Emerson expects spinoffs to reduce costs, drive growth

Emerson CEO David Farr says tax code changes would bring business back stateside|Photo courtesy of wikicommons
David Farr|Courtesy of wikicommons

Emerson’s plan to spin off its network power business and explore “strategic alternatives” for other businesses will shrink the Ferguson-based company’s sales by about a third, to $16.3 billion from $24.5 billion.

But Emerson executives say the move will make the company smaller and more focused, helping Emerson return to the sort of growth and margins investors have come to expect. With the spinoffs, the company is re-evaluating its global corporate structure, searching for ways to cut costs.

“We have created a corporate structure around the world, not just here in St. Louis … where we support a larger company,” Emerson CEO David Farr said. “And a company that’s going to be $16 billion, you need to reassess every corporate action that we do for the operations.”

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