General Electric boss exit and $23bn hit stun Wall Street
Oct 02 2018
In a press release announcing the move, GE also said it would be taking a $23 billion non-cash charge for its power business and will miss profit expectations for 2018. GE will need to take a goodwill impairment charge of almost all the $23 billion in its goodwill balance, according to the company.
"Investors will view the change favorably given Culp's successful CEO tenure at Danaher, his GE "outsider" status, and the fact that Culp doesn't "need" the position, having already completed a lucrative & reputable career".
John Flannery is being replaced as head of General Electric after a little more than a year on the job.
Larry Culp, a GE board member who ran USA manufacturer Danaher for more than a decade, is to replace GE veteran John Flannery, effective immediately. GE bosses have typically enjoyed long-term tenures spanning more than a decade.
Stock prices have decreased by more than half since Flannery took the top job in August of 2017, and with the news of his departure, GE's shares rose 15 percent before the opening bell on Monday.
Flannery will be replaced by H. Lawrence Culp, who had the unanimous support of the board, the company said.
The company's power business, hit by problems with its latest generation of gas turbines, posted a $10 billion loss a year ago.
Culp is known as a specialist in turning companies around.
The company has also appointed former American Airlines chief executive Thomas Horton as lead director on its board.
Mr Flannery had been in the role for less than two years. The company has been forced to sell off divisions and lay off employees, a process that accelerated under Flannery.
Flannery vowed to give GE more of a high-tech and industrial focus by zeroing in on aviation, power and renewable energy - businesses with big growth potential.
Culp, 55, ran Danaher from 2000 to 2014 in what investors and analysts view as one of the best turnarounds among multi-business industrial companies. "We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency", Culp said. Culp said in a statement, "We have a lot of work ahead of us to unlock the value of GE".