stock has doubled since last summer. Investors waiting more than a decade for a turnaround might wonder if this is just a Covid-19 reopening bounce. But there are signs of deeper change afoot.
In 2018, GE’s troubled power division burned through more than $2 billion in cash. That year, the company appointed former Danaher star Larry Culp as CEO, and he promptly took a massive write-down of accounting “goodwill”—a sign that GE was ready to face structural problems that had been put off for years. It has since cut costs and debt, and sold or exited biopharma, lighting, aircraft-leasing, and coal-fired power businesses. Settlements with regulators have lifted overhang from past subprime-mortgage and power-accounting practices. The power business is producing rather than consuming cash.
The changes helped GE weather a pandemic downturn in its otherwise healthy aviation business. The company’s other core units, renewable energy and healthcare, enjoy fast growth and steady returns, respectively. Culp, 58, says he noticed improved worker morale on a recent six-week tour of operations. “People see the momentum that they have generated,” he says.
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