General Electric Co. is breaking up GE Energy into three units, while saying the division has a strong outlook for the second half.
John Krenicki, who has led GE Energy since 2005 and who became a GE vice chairman in 2007, is leaving the company at the end of this year.
“We discussed him taking other roles inside the company,” said GE CEO Jeff Immelt in a July conference call. “I think his sense is that it is a good time to think about other things that he can do. John and I have worked together for 25 years. I think this is just one of those natural evolutions in GE that we do as time goes on to better match up with the markets.”
Krenicki is one of two University of Connecticut graduates among GE”™s senior-most executives, along with corporate treasurer Kathryn Cassidy.
Three separate energy units will now report directly to Immelt:
Ӣ GE Power and Water, based in Schenectady, N.Y. and led by Steve Bolze, with 41,000 employees and expected revenue totaling $28 billion this year;
Ӣ GE Oil and Gas in Florence, Italy, led by Dan Heintzelman, with 33,000 employees and $15 billion in expected sales this year; and
Ӣ GE Energy Management, led by Dan Janki in Atlanta, with 27,000 workers and $7 billion in revenue.
GE expects the reorganization to save it between $200 million and $300 million annually, without saying how many layoffs could result.
“Actions like this are always done carefully at GE,” Immelt said. “John and I have been working on this for some time.”
GE Energy outperformed its corporate parent in the second quarter, increasing profits 13 percent to nearly $1.8 billion and revenue 15 percent to $11.9 billion.
“We have got some big orders in places like Brazil and Canada and Australia, Turkey, places like that,” Immelt said. “We have navigated the cycle as well as anybody. I think we probably make as much money as the rest of the industry combined or something like that. And we have a pretty good window on the future.”
The only unit to eclipse GE Energy had its own momentous quarter: GE Transportation, which will move its headquarters from its longtime base in Erie, Pa., to Chicago.
As a whole, GE increased profits 7 percent from a year earlier to $4 billion, while revenue gained just 2 percent to $36.5 billion. The company announced orders totaling $17 billion at this month”™s Farnborough International Airshow in the United Kingdom for GE Aviation and other affiliates.
Norwalk-based GE Capital improved earnings 31 percent to $2.1 billion, but that was driven by GE Real Estate”™s return to profitability, with earnings totaling $212 million after a miserable second quarter in 2011 when the unit lost $335 million. GE is on track to shrink the size of GE Capital with unspecified impacts on its Fairfield County workforce numbering more than 2,000 people, even as it resumes dividends.
Comments 1