GE unexpectedly removes its CEO
- Author: Darren Santiago Oct 02, 2018,
Oct 02, 2018, 2:05
General Electric has ousted its chief executive, installing new leadership for the second time in two years as it struggles to return to growth. We have a lot of work ahead of us to unlock the value of GE.
"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".
In hiring Mr. Culp, 55 years old, GE brought in a leader who ran what some investors saw as a model industrial conglomerate. GE also said it will take a non-cash goodwill impairment charge of "substantially all" of GE Power's current goodwill balance of about $23 billion.
The company said Monday that H. Lawrence Culp Jr. will take over as chairman and CEO immediately. As a result, the Boston-based company now expects to miss its free cash flow and earnings forecasts for 2018.
While noting that while Culp has work to do, "I wouldn't want to bet against Larry", Davis added.
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The board's move comes in a little more than a year after it appointed Flannery as GE's chief executive.
That same day, Flannery said GE might take the radical step of splitting up the main company's three main businesses- aviation, health care and power - into separate entities. So, by putting an end to Flannery's almost 2 year tennure at the company and bringing a trusted leader on board to replace him, the company has excited investors.
GE traces its roots to Thomas Edison and the invention of the light bulb, and the company grew with the American economy. It's cut the dividend twice since the more recent financial crisis.
Once considered the essence of a cutting-edge industrial conglomerate, GE has seen its fortunes - and its stock price - fall sharply over the past decade.
'We remain committed to strengthening the balance sheet including de-leveraging'. "We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency", Culp said. But since his appointment in August 2017, GE's business woes have grown and its stock price has sunk to new lows.