GE Up on Change of the Guard
- Author: Zachary Reyes Jun 17, 2017,
Jun 17, 2017, 19:13
The 30-year General Electric (GE) veteran poised to take over as the industrial conglomerate's chief executive promised Monday to review every part of a vastly simplified but sprawling portfolio - and the division he now heads could be next on the GE chopping block, in one analyst's view.
GE has been accused by activist investor Nelson Peltz who wanted the company that was hit by plunge in oil prices to cut its costs in order to boost the profits. Mr. Flannery will take over the role of chairman on January 1.
There's no exact amount confirmed for Flannery's net worth, but we wouldn't be surprised if it were in the high millions.
Immelt will remain as chairman through the end of this year. He will step into the chairman role January 1. In addition, Jeff Bornstein, current CFO, has also been promoted to Vice Chair of GE.
GE said the succession plan "has been run by the GE board of directors since 2011".
"He brings unique experience and a strong skill set to the job", said Jack Brennan, lead independent director for GE's board of directors.
Flannery, 55, tweeted that it was an honor to take over as head of General Electric. In 1997, Flannery moved to Argentina, where he successfully led GE's Equity business in Latin America and the overall GE Capital business in Argentina and Chile.
In March, GE said talks with Trian led the company to increase cost-cutting targets through 2018. The company acquired the power business of France's Alstom three years ago. He has a track record of success and led one of our most essential businesses. In a sign of just how much opposition had built against Immelt in the investing community, the stock soared the most in more than a year and a half after the announcement was made.
The announcement caps a long career for Immelt, who replaced Jack Welch, GE's legendary chairman and chief executive, just days before the September 11, 2001, terrorist attacks in the United States.
Immelt also got rid of the NBC television network, a division of the company, GE appliances and GE announced last week that it is seeking to sell off it light bulb business - an iconic piece of the company since it was co-founded by Thomas Edison, the light bulb's inventor.
NOGUCHI: Today it is focused more on its core industrial operations and health care.
The systemically important designation was removed from GE Capital past year.
Investors sent the stock climbing 3.6% to $28.94 on the news Monday, adding almost $9 billion in market value, as new leader John Flannery promised a broad review of the business "with a sense of urgency".
During the town hall discussion, Flannery said he thinks GE will be a leader in areas like digital products and 3D printing. GE also said it would seek to link bonuses for senior managers to achieving those cost-cutting and profitability goals.