GE has ousted John Flannery as chief executive officer and chairman barely a year after he took the job, making a switch as the company has lost more than $100 billion in market cap value and financial writedowns.
Flannery, who took the position heading up GE in August 2017 and worked to restructure the diverse company, was replaced with a member of the company’s board, according to reports. H. Lawrence Culp Jr. was named as the new CEO and chairman.
GE shares and market cap have fallen over the past 10 years, but the recent declines pushed the company out of the Dow Jones Industrial 30, a place GE held for most of the past century. The Boston-based conglomerate also took financial hits on various pieces of the business.
Many critics have called GE unwieldly, due to its engagement in not only power generation but also aviation, insurance, credit and, with the recent acquisition of Baker Hughes, oil and gas drilling services. The share price rebounded to $12.55 (or about 15% higher) after Culp’s ascension was announced, yet it’s still far below what the company was trading for 20 years ago.
The obvious hope is that Culp, who led industrial and health care-focused Danaher Corp. through five-fold growth during his 14-year tenure ending in 2014, can perform the same type of progressive success at GE. He joined the GE board in April.
“GE remains a fundamentally strong company with great businesses and tremendous talent. It is a privilege to be asked to lead this iconic company,” Culp said in the company’s statement announcing the move. “We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency. We remain committed to strengthening the balance sheet including deleveraging. Tom (new Lead Director Thomas Horton) and I will work with our board colleagues on opportunities for continued board renewal. We have a lot of work ahead of us to unlock the value of GE. I am excited to get to work.”
GE Renewable Energy has been named as an area of strength for the company. This division focuses on onshore and offshore wind, hydro, and concentrated solar power. GE Renewable Energy has installed more than 400 GW of capacity globally. Specific to hydropower, GE says its hydro turbines and generators represent more than 25% of the total installed capacity globally.
However, earlier this month, Yves Rannou, president and CEO of hydro for GE Renewable Energy, left the company for wind turbine manufacturer Senvion S.A.
Flannery joined GE in 1987 and ascended the ranks before succeeding CEO Jeffrey Immelt in August 2017.
In June, the company announced it would spin off its healthcare business and get rid of its relatively new stake in Baker Hughes. The GE-Baker Hughes deal was completed only 14 months ago.
Flannery vowed to give GE more of a high-tech and industrial focus by honing in on aviation, power and renewable energy — businesses with big growth potential. The shift is historic for a company that defined the phrase “household name.”
(The Associated Press contributed to this story)