GE Healthcare CEO promoted, will be replaced by head of life sciences

The 30-year General Electric (GE) veteran poised to take over as the industrial conglomerate's chief executive promised Monday to review every part of a vastly simplified but sprawling portfolio - and the division he now heads could be next on the GE chopping block, in one analyst's view. "We expect Mr. Flannery to be more aggressive in this regard and we would not expect any sacred cow".

Flannery, 55, will become CEO on August 1 and assume chairman duties following Immelt's retirement on December 31.

"GE broke ground the other day on their new site", Walsh said. The new CEO may be more willing to pursue a much-needed breakup of the company, Davis said. An analyst on the call said that could ironically spell trouble for GE's health care unit, which the company itself describes as a core business.

During Immelt's tenure, GE bought French peer Alstom's power business and announced a deal to acquire oil and gas company Baker Hughes, while jettisoning the NBC unit and even its famed appliances division. Meanwhile, the giant corporation made acquisitions in areas like energy, life sciences, software, avionics, and 3D printing.

Past GE leaders have tended to have lengthy experience on the manufacturing side of the business.

The activist and its co-founder and Chief Investment Officer Ed Garden had increased the pressure on Mr. Immelt this year.

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And his Florida resort, which he's visited seven times as president, pulled in millions of dollars more than it had previously. But he has completed federal forms as he was obliged to reveal his personal and family incomes, his assets and his debts.

Under Immelt's leadership, GE shares have fallen 26.4% from $39.66. During the town hall, he said Immelt was "miles ahead of the world in redefining us as a digital industrial company". "The board is confident that in the years to come, GE investors and employees will benefit from Jeff's hard work". Immelt took over as CEO on September 7, 2001, four days before the terrorist attacks.

Wall Street signaled early approval of GE's leadership transition.

Investors sent the stock climbing 3.6% to $28.94 on the news Monday, adding almost $9 billion in market value, as new leader John Flannery promised a broad review of the business "with a sense of urgency". GE's current market cap is $251.3 billion. It would take several years to determine the pay-off of some of Mr Immelt's initiatives, including a digital division, he said. He also held a three-year term as president and CEO of GE Equity.

One of the more innovative ideas launched by GE recently is the design of prefabricated drug factories for making complex biotech medicines, an idea it is pioneering in both China and Ireland.

He said that while "no one's happy with the stock price now", the health care sector in particular offered "so much long-term growth", adding that GE was "just scratching the surface of what we can do in that business".

It's worth noting that Immelt also ran GE Healthcare before he was tapped for GE's top post. "That's clearly a strong signal to the market where they think an important part of their future lies".

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