Economy

John Flannery ousted at GE after less than 2 years

John Flannery ousted at GE after less than 2 years”

Flannery will be replaced by H. Lawrence (Larry) Culp, Jr. The Dow Jones Industrial Average removed GE from the blue-chip index last June, citing the company's poor performance. Culp, 55, who was named to GE's board in February, was CEO of Danaher Corp from 2000 to 2014, helping grow an industrial company into a broader conglomerate through a series of acquisitions, while growing earnings. GE Power's current goodwill balance is approximately $23 billion and the goodwill impairment charge is likely to constitute substantially all of this balance.

GE's other bombshell was that it planned to write down effectively up to $23bn in value from its troubled power business, the prime catalyst of its nosedive in stock market valuation.

"Of course, GE is in a very different starting position than Danaher at the time with GE's Power, balance sheet and cash challenges", Winoker said.

In June GE said it would spin off its health-care business and sell its interest in Baker Hughes, a massive oil services company. "It is a privilege to be asked to lead this iconic company", Culp said in a statement. "However, we believe that CEO Culp will, at a minimum, re-baseline the company, drive execution and make long-term decisions that benefit the company and shareholders". "Tom and I will work with our board colleagues on opportunities for continued board renewal", he said. Culp said in a statement, "We have a lot of work ahead of us to unlock the value of GE". "I am excited to get to work". During his tenure he led a transformation of the company from an industrial manufacturer into a leading science and technology company.

Whispers of Culp eventually taking the helm at GE circulated nearly as soon as he joined the board in April.

That industry publication honor may provide a measure of solace as GE Power employees contemplate a newly tumultuous future.

A year into Flannery's tenure, investors were reportedly concerned he was not working fast enough to restructure the company. Of course, our partners at Trade Ideas were the first to alert us to the gains.

GE shares, which were trading around $11 - near levels last seen during the financial crisis - popped 7.1 percent on the news of Flannery's ouster, to $12.09.

Stop wasting your time!

The once mighty conglomerate, long a standard-bearer of USA industrial preeminence, is still working to right the ship following the global financial crisis of a decade ago, which blew a hole in GE's once-massive lending business. Nonetheless, we'll continue to follow the story closely and bring the news to you as it breaks!



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