GE unexpectedly removes its CEO
BOSTON — General Electric, mired in a deep slump, has ousted CEO John Flannery after barely a year on the job.
Flannery is being replaced by H. Lawrence Culp Jr., the former CEO of Danaher, an industrial company. GE also installed Thomas Horton, the former CEO of American Airlines, as its lead director. Both changes are effective immediately.
GE also revealed more bleak financial news: The conglomerate warned that its 2018 profit will “fall short” of guidance because of “weaker performance” at its struggling power division.
GE further warned it will take an impairment charge related to GE Power. The company said the charge, which is still being finalized, will likely total nearly $23 billion.
“GE remains a fundamentally strong company with great businesses and tremendous talent. It is a privilege to be asked to lead this iconic company,” Culp said in a statement. “We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency.”
The stock jumped 11% in premarket trading.
GE has been hobbled by years of poorly timed deals and needless complexity. To pay off debt and jump-start the stock, GE is selling off countless businesses, including its century-old railroad division, Thomas Edison’s light-bulb unit, Baker Hughes and the health-care unit that makes MRI machines.
The company was booted from the Dow earlier this year. Last week the company’s market value fell below $100 billion for the first time since March 2009.
This is a developing story.