Changes at the top as GE works to revamp business
BOSTON — General Electric ousted its CEO, took a US$23-billion charge and said it would fall short of profit forecasts this year, further signs that the centuryold industrial conglomerate is struggling to turn around its vastly shrunken business.
H. Lawrence Culp Jr. will take over immediately as chair and CEO from John Flannery, who had been on the job for just over a year. Flannery began a restructuring of GE in August 2017, when he replaced Jeffrey Immelt, whose efforts to create a highertech version of GE proved unsuccessful.
In Flannery’s short time, GE’s value has dipped below $100 billion and shares are down more than 35 per cent this year, following a 45 per cent decline in 2017.
The company was booted from the Dow Jones industrial average this summer and last month shares tumbled to a nine-year low after revealing a flaw in its marquee gas turbines, which forced the shutdown of a pair of power plants where they were in use.
GE warned Monday that it will miss its profit forecasts this year and it’s taking a $23-billion charge related to its power business.
Culp was CEO and president of Danaher Corp. from 2000 to 2014. During that time, Danaher’s market capitalization and revenues grew fivefold. He’s already a member of GE’s board.
It’s a track record GE appears to need after a series of notable changes under Flannery failed to gain momentum, although some analysts wonder whether Culp’s history of accomplishments will be enough to reverse the direction of the company.
Investors will want Culp to “clean house, and fast,” said Scott Davis, founding partner of Melius Research, in a research note where he compared GE’s recent history to a slow but fatal train wreck.