Once the essential titan of American industry, General Electric turned heads in November when it revealed plans to break itself into three smaller companies. GE’s shares have badly underperformed in the market for years, high levels of debt still plague the company, and CEO Larry Culp has reassured Wall Street that this historic split, expected to happen in early 2023, will “drive long-term growth and value for customers, investors, and employees.”
But some observers reading between the lines worry what—or who—the casualties of this breakup will be. GE has been divesting a lot of subsidiaries (most recently, divisions focused on home appliances, plastics, and financial services), and estimates these latest spinoffs will come with $2 billion in transaction and other operational costs.
One such concerned group is the largest GE workers’ union, the IUE-CWA. In a statement today shared with Fast Company, it argues that the warning signs are already there: American-made products and American jobs will be shed, it says.
The union maintains that GE’s recent track record speaks for itself, and that breaking off parts of the company will equal factories being shuttered and jobs outsourced. It points to a decision made less than a week ago by a recently divested subsidiary—GE Lighting, which Thomas Edison helped start in the 19th century, but that now belongs to a smart-home company called Savant. On Friday, GE Lighting sent a letter informing Ohio state officials of imminent plans to close America’s last remaining plant that manufactures GE light bulbs. Over 200 workers will also be losing their jobs, it acknowledged.
In the IUE-CWA’s statement, president Carl Kennebrew fumes that these workers “have been betrayed by the company they served for generations,” then notes that consumers can also say goodbye to American-made GE light bulbs, adding: “The only American thing about these light bulbs will be the GE name on the label the company still profits from.”
IUE-CWA is asking GE to publicly “make an ironclad commitment” before the split, that these three new companies will prioritize domestic jobs and facilities, ensuring that both sides can enjoy long-term success. It says more job cuts should be expected if GE continues with its billion-dollar breakup plan instead of focusing on, and investing that money in, its domestic workforce. Kennebrew asks GE stakeholders to echo the group’s calls. “Spinoffs, buybacks, and marketing gimmicks won’t lead to long-term value and growth at GE, as executives have promised,” he says.
GE did not respond to a request for comment.
In mid-July, it revealed the names for the “three independent, laser-focused companies” (GE HealthCare, GE Aerospace, and GE Venona), but shares didn’t climb on the news. According to MarketWatch, this week GE’s stock closed more than $40 below its 52-week high—which was $116.17 on November 9, the day GE announced the split.
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