GE to split $50-bn energy biz into three separate units
New York: In a major restructuring move aimed at saving costs, GE will separate its energy business into three separate units.
The American conglomerate, which has good presence in India, Friday said the re-organisation of energy business would come into effect from the fourth quarter of 2012.
The three businesses would be GE Power and Water, GE Oil and Gas and GE Energy Management.
"The Energy headquarters organisational layer will be phased out by the end of 2012. This change will speed decision making, reduce layers and decrease cost," GE said in a statement Friday.
GE Energy Infrastructure, projected to have USD 50 billion revenues this year, has around 1,00,000 employees.
According to the statement, GE Power and Water -- headed by Senior Vice President and Power and Water CEO Steve Bolze -- would be headquartered in the US. This segment would have around 41,000 employees and expected revenues of USD 28 billion this year.
Headquartered in Italy, GE Oil and Gas would be led by Senior Vice President and Oil and Gas CEO Dan Heintzelman. The business would have about 33,000 people and revenues are projected to be USD 15 billion in 2012.
GE Energy Management, with headquarters in the US, would be headed by Senior Vice President and Energy Management CEO Dan Janki. This segment, which would have about 27,000 employees, is anticipated to have revenues of USD 7 billion in 2012.
GE Vice Chairman and GE Energy Infrastructure CEO John Krenicki would oversee the transition to the new energy business structure. According to the statement, Krenicki would leave the company at the end of 2012.
"Big companies are always fighting organisational complexity. We are taking action at a time when the Energy business is doing well," GE Chairman and CEO Jeff Immelt said.
"The business had a solid quarter with earnings up 13 percent and has a big backlog of great products. Removing layers is one way to reduce costs and increase our speed, focus and agility in the marketplace so we serve customers better," he said.
Meanwhile, GE's net earnings in the latest June quarter slumped nearly 16 percent to USD 3.11 billion. In the year-ago period, the same stood at USD 3.69 billion.