General Electric left Connecticut for Boston two years ago when its shares were trading at about $28. Now GE is trading at about $11 a share and it has fired its CEO, John Flannery, after just over a year at the helm.
Since Flannery took over last August, GE’s stock has plummeted, losing roughly 40 percent of its value. For decades, GE was an aggressive conglomerate gobbling companies as diverse as television, insurance, and real estate. Since the financial crisis, the company has struggled. Those struggles hit investors during Flannery’s tenure. He announced a $1.4 billion loss from subprime mortgages. His plan to transform the company by possibly breaking it did little to encourage investors.
Another core problem is GE’s power division. Generating power is a competitive business, and GE has been losing market share. On top of that, the company’s new turbine blades have malfunctioned.
In its announcement to replace Flannery, GE also said its power division is worth $23 billion less than previously stated.
Flannery will be replaced with Lawrence Culp, who is new to GE and the first outsider to lead the company ever. He previously ran Danaher, a company some investors call a modern model for how conglomerates should work.
