Economy

Flannery wins top GE job after nursing growth at healthcare unit

Flannery wins top GE job after nursing growth at healthcare unit

General Electric announced on Monday that Jeff Immelt is stepping down as chief executive.

Immelt, who took over from the legendary Jack Welch, oversaw major deals such as the 2015 purchase of the power assets of French industrial giant Alstom and a spate of large divestments from GE Capital after the 2008 financial crisis that essentially unloaded what was effectively the fifth biggest USA bank after the financial crisis hit the unit.

Current GE Healthcare President John Flannery, 55 will replace Immelt as CEO effective August 1.

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. While CEO, GE returned $143 billion to investors in dividends, more than in the entire prior history of the company.

"Immelt moved GE away from financial services and brought the company back to its bread-and-butter around heavy industrial services for manufacturing, oil, gas and energy", said Andy Sivaraman, senior vice president at Paramus, N.J. -based GE partner ITC Infotech.

GE's plans to turn around the business with a pending merger with Baker Hughes.

Immelt spent the second half of his time as CEO returning the company to its less-risky industrial roots. Successor John Flannery, who ran GE's health-care division, promised "a sense of urgency" but gave no specifics. "The board is confident that in the years to come, GE investors and employees will benefit from Jeff's hard work". GE on Monday reaffirmed its 2017 outlook while omitting mention of next year's profit target of $2 a share.

"John is the right person to lead GE today", Immelt said in a statement, according to CNBC.

The problem is that GE is an ever changing portfolio of businesses unconnected by any organizing principle.

The company's shares jumped 4.1 per cent to US$29.09 in early trading on Monday as Mr Flannery's appointment to the top job ended a six-year long succession planning program.

Despite a corporate overhaul that many lauded, Immelt has not had the same success as Welch did with the stock.

In the aftermath of the financial crisis, he oversaw a spate of large divestments from GE Capital to unload what was effectively the fifth biggest U.S. bank. He succeeds Flannery who has been appointed CEO and chairman elect of GE.

"It is interesting that Flannery comes from GE Healthcare; he seems to have a heavy finance background and can leverage that", he said. The plan for the GE CEO transition process was set in 2011.


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