Financial markets are pondering the likelihood that longtime industry icon GE could be broken up into separate pieces as the firm's CEO looks to cope with a massive charge for a legacy insurance business it disposed of years ago.
In comments on January 16, GE CEO John Flannery told investors that he is looking at "many, many different permutations" for the company that could include "separately traded assets really in any one of our units," according to an article by Bloomberg.
Flannery previously said that GE plans to focus on core markets of aviation, power generation, and healthcare, while other units could be disposed of. But the new comments raise the likelihood that no part of the company's business could be off-limits.
The new concerns are being driven by the disclosure that GE plans to take a $6.2 billion charge related to liabilities from an old portfolio of long-term care insurance that it sold off from 2004 to 2006, and pay additional liabilities in the years to come. The news comes on top of struggles that GE has already been experiencing in some markets, such as the oil and gas industry.
The disclosures were worse than even the "worst-case scenario" that analysts had been expecting, according to the Bloomberg article.
