The industrial conglomerate will focus on aviation, power and healthcare, and it's also cutting its dividened in half. Fred Katayama reports.
GE is radically shrinking. The sprawling industrial conglomerate that makes everything from locomotives to light bulbs will focus on just three businesses - aviation, power and healthcare. The move is a sharp turnaround from General Electric's historical strategy of managing a slew of big businesses. Refocusing the company will likely result in a $20 billion sale of assets. GE didn't say which businesses it'll dump. But analysts think it could exit businesses such as transportation, lighting and oil and gas. Reuters correspondent Alwyn Scott covered GE's meeting featuring CEO John Flannery. SOUNDBITE: ALWYN SCOTT, CORRESPONDENT, REUTERS, (ENGLISH) SAYING: "Flannery was pretty downbeat about the earnings outlook for the next couple of years. It's going to take two years to turn around the power divison which has been the main source of trouble and was cited by Flannery as the main cause of the dividend cut because of its poor performance over the last couple of years." GE is under pressure to revive its stock. Its 35 percent drop this year makes it the worst performing Dow component. Its shares slid further Monday after the company said it'll chop its dividend in half to 12 cents and slashed its profit forecast for next year. The dividend cut - the third in its long history - is expected to save $4 billion in cash a year at a time when its cash flow is deteriorating.