The Slaughterhouse That Is GE

03:31 10/10/2017

Under pressure to provide for shareholders, General Electric Co. GE  has announced three of their top brass are leaving under new CEO John Flannery’s direction.

The company has fallen 23% this year alone closing at $24.39 on Friday compared to starting the new year at a little over $31 a share. Stakeholders and shareholders alike await Mr. Flannery’s long-term proposition in a scheduled meeting in November but in the mean time the proverbial heads are rolling.

The three were top executives under former CEO Jeff Immelt who left the company August 1 and resigned from the board earlier three months than expected. Mr. Immelt’s

Replacing Jeff Bornstein, GE’s CFO, is Jamie Miller, once GE’s chief information officer and head of transportation division starting November 1.

Jeff Bornstein is leaving at the year’s end and a surprise since at one time it was believed Mr. Bornstein would be replacing Mr. Immelt. Bornstein is a 28-year veteran at GE and assisted in accommodating GE’s need for oversight financially. This past June, Bornstein was named vice chair with a special retention package that he forfeited 80% of as a result of his decision to leave.

Another two executives parting ways with GE are Beth Comstock and John Rice.

Beth Comstock, head of marketing efforts is a 27-year veteran at GE who served as chief marketing officer. Recently she headed the company’s business innovation unit.

GE has named Pascal Schweitzer employed with GE since 2015 as interim replacing Comstock’s position as head of transportation business.

John Rice, one of GE’s leading international executives, is 39-years with GE. His management roll involved several business units with recent tasking of international ventures.

Given the recent news, Mr. Flannery’s attempt to turn around the company is under pressure from Tiran Fund Management, activist investor who has called for cost-cutting measures to take place after acquiring large stakes in the company.

Mr. Immelt was in the position with GE for 16 years who did turn the company from appliances to industrial machinery and energy. However, growth has stalled significantly that could be a result of the financial crises and energy not meeting expectations.

GE in fact took a wager on oil last year attempting to unify their oil and gas division with Baker Hughes, a highly specialized oilfield servicer. However, oil has underperformed and the market is in a state of surplus with global developments making growth an uncertain factor.

Some speculate that Mr. Flannery is attempting reconcile awareness for GE’s momentum for the future and a sign of a positive development as the changing of the guard.

Mr. Flannery’s entrance has also involved major oversight and utilization of lean management as reviews of GE portfolio, cutting costs and downsize occur.

The cut has also included some corporate assets like selling off jets reserved for the corporation and delaying Boston headquarters.

GE announced trimming $1bn in costs from industrial operations by next year end, so there may be more in store for GE under Mr. Flannery’s direction as timing is closing down with little more than a year to accomplish that goal. Among Mr. Flannery’s promise to investors was company dividends, a spotlight pledge for those shareholders with considerable skin in GE.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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