Published: Sun, June 18, 2017
Money | By Armando Alvarado

General Electric CEO Jeff Immelt is stepping down


Immelt won widespread praise in 2015 for a plan to sell the bulk of the volatile GE Capital business and closing the Alstom deal amid heavy political pressure in France. This is a good opportunity for Boston and New England states as far as how do we grow GE, help them grow as a company.

"I see the reality of this in a very tangible way all the time", Flannery said.

Now that GE has a new leader, people are searching for John Flannery's wife and John Flannery's kids. During his tenure Immelt also disposed of GE's appliance unit and the NBC television business. 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. In a sign of just how great opposition to Immelt had become in the investing community, the stock soared the most in more than a year and a half after the announcement was made.

Flannery, 55, tweeted that it was an honor to take over as head of General Electric.

In keeping with the company's push to define itself as a "digital industrial company", GE launched the energy management unit Current, which wraps efficient lighting and digital analytics into a smart systems products. The new CEO may be more willing to pursue a much-needed breakup of the company, Davis said.

Yet investors were unimpressed.

Immelt's tumultuous tenure began just a few days before the September 11, 2001, terrorist attacks, and included presiding over the company amid the financial crisis at a time when its exposure to financial services made up roughly half its net income. Even with the gain, the shares have dropped 8.4 per cent this year, compared with an 8.5 per cent increase for the S&P 500 Index.

Jeff Windau, an analyst at Edward Jones, likes the GE story, particularly restructuring out of capital.

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The company's shares rose 3.6 percent in premarket trading as Flannery's appointment to the top job ends a six-year long succession planning program.

On day one, Wall Street seemed happy with Flannery's selection. He also withdrew GE nearly entirely from financial services, which once accounted for about half of sales.

The division, which includes diagnostic imaging and life sciences, also does not have recurring, high-margin service revenue - like aircraft engines - and health care faces regulatory pressures, Dray pointed out. The digital strategy comes into play in this business, as well-GE is trying to make the software that runs those machines more sophisticated. "With the GE Capital pivot behind us and the company's transition to Boston complete, this is the ideal time for change".

Trian Fund Management had raised concerns with GE missing financial targets over a number of quarters.

Walsh said that he was "caught off guard" by General Electric's leadership shakeup announced Monday morning.

Immelt, 61, is stepping aside after 16 years as the head of the conglomerate. Immelt bought a $7.5 million home on Commonwealth Avenue in Back Bay a year ago ahead of the move, according to Boston Magazine.

Flannery said he found out Friday when Immelt called him.

"During this time of dynamic global markets and relentless focus on technology and operational excellence, there is no better person to lead G.E. than John Flannery", Jack Brennan, the company's lead independent director, said in a news release.

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