As GE splits, Larry Culp has no regrets

By coincidence, I was reading Ted Mann and Larry Gryta’s excellent book Lights Out when news about GE broke this week. It’s a stunning reminder of how quickly business fortunes can change. At the turn of the century, GE was the most valuable company in the U.S., and Fortune had declared CEO Jack Welch the “Manager of the Century.” Today the company is being broken into pieces. Big pieces, to be sure—each of the three public companies should end up comfortably in the Fortune 200. But still, a shadow of what GE was.

I talked briefly with CEO Larry Culp yesterday. Culp came in as an outsider and has done much to reduce the company’s debt and boost its profitability. He had indicated earlier in his tenure that he had no desire to break the storied company up. But yesterday, he had no regrets:

“We are of the view that investors win, employees win, and customers win. These businesses will be more focused, have a greater level of accountability, sharper and better capital allocation, and more flexibility.”

Okay, that makes sense. But then, was there ever a good reason for wildly different businesses to be joined together in the first place? Or does the end of the world’s greatest conglomerate signal that something significant has changed in the business environment? Culp, who is as tightly disciplined in his messaging as he is in his managing, responded:

“I have spent very little time the last three years looking back over GE history. Since the fall of 2018, it has really been about today and tomorrow for me.”

He did acknowledge, though, one thing that had changed since Welch’s time—the aspirations of employees:

“Increasingly, recruitment and retention is about more than the corporate whole. It’s about position and purpose…There was a point in time when people said, ‘I want to work for GE.’ Today, people are more focused on addressing climate, or being in health care, or in aviation. I think going forward, what we do in recruiting and retention will be a function of what we are doing from a P&L situation.”

More news below. And read why Mary Barra believes GM can catch Tesla here.

Alan Murray
@alansmurray
alan.murray@fortune.com

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This edition of CEO Daily was edited by David Meyer.