GE Healthcare's Flannery named CEO of General Electric; Immelt to retire

GE Healthcare's Flannery named CEO of General Electric; Immelt to retire
GE Healthcare's Flannery named CEO of General Electric; Immelt to retire

13 June, 2017

General Electric Chairman and CEO Immelt and staff leave after a meeting with French President at the Elysee Palace in ParisThomson ReutersGE stock is up 4.7% on Monday following the news CEO Jeff Immelt is retiring.

USA technology and engineering conglomerate GE today (June 12) announced John Flannery, the current president and CEO of its healthcare unit, as the group's new CEO effective August 1 and chairman and CEO effective January 1, 2018. While GE ranks among the world's great industrial powerhouses, its stock price has languished and the company has been under particular pressure since Trian Fund Management, run by the billionaire investor Nelson Peltz, took a big stake in it almost two years ago.

Jeff Immelt took charge of the massive industrial company shortly after the 9/11 terrorist attacks and steered the business through the upheavals of the global recession. The new boss was seen as a big thinker who could guide GE into the digital age and do so with a lighter touch than his cutthroat predecessor.

Davis also told CNBC he expected Flannery would break up many of GE's businesses, suggesting a spinoff of GE Healthcare might already be in the works.

Yet investors were unimpressed. Immelt and GE have been under pressure from an activist investment fund to cut costs and increase profits to boost the stock price. "GE needed a new messenger".

Joyce O'Rourke, Flannery's junior year homeroom teacher, said Flannery was your "typical, fun-loving, all-around good kid".

Flannery told Reuters a year ago he aimed to "double down on life sciences", given this business's large and high-margin opportunities.

"We can weather the cycle in the short term and we will be very well positioned to lead the industry going forward", said Immelt at the time. Immelt will step down from the chairman position on December 31, and Flannery will take it over then, as well.

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In pre-market activity on the NYSE, GE shares were gaining 2.7 percent to $28.69.

GE's stock has dropped 3.7 percent in the previous year while the S&P 500 has increased 15.9 percent. Come Aug. 1, John Flannery, current president and CEO of GE Healthcare, will take the helm. He joined GE in 1987.

Mr Immelt said: "John is the right person to lead GE today".

"It felt like his agenda [at GE] is not quite complete", Greeley said, pointing out that Immelt is only 61.

Mr Immelt has become one of the world's best-known CEOs, yet never won the accolades that Wall Street bestowed on his predecessor.

Under Immelt's leadership, GE shares have fallen 26.4% from $39.66. He also built up the oil and gas division just before crude prices plummeted. He later moved to Argentina where he led GE's equity business in Latin America and the overall GE Capital business for Argentina and Chile. That led to an unusual disclosure in March in which GE said it had, in conjunction with Trian, pledged to lower annual spending by $2 billion in the next two years and tie executive bonuses to the effort. Trian didn't immediately respond to a request for comment. Trian may have been a factor, Dray said.

John Flannery's "star had clearly risen in the past six months".

The new CEO beat out colleagues such as Steve Bolze, the CEO of GE Power, and Jeff Bornstein, GE's chief financial officer.

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