Following John Flannery’s resignation from General Electric Co’s as its CEO, GE’s board has unanimously endorsed H. Lawrence Culp Jr as its CEO.
General Electric Co’s CEO John Flannery has stepped down from his role in the company.
The development comes at a time when GE announced a $23 billion charge related to its struggling power business.
Flannery’s resignation from his role calls into question plans to reorganize one of America’s best-known corporations. Flannery had promised to revamp GE into a leaner company by divesting its non-core businesses and cutting jobs.
With the news reaching the market, GE’s shares rose by 15% before the opening bell on Monday. Incidentally, ever since Flannery took the top job in August 2017, GE’s shares have shed 50% of their value.
According to a CNBC report which cites a source, one of the reasons which drove Flannery from GE’s helm was the “slow pace of change” under his leadership.
H. Lawrence Culp Jr. Is now set to replace Flannery with full support from the board, said the company.
Culp is known for turning around Danaher, which was acquired by GE this February.
In 2017, GE’s power business posted a $10 billion loss due to issues with its latest generation of gas turbines.
GE has disclosed that it would fall short of its previously indicated guidance for free cash flow and earnings per share for 2018 due to weakness in its power business.
GE Power’s current goodwill balance is about $23 billion and the goodwill impairment charge is likely to constitute substantially all of this balance, said the company.