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GE CEO Immelt stepping down, Flannery to take over role

Immelt has led the company's for 16 years, overseeing a transformation that included selling many of its units.


NEW YORK — General Electric says Jeff Immelt is stepping down as CEO and John Flannery, president and CEO of the conglomerate’s health care unit, will take over the post in August.

The 61-year-old Immelt will stay on as chairman until his retirement from the position at the end of the year, with the 55-year-old Flannery stepping into the role after that.

Immelt has been at the helm of the conglomerate for 16 years, overseeing a transformation that included selling many of the company’s units. Over that time, General Electric sold its insurance, credit card, plastics and security divisions.

It also invested more heavily in new technologies, including a recent $1.65 billion acquisition of LM Wind Power, a Denmark-based manufacturer of rotor blades for wind turbines.

Flannery is a longtime General Electric executive, starting his career at GE Capital in 1987. He became president and CEO of the company’s equity unit in 2002 and eventually joined the health care unit in 2014, focusing on advanced technologies.

In addition, Chief Financial Officer Jeff Bornstein was named vice chair and Kieran Murphy was named president and CEO of GE Healthcare to succeed Flannery.

GE said that the moves were part of its succession plan.

Immelt took the helm in 2001 from legendary CEO Jack Welsh. After the financial crisis, he sharply pared down the financial services business that Welsh had built up and went on a spending spree to acquire businesses in the power and oil and gas sectors. During his tenure Immelt also disposed of GE’s appliance unit and the NBC television business.

The 61-year-old Immelt will stay on as chairman until his retirement from the position at the end of the year, with the 55-year-old Flannery stepping into the role after that.

While GE credits Immelt with improving its financial performance and its focus, GE’s stock price has trailed the market with him as CEO.

The stock was worth a bit less than $40 on Immelt’s first day in 2001, with the US in the middle of a recession. The stock briefly rose above $40 in 2007, just ahead of the economic crisis. It sank as low as $6.66 in March 2009 in the depth of the crisis, and closed at $27.94 a share Friday.

Analyst Robert McCarthy at Stifel Nicolaus wrote in a note to clients that the timing of the change in leadership was “unsurprising since the serial underperformance of the stock.” GE said the moves were part of its succession plan.

Immelt spent the second half of his time as CEO returning the company to its less-risky industrial roots. In 2007, GE’s finance arm accounted for about 55% of its profits, but its large exposure to commercial real estate left it vulnerable during the financial crisis.

Immelt instead focused on products like energy-generating windmills, gas turbines for power plants, online medical records and energy saving equipment for electrical grids as a source of new profits.

GE made big acquisitions under Immelt to bring new business and technologies to GE. The company acquired the power business of France’s Alstom three years ago. GE on June 12 received US antitrust approval to combine its oil and gas operations with Baker Hughes, potentially creating an oil services powerhouse with more than $32 billion in revenue. The approval is conditioned on GE selling its Water and Process Technologies business.

GE also remains one of the world’s biggest producers of jet engines.

Flannery is a longtime General Electric executive, starting his career at GE Capital in 1987. He became president and CEO of the company’s equity unit in 2002 and eventually joined the health care division in 2014, focusing on advanced technologies.

In addition, Chief Financial Officer Jeff Bornstein was named vice chair and Kieran Murphy was named president and CEO of GE Healthcare to succeed Flannery.

News from © Canadian Press Enterprises Inc. 2016

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