U.S. NEWS
10/01/2018 08:28 am ET

General Electric CEO John Flannery Abruptly Steps Down

The company's stock has more than halved since Flannery took the top job at GE just over a year ago.

(Reuters) ― General Electric Co (GE.N) Chief Executive Officer John Flannery abruptly stepped down on Monday just over a year after taking the role, and the company announced a $23 billion charge related to its struggling power business.

Flannery’s departure calls into question plans to reorganize one of America’s best-known corporations. He had promised to revamp GE into a leaner company by cutting jobs and shedding several businesses.

The company’s shares rose 15 percent before the opening bell. The stock has more than halved since Flannery took the top job in August last year.

Flannery’s departure from GE is driven by “slow pace of change” under his leadership, CNBC reported, citing a text from a source.

Flannery will be replaced by H. Lawrence Culp Jr., who had the unanimous support of the board, the company said.

Culp, known for turning around Danaher, was added to GE’s board in February.

The company’s power business, hit by problems with its latest generation of gas turbines, posted a $10 billion loss last year.

The company said 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, the company said.

(Reporting by Arunima Banerjee and Sweta Singh in Bengaluru; Editing by Saumyadeb Chakrabarty)

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