General Electric names Immelt replacement
- Author: Zachary Reyes Jun 13, 2017,
Jun 13, 2017, 13:52
He takes over from Jeff Immelt who will step aside August 1 after 16 years as the head of the conglomerate he helped steer through the financial crisis but is now worth a third less than when he took over. After the financial crisis, he sharply pared down the financial services business that Welch had built up and went on a spending spree to acquire businesses in the power and oil and gas sectors. GE on Monday received USA antitrust approval to combine its oil and gas operations with Baker Hughes, potentially creating an oil services powerhouse with more than $32 billion in revenue.
GE shares had been down almost 13 percent in 2017, but early Monday they rose 3.8 percent to $29.
Since Immelt became CEO in 2001, GE's shares have declined 30 percent, while the S&P 500 index more than doubled.
Stock in General Electric responded to the news by popping $1.45, or 5.2%, to $29.39, soon after the opening bell on Monday, within 52-week trading range of $27.10 to $33.00.
GE has spent billions building a digital business that marries electronic sensors and powerful analytic computing to industrial equipment and has no plans to change that focus.
Mr. Immelt, 61, sold off GE's media businesses and divested the bulk of the company's lending businesses after the financial crisis.
Immelt has been at the helm of GE since 2001, overseeing a transformation that included selling numerous company's businesses.
There had been great expectations when Jeffrey Immelt, right, replaced the legendary Jack Welch, left, as CEO back in 2001. Trian, the firm co-founded by Nelson Peltz, took a $2.5 billion stake that year while saying it supported the portfolio shift.
Flannery, 55, who is now president and CEO of GE Healthcare, started working with GE Capital about three decades ago.
The relationship with Trian began to sour in recent months as investors questioned GE's performance. Trian declined comment on the CEO change on Monday.
"Although the succession topic has been swirling for much of the past year, today's announcement comes as a surprise, especially regarding the short timeframe for the hand-off", Deane Dray, an analyst at RBC Capital Markets, said in a note.
Jeff Bornstein, GE's chief financial officer, was promoted to vice chair. It could even find a new ear in Mr. Flannery's.
John Flannery will take Immelt's place as CEO and Chairman next year, bringing with him a wealth of GE experience from his time running GE Healthcare and GE operations in India, according to Jack Brennan, the independent director of the company's Board of Directors.