General Electric replaces new chief executive and announces massive $23 billion charge amid struggle

[DonViejo]

Source: The Washington Post



By Washington Post Staff

October 1 at 7:43 AM

Just a year after John Flannery took over the industrial giant, General Electric announced it would replace him as chief executive. Lawrence Culp, former chief executive of Danaher Corp., will replace him. GE also said it will take a $23 billion non-cash charge for its power business and said it will fall short of earnings expectations in 2018.

GE’s stock has declined dramatically in the past year as the company saw its stock price fall and its market capitalization decline to less than $100 billion.

This is a developing story. It will be updated.

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Read more: https://www.washingtonpost.com/news/business/wp/2018/10/01/general-electric-replaces-new-chief-executive-and-announces-massive-23-billion-charge-amid-struggles/

[democratisphere]

1. Way to wreck another iconic American company with sh'tty incompetent wall street management.

[bucolic_frolic]

2. If they bagged someone from Danaher they hit pay dirt

This guy will be experienced in the extreme in operational, material, and supply chains, fluent in technology of all kinds, able to streamline and grow. Stock is up $1.65 premarket. Biggest corporate move in a long time.

[laserhaas]

3. G.E. got duped into Wall Street management, because

Wall Street types, like Bain Capital, are built upon high scale schemes.

GE doesn't fit that (Machiavellian) mold; and has paid a price for trying.

[Maeve]

4. Sad to watch a giant fall

My mom had stock in GE (stepdad was with them for years) and finally sold it at a big loss just to get it off her hands. She held onto it for so long out of belief that it was too big to fail.

[DavidDvorkin]

5. I still have a small amount

From the time I worked for a GE subsidiary. I'll hold onto it.

[BumRushDaShow]

6. They need to go back to their "core business"

All of these companies (Sears included) bought into the ridiculous business model mentality of "diversify diversify diversify", by going completely out of their original mission and dabbling into finance and other things - i.e., bullshit like "GE Capital Management".

They became a big piggy bank for the vultures who knew what they were doing when it came to milking a company and skirting the authorities before exiting, leaving the remains to collapse.

[progree]

7. Their turbine business is declining (while renewable energy is booming)

The problems at GE's troubled power unit can't be fixed quickly, CNBC, 10/1/18
https://www.cnbc.com/2018/10/01/the-problems-at-ges-troubled-power-unit-cant-be-fixed-quickly.html

Excerpts:

At the core of the company's problems is its failure to forecast a downturn in demand for its turbines, the titanic machinery that powers natural gas and coal-fired power plants. That failure left GE with too much capacity in a market that is cooling off amid booming demand for renewable energy.

In its latest quarter, revenues in the power sector fell 19 percent, while profits were down 58 percent. Orders for new equipment were down 26 percent at $7.4 billion.

GE does not see demand rebounding soon. The market for gas-powered turbines will total less than 30 gigawatts this year and remain stagnant through 2020, GE forecast. Two years ago, the market for gas turbines stood at 48 gigawatts.

In light of that, GE expects its 2018 turbine sales to be about half what they were last year.