General Electric, Boston, announced H. Lawrence Culp, Jr., as the new chairman and chief executive officer of the company, replacing John Flannery. The announcement came with a report that the company will fall short of free cash flow and earnings guidance for 2018. GE also named Thomas W. Horton as lead director of the corporation. Culp and Horton have both served on GE’s board of directors since April 2018.
Due to weak performance at GE’s Power business the company said it will fall short of guidance and expects to take a non-cash goodwill impairment charge related to the GE Power business. GE Power’s current goodwill balance is approximately $23 billion and the goodwill impairment charge is likely to constitute substantially all of this balance, GE said in a release. The impairment charge is not yet finalized and remains subject to review.
Culp comes to GE with an executive track record that includes the turn-around of Danaher Corp., where he was CEO from 2000 to 2014. During that time he transformed Danaher from an industrial manufacturer into a leading science and technology company. He also executed a disciplined capital allocation approach, including a series of strategic acquisitions and dispositions, a focus on investing for high-impact organic growth and margin expansion, and delivering strong free cash flow to drive long-term shareholder value, said GE’s release announcing the CEO change. During Culp’s 14 years at the head of Danaher, the company’s market capitalization and revenues grew five-fold.
“GE remains a fundamentally strong company with great businesses and tremendous talent. It is a privilege to be asked to lead this iconic company. We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency. We remain committed to strengthening the balance sheet including deleveraging. Tom and I will work with our board colleagues on opportunities for continued board renewal. We have a lot of work ahead of us to unlock the value of GE. I am excited to get to work,” Culp said in the GE release.
Flannery was named to succeed longtime top executive Jeff Immelt in June 2017 and had struggled to right the ship.
Horton, the lead director, served as chairman and chief executive officer of American Airlines from 2011 to 2013, and chairman of American Airlines Group from 2013 to 2014.