Power move

1 October 2018 By Tom Buerkle

The stumbling industrial group replaced its newish CEO with former Danaher boss Larry Culp, while taking a $23 bln hit on its power unit. By holding John Flannery accountable and expunging his predecessor’s legacy of dealmaking, GE’s board has shown welcome, if belated, spine.

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General Electric said on Oct. 1 that Lawrence Culp has been named chairman and chief executive with immediate effect, replacing John Flannery. The company also appointed Thomas Horton as lead director.

GE also said it will not meet previous forecasts for earnings and free cash flow for 2018 due to weaker performance in its power business. The company also said it will write down “substantially all” of that division’s $23 billion in goodwill as an impairment charge.

“GE remains a fundamentally strong company with great businesses and tremendous talent,” Culp, a former CEO and chairman of Danaher who joined the GE board earlier this year, said in a statement. “We remain committed to strengthening the balance sheet including deleveraging.”

The company’s shares were 14 percent higher at $12.83 in pre-market trading at 8:25 a.m. EDT.

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