Immelt retiring as head of GE; John Flannery named as replacement

Ivan Schwartz
June 19, 2017

Flannery then took the reins as president and CEO of GE Equity in 2002, leading the business through a hard cycle.

"I'm going to do a fast but deliberate, methodical review of the whole company", Flannery told Reuters in an interview. And I think we've got it well on track, " Mr. Immelt said at an investor conference. "We ended up in exactly the right place", the outgoing CEO said in an interview.

Immelt said he's been planning for several years to step down around now, regardless of shareholder sentiment.

Mayor Martin J. Walsh said he's not anxious that General Electric's new CEO will change the company's plans to become an anchor of Boston's economy, even as analysts said the company has been performing poorly and is in need of either a major shake-up - or an outright breakup.

Jeff Immelt took charge of the massive industrial company shortly after the 9/11 terrorist attacks and steered the business through the upheavals of the global recession.

He also worked on the shrinking GE Capital, the initial public offering of GE's Synchrony Financial unit and the sale of GE Appliances for $3.3 billion in 2014. GE on Monday reaffirmed its 2017 outlook while omitting mention of next year's profit target of $US2 a share.

Immelt, 61, who has served in the role since 2001, will hand his chief executive position over to John Flannery on August 1, the company said in a news release.

On day one, Wall Street seemed happy with Flannery's selection.

Immelt who succeeded the legendary Jack Welch has been in the post of Chief Executive for 16 years and was instrumental in steering the company to take over French industrial giant Alstom apart from proposing a merger with oil major Baker Hughes.

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However, since Mr Immelt became CEO in 2001, GE's shares fell 30 per cent, while the S&P 500 index more than doubled.

Immelt's inability to move that stock price, indeed it fell by almost half during his tenure, was thought by many to be his undoing. His biggest critic is Trian Fund Management, an activist investment group led by Nelson Peltz, which has compiled a 2.3 percent stake in GE.

Even if it didn't force the CEO change, Trian will likely continue to wield influence.

Immelt will remain as chairman through the end of this year.

The shrinking of the company's portfolio of businesses is probably not over. Mr. Immelt had been looking for support as he shed GE's towering finance business.

"Immelt moved GE away from financial services and brought the company back to its bread-and-butter around heavy industrial services for manufacturing, oil, gas and energy", said Andy Sivaraman, senior vice president at Paramus, N.J. -based GE partner ITC Infotech.

The replacement of Immelt is marked by some vocal investor dissatisfaction. "Our focus is running the company for cash and growth".

The 55-year-old Flannery began his career at GE Capital in 1987 where he focused on evaluating risk for leveraged buyouts.

Other reports by GizPress

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