General Electric sacked chief executive John Flannery after just 14 months in the job as the company announced a $23bn write off of goodwill in its power division.
Board member Lawrence Culp will replace Mr Flannery as boss of the US conglomerate in a surprise move that sparked an 8 per cent share price rally.
The shares had more than halved since Mr Flannery, a three-decade GE veteran, became chief executive in August 2017. On Friday GE was worth less than a fifth of its peak value a generation ago.
Mr Flannery had replaced Jeff Immelt, who had led GE since 2001.
Falling profits at its power division last year forced GE to slash its overall profit outlook and cut its dividend for only the second time since the Great Depression.
GE’s board, meeting in the last few days, unanimously picked Mr Culp as its new chief execuitive. Mr Culp, 55, who was named to GE’s board in February, was chief executive of Danaher Corp from 2000 to 2014, helping grow an industrial company into a broader conglomerate through a series of acquisitions, while growing earnings.
Some analysts said GE Power likely missed financial targets for the third quarter, contributing to Mr Flannery’s ouster.
Mr Flannery’s departure underscores the slow pace of his efforts to turn around GE. Despite cutting jobs and shedding businesses, GE’s results continued to deteriorate, mainly due to problems at its power plant division, which makes electric generating equipment.
GE doubled down on fossil fuels in 2015 under Immelt with the $10.3bn purchase of French group Alstom’s power business. The deal expanded GE’s exposure to gas, coal and nuclear power. It added employees, dozens of factories and service centres at a time when GE was trying to cut costs.
Additional reporting by Reuters
