GE Abruptly Fires CEO John Flannery, Appoints Lawrence Culp as Chief Executive

GE CEO John Flannery

"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". The change is effective immediately. 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.

The company's power business, hit by problems with its latest generation of gas turbines, posted a $10 billion loss previous year.

"The challenges that GE faces (high leverage; Power's cyclical, structural and operational challenges; etc) are not easily or quickly fixable". The company said that the goodwill impairment charge is likely to constitute all of this balance.

Flannery will be replaced by H. Lawrence Culp, a current GE board member who served as chief executive of the Washington, D.C. -based conglomerate Danaher Corp. from 2000-2014, GE said.

In hiring Mr. Culp, 55 years old, GE brought in a leader who ran what some investors saw as a model industrial conglomerate. We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency. We have a lot of work ahead of us to unlock the value of GE.

While noting that while Culp has work to do, "I wouldn't want to bet against Larry", Davis added.




Larry Culp has a proven track record in company transformation and delivering shareholder value.

Horton said he's looking forward to revitalizing GE as a company with growth and long-term success. The executive, who also teaches at Harvard Business School, only joined the GE board in April.

"We are not sure if this news implies a radically different strategic plan than the one announced in June, given Mr. Culp's involvement at the time".

The shares climbed 15 per cent to US$12.95 in NY premarket trading Monday.

Flannery, promoted from his most recent job as GE's health care division chief last summer, spent more than 30 years at the company. The problems deepened in the past two years as GE faced cash-flow shortfalls, slumping demand and investigations by the U.S. Securities and Exchange Commission.

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