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    These are the 3 big challenges facing GE’s chief

    General Electric Chairman and CEO John Flannery is interviewed on the floor of the New York Stock Exchange, Tuesday, Nov. 14, 2017. Flannery said the company is weighing the future of its transportation, industrial, and lighting businesses so that it can focus more intently on its most profitable divisions. (AP Photo/Richard Drew)
    Associated Press/Richard Drew
    On a conference call Tuesday, GE chief executive John Flannery said he’s open to spinning out one or more of the company’s three core business lines.

    General Electric’s new chief executive, John Flannery, is steering the company toward an uncertain future. To rejuvenate the Boston-based company’s lagging stock price — it’s down more than 40 percent in the past year — he’s telling investors that there are no sacred cows when it comes to making decisions about what to do with various part’s of GE’s vast business empire. On a conference call Tuesday, Flannery said he’s open to spinning out one or more of the company’s three core business lines — energy, health care, and aviation. The disclosure understandably revived talk that GE could be ripe to be broken up.

    Here are three of the biggest challenges Flannery faces as he moves ahead:

    Recharging Power

    GE’s largest division, Power, also has been its most troubling. During Flannery’s stem-to-stern review of the company last year, he singled out Power as the part of GE that needed the most work. The integration of the energy businesses that GE acquired from French multinational company Alstom under former CEO Jeff Immelt has taken much longer, and has been much tougher, to pull off than initially expected. The company also didn’t properly anticipate the softening demand for natural gas turbines and related equipment. GE is trimming some 12,000 jobs in this poor-performing division.

    Resisting the fire sale


    Activist investor Trian Fund Management has a seat in the boardroom after putting pressure on Immelt, and then on Flannery, to boost the company’s overall profitability and share price. But Flannery will need to resist calls to unload assets at fire-sale prices because certain divisions aren’t making their numbers. While Flannery is a savvy deal maker, some investors have tasted blood and will demand more divestitures.

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    Yes, it makes sense to exit consumer-oriented products. (Goodbye, light bulbs and appliances.) But there is value to keeping a significant cluster of industrial groups together, in part because of the “smart machine” software that GE has developed. You can make a good argument for why the company’s locomotive business should head down the track. But the decision to sell the Current energy management venture based in Boston seems strange, considering how its technology could be integrated with GE’s other energy businesses.

    Maintaining morale

    Disassembling a massive company can be a dispiriting experience, both within and without. Part of GE’s strength comes from the loyalty inspired among employees who envision long careers with the company, and from the management skills GE cultivates among its leaders. The training campus in Crotonville, N.Y., may seem like a luxury to investors, but its impact has been felt across GE’s nearly 300,000-person workforce.

    Meanwhile, in Boston, GE faces concerns that state and city incentives promised to bring the company here from Connecticut in 2016 — a total of nearly $150 million — might turn out to be a bad investment for taxpayers. GE has made its presence known in the community, as promised, and has started renovating two old brick buildings in the Fort Point neighborhood for its new headquarters. But its leadership can’t afford the ongoing PR problems of a company in trouble.

    Jon Chesto can be reached at