A Look at Larry Culp’s Career

Eileen GuzmanOct 02, 2018

General Electric has booted out its chairman and chief executive, John Flannery, after a little more a year on the job, amid declining profits and cash-flow problems.

GE Power's current goodwill balance is about $23 billion and the goodwill impairment charge is likely to constitute substantially all of this balance, the company said.

GE shares are up more than 10% on the news.

The profit disappointment and massive accounting writedown are just the latest in a long line of misses dating back to the leadership of Jeff Immelt, who led GE between 2001 and June of previous year.

In hiring Mr. Culp, 55 years old, GE brought in a leader who ran what some investors saw as a model industrial conglomerate.

While noting that while Culp has work to do, "I wouldn't want to bet against Larry", Davis added.

"GE remains a fundamentally strong company with great businesses and tremendous talent", H. Lawrence Culp, the company's new CEO, said in a statement. The operation has struggled with a downturn in the gas-turbine market.

Stock prices have decreased by more than half since Flannery took the top job in August of 2017, and with the news of his departure, GE's shares rose 15 percent before the opening bell on Monday.

Deal volume topped US$22 billion during Culp's 14 years at the head of the company, with his biggest move being the 2011 acquisition of diagnostic-equipment maker Beckman Coulter Inc. for US$6.8 billion.

"Given the amount of portfolio change at the company and the prospect for further shifts in light of this news, one drawback is that shareholders do not know exactly what they will be owning in a year or two, but this factor has not stopped investors from trusting in portfolio changes at DHR and FTV".

GE, however, has not seen such gains, particularly when it comes to its power business which was hit by problems with its latest generation of gas turbines and posted a $10 billion loss a year ago.

Culp, who joined GE's board of directors in April of 2018, was the former CEO of Danaher Corp from 2000-2014. That will leave it focused on areas such as jet engines, power plants and renewable energy. Its value slipped below $100 billion even as Flannery announced a breakup. "We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency", Culp said.

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