GE boss exit and $23bn hit stun Wall Street

Running General Electric is one of the most important, most prestigious and best-paid jobs in corporate America.
The company is a bellwether for American manufacturing, employing 313,000 people around the world, a third of whom work in the United States itself.
It is one of the most important payers of dividends to US pension funds and therefore crucial to the long-term retirement savings of millions of Americans.It is also an absolute beacon of stability as companies go.Until last year, just four people had held the post of GE chairman and chief executive during the previous half-century: Fred Borch, British-born Reginald Jones, Jack Welch and Jeff Immelt.So news that the latest incumbent, John Flannery, has been replaced as chairman and chief executive after just 13 months is a considerable shock. His departure was accompanied by news of a $23bn write-down in the value of the assets in GE's power division.The company has recruited two renowned turnaround experts to replace Mr Flannery.Larry Culp, who becomes chairman and chief executive, oversaw a dramatic recovery at Danaher, another large US manufacturer often compared with GE, while Tom Horton, who joins as senior director, restored the fortunes of American Airlines.It is the first time in its 126 year history that GE, which was co-founded by the legendary inventor of the light bulb, Thomas Edison, has hired an outsider to run it. GE's battered shares have risen sharply on the news.Mr Flannery, who succeeded Mr Immelt in August last year, had been at GE for 30 years, most of it in the group's financial services arm GE Capital, but latterly running its healthcare arm.
GE boss exit and $23bn hit stun Wall Street

Jeffrey Immelt (R) and John Flannery
He was appointed with a mandate to continue with the extensive restructuring begun by Mr Immelt in his later period in office and, in November last year, announced that GE would be restructured into just three divisions - healthcare, aviation and power - with other operations, such as lighting and transportation, being sold or shrunk.That announcement was accompanied by news that GE was halving its dividend, only the second time since the Great Depression - and only the third time ever - that the company had cut its payout to investors, sparking anger among some.Warren Buffett, the world's most famous investor, said in February this year that he had sold most of his holding in GE. In June this year, GE announced its healthcare arm would be spun off altogether.
See also:
Leave a comment
  • Latest
  • Read
  • Commented
Calendar Content
«    Июль 2020    »