Reported by the Wall Street Journal, General Electric Co., (NYSE: GE) the worst performing stock on Dow Jones Industrial Average, is now looking to sell its railroad business, which is one of the company’s oldest divisions, citing sources familiar with the matter.
The motive comes from a major plan from CEO John Flannery’s two year plan to divest more than $20 billion in assets, sources told the Journal.
The sources said that GE is either looking for a partner, spin off, or even sell the operations. The division primarily produces only diesel powered locomotives and railroad equipment.
The company has many strong divisions, Flannery said Friday on a conference call, but also “a number of other businesses which drain investment and management resources without the prospects for a substantial reward.”
Flannery has been receiving pressure from many investors since taking the CEO position to slash expenses down for the company.
GE declined to comment on the matter.
GE shares have now fallen 32.6 percent year to date. The company also announced its third quarter earnings last week on Friday, which sent shares down 8 percent. Shares fell approximately another 4 percent since its earnings release last week on Friday.
GE’s transportation division also reported an 11 percent decline in profit quarter over quarter, which could also be the reason for why the company is looking to sell its railroad division to slowly reduce operating costs.