GE’s board has announced a major shakeup at the top of the company’s corporate ladder.
The conglomerate on Monday announced that it has removed former CEO and chairman John Flannery, replacing him with Lawrence Culp, effective immediately. GE also appointed Thomas Horton, who already serves on its board, as the company’s lead director.
In a statement, Culp called his new position a “privilege” and said that he plans to “move with urgency” to address the company’s woes. Culp specifically cited improving GE’s balance sheet and reduce its debt load, but acknowledged that he and his team “have a lot of work ahead of us.”
The board’s move comes in a little more than a year after it appointed Flannery as GE’s chief executive. During his time with GE, Flannery worked on a turnaround plan that would center on aviation, power, and health care. Flannery worked to divest GE’s interests in other operations and improve the company’s increasingly poor performance. But since his appointment in August 2017, GE’s business woes have grown and its stock price has sunk to new lows. On Friday, the company’s shares were down to $11.29, far from its 52-week high of $24.89.
Culp joined the GE board in April. He previously served as CEO and president at the conglomerate Danaher between 2000 and 2014. In a statement on Monday, GE lauded Culp’s tenure at Danaher and said that he “executed a disciplined capital allocation approach, including a series of strategic acquisitions and dispositions,” among other activities. Danaher’s revenue and market cap grew “five-fold” during his time at the company, according to GE.
In addition to announcing the executive shakeup, GE also said on Monday that its power business has been performing worse than anticipated and will not hit its 2018 cash flow and earnings guidance. GE will need to take a goodwill impairment charge of nearly all the $23 billion in its goodwill balance, according to the company.
Despite that, shareholders seem pleased. In pre-market trading, GE’s shares are up 14.4% to $12.92.