GE Could Break Up As Stocks Continue To Plummet

FAIRFIELD, CT — Sometimes the grass isn’t always greener on the other side of the fence. At least that seems to be the case for General Electric just about two years after announcing its decision to bolt its Fairfield-based headquarters for Boston. After calling Fairfield home for 42 years, GE was lured to Massachusetts with about $150 million in tax breaks and incentives in early 2016. Ever since then, it's been bad news for the multinational conglomerate, which has seen a shared drop of about 42 percent over the past year.

GE could soon look a lot different. The company’s stocks plummeted Tuesday after CEO John Flannery said the newly Boston-based company is taking a fresh look its structure, which could involve major GE divisions becoming separately traded units.

Flannery revealed serious issues with GE Capital's insurance portfolio. Specifics aside, it means the company faces a $6.2 billion after-tax charge in the fourth quarter — a hit Flannery called "deeply disappointing."

Meanwhile, GE Capital, the company's finance division, will suspend its dividend to the parent company for now. The fourth-quarter charge will be addressed through GE Capital reserve contributions of $15 billion over seven years. (You can read more about the nitty gritty of GE's predicament at The Wall Street Journal.)

"It's especially frustrating to have this type of development when we've been making progress on many of our key objectives," he said in a conference call with investors, according to the Associated Press.

See also:

• Boston Bound: GE Makes Its Decision
• Malloy: GE's Move to Boston 'Hurts'
• GE CEO Jeff Immelt Sells New Canaan Mansion
• General Electric CFO 'Hated' Fairfield Headquarters: Report

Flannery envisions a slimmer GE focusing on energy, aviation, and health care divisions. Other divisions spinning out on their own, it's argued, would be more manageable.

GE said in November that 2018 would be a "reset" year after announcing its quarterly dividend was being cut from 24 cents to 12 starting in December. You can read GE's full turnaround plan here.

With reporting by Mike Carraggi, Patch National Staff

Materials from The Associated Press and State House News Service were used in this report