Jeff Immelt to depart as GE names new chief executive

New York: General Electric has announced a leadership shakeup as it faces scrutiny after a corporate makeover executed by outgoing chief Jeff Immelt in the wake of the 2008 financial crisis failed to ignite strong growth.

Immelt, 61, will step down as chief executive on August 1, handing the reins to GE Healthcare president John Flannery, a 30-year veteran of the company whose previous roles included country chief in .

During a conference call with analysts, Immelt said the transition was first discussed in 2013 and GE leadership had targeted summer 2017 to make the change.

But the announcement also comes after activist investor Nelson Peltz, one of the most influential voices on Wall Street, invested in GE, which has been hit hard by the plunge in oil prices. Peltz has pushed GE to deepen cost cuts to boost profits.

Questioned by analysts on the merits of GE's conglomerate model, Flannery, 55, pledged he would undertake "a comprehensive review of the portfolio," with an update in the fall.

But he said he had seen firsthand the benefits of GE's diverse structure while leading the health care division, during which he "borrowed" from the company's technology and global supply chain.

"I see the reality of this in a very tangible way all the time," Flannery said.

The GE transition comes three weeks after Ford abruptly changed chief executives. Others, including Honeywell International and Caterpillar, also have announced new leaders over the last year as traditional industrial companies seek new chiefs to help them adapt to an increasingly digital economy.

Immelt's 16-year tenure began shortly before the September 11, 2001 attacks on the United States and was also roiled by the 2008 financial crisis.

In the aftermath of the financial crisis, he oversaw a spate of large divestments from GE Capital to unload what was effectively the fifth biggest US bank.

Immelt, who succeeded the legendary Jack Welch, also led GE through the 2015 purchase of the power assets of French industrial giant Alstom, and a proposed merger with oil services company Baker Hughes engineered to better manage the effects of a two-year slide in oil prices that has dented GE's oil services earnings.

Yesterday, US antitrust officials ordered GE to divest a unit that sells chemicals to oil refineries as a condition of winning regulatory approval.

Immelt also has taken steps to beef up GE's technology businesses, including by investing in the 3D printing, which is seen as a growth area.

Despite these efforts, analysts have a mixed views of Immelt's tenure.

"We continue to believe that any new leader here needs a material reset," said JPMorgan Chase analyst C. Stephen Tusa, Jr.