GE announced today it named H. Lawrence Culp Jr. as its new chairman and chief executive.
H. Lawrence Culp Jr., 55, served as CEO of Danaher Corporation. He joined the GE board in April this year.
“It’s been a privilege to be asked to lead this iconic company,” Culp said.
“GE remains a fundamentally strong company with great businesses and tremendous talent.”
GE said that GE businesses were performing on track with the exception of GE Power.
The company announced that a decline in the Power unit’s business outlook led to a “shortfall relative to 2018 guidance.” GE will take a non-cash impairment charge related to GE Power.
GE also reiterated that it remained committed to establishing its GE Healthcare business “as a separate independent entity and fully exiting its 62.5 percent interest in Baker Hughes, a GE Company, in an orderly manner.”
Culp joined the GE board of directors together with Thomas W. Horton, former chairman, and chief executive of American Airlines. Horton, 57, now becomes the board’s lead director.
“Tom and I will work with our board colleagues on opportunities for continued board renewal,” Culp said.
“We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency,” Culp said.
“We remain committed to strengthening the balance sheet including deleveraging. We have a lot of work ahead of us to unlock the value of GE. I am excited to get to work.”
As reported by Bloomberg, GE is on the verge of a staggering milestone: a half-trillion dollars in market value wiped out since that all-time high 18 years ago.
The iconic American corporation is now worth just under $100 billion, its stock at around $11 at Friday’s close, and investors are signaling they don’t expect things to get better.
While the stock surged Monday after the announcement of the change at the top, the shares - and the company - have a massive hole to dig out from.
Even longtime GE observers bears are stunned. “Wow,” said Steve Tusa, a JPMorgan Chase & Co. analyst who has followed GE since 2001, when asked about the half-trillion figure.
General Electric's sudden CEO change may have gained the market's vote of confidence, but to CNBC's Jim Cramer, it suggested something more serious.
"When you boot a CEO after just 13 months, the presumption is that the company's doing far worse than you think," Cramer, host of "Mad Money," told viewers. "Otherwise, why not let Flannery muddle through, right?"
"We learned, once again, that GE is doing far worse than we thought, that the power division is even more of a disaster, and there's no easy fix whatsoever," Cramer continued.
But with a "brilliant manager" like Culp, a GE board member who was CEO of science-and-tech colossus Danaher, GE can at least "put an end to the negative surprise chatter" associated with the company's overhaul efforts, the "Mad Money" host said.
"I do feel bad for John. He was trying to deal with the hand that Jeff Immelt left him. The hand was too hard," Cramer said on "Squawk on the Street."
Even so, Culp "was fantastic at Danaher," Cramer said. "So I think the company is in better hands.
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