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New York (AFP) – Once-dominant industrial giant General Electric announced Tuesday it will shed its healthcare and oil field services businesses to concentrate on power, aviation and wind turbines in the latest attempt to shore up the struggling company.

John Flannery, GE’s chief executive, hailed the new corporate plan as a rebirth for the longsuffering company, which he said would slash debts and stabilize its balance sheet as a leaner, more focused enterprise.

“We will run GE in a fundamentally different way going forward,” he said on a call with Wall Street analysts and reporters.

“Our businesses will be the center of gravity and will run on a new operating system that we believe will improve our operations and cash performance.”

Within two to three years, the company will spin-off the oil field services giant Baker Hughes, in which it holds a 62.5 percent stake, but will “immediately” begin the 12-to-18-month process of separating from its health care segment, Flannery said.

The Baker Hughes spinoff comes less than a year after GE acquired its controlling stake in the company for $32 billion.

By 2020, this will reduce company debts by $25 billion, or two and a half times earnings, while slashing corporate costs by $500 million, according to Flannery.

Flannery said the resulting company would be a “new GE, a high-tech, industrial GE, a simpler, stronger and more focused company.”

– No longer a Dow member –

Tuesday also marked the company’s first day off the benchmark Dow Jones Industrial Average, which capped a year-long slide of more than 50 percent in GE’s share price — hit by weaknesses in its power and oil and gas businesses.

Shares in the company were up more than seven percent in early morning trading on Wall Street.

Flannery became CEO last summer, replacing Jeffrey Immelt, as the company worked to right the ship. 

Since then, GE has trimmed costs, streamlined its board, cut its dividend and revamped employee compensation. The company has also announced plans to sell $20 billion in industrial assets. 

The company announced in April it had set aside $1.5 billion in reserves for possible settlement with the Justice Department stemming from the subprime activities at GE Capital — which the company said Tuesday would also slash assets by $25 billion.

GE expects to generate cash from 20 percent of the value of GE Healthcare, while returning the remaining 80 percent to shareholders in a tax-free distribution.

In the power segment, where Flannery said results had been “unacceptable,” the company still expects to have a “fundamentally strong franchise,” in part by continuing to service its existing base of installed turbines and power generation facilities.

The company claims to generate about a third of the world’s electricity.

“This is a turnaround story and we are confident in our ability to improve the future operating performance,” Flannery said.

The health care arm, which provides medical imaging and other services, had $19 billion in revenue in 2017.

Last month, the company announced it would merge its transportation arm with railroad manufacturer Wabtec in an $11 billion deal.

GE on Monday had already announced the sale of its industrial gas engine business to Advent International for $3.25 billion.

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