Published: Fri, October 05, 2018
Medicine | By Debra Reynolds

A Look at Larry Culp’s Career

A Look at Larry Culp’s Career

General Electric Co (GE.N) replaced Chief Executive Officer John Flannery on Monday and said it would take a roughly $23 billion charge to write off goodwill in its power division, primarily from a large acquisition it made in 2015.

Its shares are up 15% in Monday pre-market at $13.00 as the conglomerate dumped John Flannery as its chief executive, after just over a year in the job. The stock was up almost 9 percent to $12.29 in Monday trading after the CEO announcement.

Flannery on the same day said that GE might take the radical step of splitting up the main company's three main components - aviation, health care and power - into separate businesses.

Speaking to Recharge last week in Germany, Pete McCabe, GE's chief executive for onshore wind, said there are still too many turbine OEMs in the global market, and he expects the number to shrink over the next few years as the global move away from renewables subsidies continues.

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GE also announced its cash-flow and earnings per share would be less than previously indicated, because of problems at its GE Power division. It is a privilege to be asked to lead this iconic company.

"GE remains a fundamentally strong company with great businesses and tremendous talent", Culp said in a statement.

Culp said in a statement, "We will move with urgency".

Changing CEOs "won't fix short-term problems at power but Larry (Culp), as an outsider, will be able to make the hard decisions on cost", said Scott Davis, an analyst at Melius Research in NY. The stock had been down more than 30% this year as of market close Friday.

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Flannery will be replaced by H. Lawrence (Larry) Culp, Jr. GE also appointed Thomas Horton, who already serves on its board, as the company's lead director. Culp was named to the GE board earlier this year. The company has been forced to sell off divisions and lay off employees, a process that accelerated under Flannery.

However, GE will not be changing its announced breakup plan, which calls for spinning off healthcare and shedding its stake in oil services company Baker Hughes, the source added.

Culp has won praise for transforming industrial conglomerate Danaher and is seen as bringing that experience to GE, which has been floundering for two years.

Flannery's departure comes as he was trying to turn around GE, including through a series of major planned divestitures from the sprawling company. Flannery said he expected the power business to "remain weak through 2020." 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.

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