spin off the entire unit that includes household appliances such as dishwashers and clothes dryers and lighting, motors and electrical distribution.

Last year, GE shed its underperforming plastics business by selling it to a Saudi Arabian company for $11.6 billion.

Analyst Matt Collins of Edward Jones in St. Louis said investors will benefit from the reorganization if it helps GE officials focus on key markets and provides more transparency.

In particular, he said organizing GE's array of financial services into one unit makes it a "little easier to figure out where the financial earnings are coming from," he said. "That's overdue."

The reorganization is GE's second announcement in a week. On Tuesday, GE said it had formed a joint venture with an Abu Dhabi government investment company that will pump $4 billion of outside capital into its weakened commercial finance business. The deal with Mubadala Development Co. also will launch or broaden several other ventures with the Persian Gulf investment vehicle, which expects to become one of the top 10 institutional investors in GE.

Immelt also announced that GE's board has named Krenicki, 46, a 24-year GE veteran, as a vice chairman of GE.