Larry Culp Was Smart to Keep GE in the Health-Care Business

Does it make sense for one company to sell medical imaging machines and jet engines? On the face of it, no. But keeping General Electric Co.’s health-care business in the fold is one of the smartest things Chief Executive Officer Larry Culp has done.

Some background: In 2018, with GE shares in free fall, investors were desperate for a shake-up that could help the heavily indebted industrial giant raise cash and unwind its complexity. Then-CEO John Flannery proposed in June of that year to distribute the bulk of the health-care business to shareholders and shift $18 billion of liabilities onto the standalone entity. A few months later he was out of a job. Culp succeeded him and ultimately yanked the plan to make health care independent. He instead struck a deal to sell GE’s biopharmaceutical unit to his former company, Danaher Corp., for $21.4 billion.