Business

General Electric dumps CEO

By Bill Moss, Published: October 1, 2018

General Electric Co. announced on Monday that it had replaced chairman and CEO John Flannery after just 14 months on the job after a hoped-for turnaround in the company's finances failed to materialize.

Once a titan of Wall Street, General Electric installed 55-year-old H. Lawrence Culp Jr. as chair and CEO. Culp, who ran Danaher Corp. from 2000 to 2014, is the first outsider to become CEO in GE’s 126-year history, the Boston Globe reported.

GE's Lightning Solutions plant in East Flat Rock has figured in the iconic company's financial troubles. Along with other plants in its lighting solutions division, the East Flat Rock location has been put on the block. So far, no buyer has been announced and the plant is still operating in the meantime.

In February GE reached a deal to sell the overseas units of the lighting business. "Shedding the remaining, mainly U.S.-based lighting business is part of a broad restructuring plan aimed at divesting $20 billion worth of assets to focus the remaining company on three core divisions: power, aviation and health care," Reuters reported.

GE also said it will take a huge writedown of $23 billion at its troubled power unit that will total as much as $23 billion, the Globe reported, and it withdrew its earnings and cash flow guidance for 2018.

“While GE’s businesses other than Power are generally performing consistently with previous guidance, due to weaker performance in the GE Power business, the Company will fall short of previously indicated guidance for free cash flow and EPS for 2018,” the company said in a statement.

Culp served as President/CEO of Danaher Corporation from 2000 to 2014.

"During his tenure (at Danaher), he led the highly successful transformation of the company from an industrial manufacturer into a leading science and technology company," GE said in a news release. "Under Mr. Culp’s leadership, Danaher executed a disciplined capital allocation approach, including a series of strategic acquisitions and dispositions, a focus on investing for high-impact organic growth and margin expansion, and delivering strong free cash flow to drive long-term shareholder value. During his 14 years at the head of Danaher, the company’s market capitalization and revenues grew five-fold."