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In an interview with The Wall Street Journal, General Electric Co. Chief Executive John Flannery talked about the thinking behind his strategy to turn around the struggling conglomerate. Edited excerpts:
WSJ: You're separating health care. Why are you keeping power? And why not let investors choose -- or is that something that you would consider in the future?
Mr. Flannery: This is the plan. We're finished. This is the way we're going to go forward, to answer your question directly.
The second thing is this, this is a dramatic change in the company. It's a dramatic change in the portfolio, it is a dramatic change in the way we run the company. So this is not an insignificant change.
The third thing is, we really looked at what is the best way for the businesses to flourish. We didn't start with any preconceptions of we should keep things together or we should not keep things together, as I said from the outset. Everything's on the table, with no preconceptions and no sacred cows.
If you look at health care, Baker Hughes and transportation, we concluded they could grow fastest and create the most shareholder value for our owners outside of the GE complex.
WSJ: What's the logic behind the pieces that stay inside GE?
Mr. Flannery: Unlike health care and Baker Hughes, there is significant shared technology . . . . We get technology for GE fan blades for aircraft engines that we put into the renewable business, so there's a lot of technology sharing back and forth, and we feel they can innovate and share investment in ways other parts of the company couldn't.
WSJ: After your 11-month review, do you feel like you've turned over every stone?
Mr. Flannery: Yes, we have gone to the four corners of the company, looked at everything. I'm highly confident we've got our arms around everything. We're taking steps, you know where we have seen issues along the way, we've stepped into them, we faced them.
WSJ: How about the more recent news of being removed from the Dow Jones Industrial Average? Does it mean GE has changed, or is it the Dow that has changed?