GE’s Im­melt to step down af­ter 16 years as CEO

Los Angeles Times - - BUSINESS BEAT - As­so­ci­ated press

Gen­eral Elec­tric Co.’s Jeff Im­melt is step­ping down af­ter 16 years as chief ex­ec­u­tive of the giant con­glom­er­ate, hav­ing suc­ceeded in re­po­si­tion­ing the com­pany as a pro­ducer of large in­dus­trial prod­ucts but failed to fully re­vive its lag­ging stock price.

John Flan­nery, pres­i­dent and CEO of GE’s health­care unit, will take over as CEO in Au­gust, the com­pany said Mon­day.

Im­melt took the helm in 2001 from leg­endary CEO Jack Welch. Af­ter the fi­nan­cial cri­sis, he sharply pared down the fi­nan­cial ser­vices busi­ness that Welch had built up and went on a spend­ing spree to ac­quire busi­nesses in the power and oil and gas sec­tors. Dur­ing his ten­ure, Im­melt also dis­posed of GE’s ap­pli­ance unit and the NBC tele­vi­sion busi­ness.

The 61-year-old Im­melt will stay on as chair­man un­til his re­tire­ment from the po­si­tion at the end of the year, with the 55-year-old Flan­nery step­ping into the role af­ter that.

GE traces its roots to 1878, when in­ven­tor Thomas Edi­son formed Edi­son Elec­tric Light Co. in New York City af­ter hav­ing opened his fa­mous lab­o­ra­tory in Menlo Park, N.J. The next year, Edi­son in­vented the first suc­cess­ful in­can­des­cent elec­tric lamp.

Re­cent re­ports say GE is con­sid­er­ing sell­ing the light­ing busi­ness, which could fetch about $500 mil­lion.

Al­though GE cred­its Im­melt with im­prov­ing its fi­nan­cial per­for­mance and its fo­cus, GE’s stock price has lagged be­hind the mar­ket dur­ing his time as CEO.

The stock was worth a bit less than $40 on Im­melt’s first day in 2001, with the U.S. in the mid­dle of a re­ces­sion. The stock briefly rose above $40 in 2007, just ahead of the eco­nomic cri­sis. It sank to as low as $6.66 in March 2009 in the depth of the cri­sis, and closed at $27.94 a share Fri­day.

An­a­lyst Robert McCarthy at Stifel Ni­co­laus wrote in a note to clients that the tim­ing of the lead­er­ship change was “un­sur­pris­ing since the se­rial un­der­per­for­mance of the stock.” GE said the moves were part of its suc­ces­sion plan. GE’s stock rose 3.6% to $28.94 on Mon­day. Flan­nery is a long­time Gen­eral Elec­tric ex­ec­u­tive, start­ing his ca­reer at GE Cap­i­tal in 1987.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.