GE CEO Flannery Removed as Losses Increase
- Author: Eleanor Harrison Oct 02, 2018,
Oct 02, 2018, 2:06
General Electric, one of America's most important companies, has shocked Wall Street by replacing John Flannery, its chairman and chief executive, after just over a year in the job. GE now expects to miss its 2018 earnings forecast and take an impairment charge for nearly all of the US$23 billion of goodwill associated with its power segment.
The company, a bellwether for manufacturing, also announced a $23bn impairment charge against the value of its power division.
GE shares were trading at $12.60 shortly before 10.00am Eastern on Monday.
GE warned Monday that it will miss its profit forecasts this year and it's taking a $23 billion charge.
Culp's time as CEO of Danaher was marked by expanding the reach of the company into fields as diverse as dental imaging and water filtration. "I am excited to get to work".
He will be replaced as chairman and CEO by H. Lawrence Culp, Jr. Those included the purchase of French gas-turbine maker Alstom, which GE bought in 2015 for more than $14 billion.
Larry Culp, a GE board member who ran United States manufacturer Danaher for more than a decade, is to replace GE veteran John Flannery, effective immediately. 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. The company has been forced to sell off divisions and lay off employees, a process that accelerated under Flannery.
The company has also appointed former American Airlines chief executive Thomas Horton as lead director on its board. That will leave it focused on areas such as jet engines, power plants and renewable energy. And in recent days the company's market value slipped below $100 billion after approaching $600 billion about 18 years ago. He previously served as CEO and president at the conglomerate Danaher between 2000 and 2014. Culp specifically cited improving GE's balance sheet and reduce its debt load, but acknowledged that he and his team "have a lot of work ahead of us". "We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency", Culp said.