General Electric on Monday announced the departure of longtime chief executive Jeff Immelt, whose moves to refocus the American conglomerate on its industrial roots had drawn mixed reviews on Wall Street. Immelt, 61, who has served in the role since 2001, will hand his chief executive position over to John Flannery on August 1, the company said in a news release.
Flannery, 55, also will succeed Immelt as chairman when he retires on December 31, GE said. "John fits all the criteria our Board had set for the next CEO of the Company. He is a strong and courageous leader who can make tough decisions while inspiring his teammates," the company said. Flannery is currently the head of the GE Healthcare division. He joined the company's financial arm, GE Capital, in 1987. GE, which makes everything from aircraft engines to medical equipment, said the changes are part of a succession plan that has been in the works for several years.
But the announcement also comes after activist investor Nelson Peltz, one of the most influential voices on Wall Street, invested in GE, which has been hit hard by the plunge in oil prices. Peltz has pushed GE under Immelt to deepen cost cuts to boost profits. GE shares had been down nearly 13 percent in 2017, but early Monday they rose 3.8 percent to $29.
Immelt, who took over from the legendary Jack Welch, oversaw major deals such as the 2015 purchase of the power assets of French industrial giant Alstom and a spate of large divestments from GE Capital after the 2008 financial crisis that essentially unloaded what was effectively the fifth biggest US bank after the financial crisis hit the unit.
But Immelt's efforts to refocus on core industrial operations has had mixed results, in part due to a two-year slump that dented performance in its oil and gas business. In the most recent quarter, profits in GE's oil and gas division fell 33 percent to $207 million. Executives also gave a cautious outlook on the unit, saying that while oil prices have recovered from their lows during the slump, supplies remain lofty.
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