GE Chief Out After Barely A Year On The Job

John Flannery is out as chairman and CEO at General Electric after less than two

John Flannery is out as chairman and CEO at General Electric after less than two

In other boardroom news Monday, drugs behemoth Pfizer Inc (NYSE:PFE) saw its shares lose 0.18% to stand at $43.99 before the NY bell.

GE plans to provide more financial information in conjunction with its third-quarter earnings release due on October 25.

To pay off debt and jump-start the stock, Flannery announced plans to sell many of GE's businesses, including its century-old railroad division, Thomas Edison's light-bulb unit, Baker Hughes and the health-care unit that makes MRI machines.

GE's other bombshell was that it planned to write down effectively up to $23bn in value from its troubled power business, the prime catalyst of its nosedive in stock market valuation.

Also on Monday, GE announced a $23 billion good will impairment charge related to its struggling power business. Culp, 55, was CEO of Danaher from 2000 to 2014.

GE cited "weaker performance in the GE Power business" as one reason for the change at the top. "I am excited to get to work", Mr Culp said.

A note from Briefing.com said Culp's appointment was promising, saying that he led "Danaher's transformation from an industrial manufacturer into a leading science and technology company".

Flannery had taken a series of steps to try to stop the bleeding, including cost cuts and significant portfolio changes.

The power division's outlook appeared to worsen last month when GE said several power plants equipped with its newest turbines had to be shut down because of a part failure.

"He's an outsider and maybe it's going to take an outsider to come in and fix this thing", said Scott Davis, an analyst with Melius Research.

Mr Davis said the stock price has probably already adjusted to expectations of no contribution from power.

Flannery vowed to give GE more of a high-tech and industrial focus by zeroing in on aviation, power and renewable energy - businesses with big growth potential. The company received a slap in the face in June when it was removed from the prestigious Dow Jones Industrial Average; GE had been the last original member of the 1896-created blue-chip index, and had continuously been a member since November 1907. GE will need to take a goodwill impairment charge of almost all the $23 billion in its goodwill balance, according to the company.

"The market seems to be welcoming a change in leadership but the new CEO will be facing numerous same problems Mr. Flannery faced", he said in a note to investors.

Flannery's response has included the sale of some assets and the elimination of more than 12 000 GE power jobs.

GE's long stock slide means the once-largest U.S. industrial company is now only sixth in terms of market capitalization, behind Boeing Co, 3M Co, Honeywell International Inc, United Technologies Corp and others.

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