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Immelt Fixed GE, Now Up To New CEO Flannery To Make Money For Investors

At forbes.com - Jeff Immelt Fixed General Electric, Now It's Up To New CEO Flannery To Make Money For Investors - Jun 12, 2017 @ 09:44 AM

A portion of the text:

Now comes a new CEO, John Flannery, who will hope to create the payoff from the Immelt-era at GE. Flannery’s career at GE is marked by operating turnarounds and stewarding businesses through challenging financial markets, particularly overseas.

Flannery began his career at GE Capital and spent the early 1990s in its restructuring and workouts business. By the end of the 1990s, his biggest stamp on the company came in South America where he oversaw businesses in Argentina and Chile. In 2002, Flannery became CEO of GE Equity just after the dot-com bust. Three years later, he moved to Asia to head GE Capital’s operations in countries like Japan, Korea and Australia, which all grew significantly in the ensuing years. During the crisis, Flannery headed GE’s businesses in India, increasing industrial sales by 50% by 2011.

In recent years, Flannery’s profile at the company has risen. He was one of the dealmakers at the heart of GE’s biggest moves, leading the Alstom acquisition and working on divestitures like Synchrony and GE Appliances. After striking those mega deals, Flannery was tapped to lead GE Healthcare in 2014, successfully leading a turnaround of the $3.2 billion in annual sales business unit.

“John is the right person to lead GE today. He has broad experience across multiple businesses, cycles and geographies. He has a track record of success and led one of our most essential businesses. Most important are his strong leadership traits - good judgment, resilience, a learner, team builder and a tough-minded individual and competitor,” CEO Immelt said of his successor, in a news release.

"I am privileged to have spent the last 16 years at the company working for Jeff, one of the greatest business leaders of our time,” said Flannery of his boss. “He has transformed the GE portfolio, globalized the company and created a vision for the GE of the future by positioning the company to lead in digital and additive manufacturing," Flannery added in the press release.

On a conference call with investors, Flannery took a tougher tone, stating he would conduct a deep review of GE's business, studying performance "with a sense of urgency." He added, "Clearly there's areas we need to improve on. No one's happy with the stock price right now... We know we can do better."




At seekingalpha.com - General Electric's (GE) Management Presents at Sanford Bernstein Strategic Decision Conference (Transcript) - Jun. 1.17

A Selected section from the transcript:

Lee Hambright - How does healthcare belong in the industrial portfolio? And what advantages do you see in both directions?

John Flannery - Yes. So this question, it comes all the time, but I would just say a couple of things. If you step back and say what kind of business is GE and what kind of business model is GE? You would step back and say key infrastructure. If you look at our power business, you will get transportation, aviation. And you look at long-term installed base, service base recurring revenue base businesses. I step back and look at the healthcare business and say check, check, check, check. So, it’s a key piece of infrastructure. It’s a $7 trillion industry. It’s 10% of global GDP. It’s probably 12% or 13% of market cap. It’s got core long-term growth whether it’s imaging demographics, chronic disease. 6 billion people don’t have access to healthcare coming into the market over time. So I think if you landed from another planet and said what is the key infrastructure component of any country and does it have long-term growth, you would get right to the healthcare and say, that’s a business I want to be in. So, I think it fits from a infrastructure asset perspective. And then I think the business model as I said at the outset looks like a lot of the other GE businesses, high component services, a lot of profitability coming from service. So, I step back and say in some ways I don’t really get why the question comes up too much, because to me it looks pretty clear. I would say in terms of benefits both is going in both ways. We get a lot of research and development collaboration. So algorithms that we use in our machine learning in the imaging business, a lot of that comes from our research center. Advanced materials, this whole thing around additive manufacturing, so we are taking a lot of things, the whole digital platform investment is something we are off on our own. We would have to make major investments that we are able to leverage off at GE. So I think the business grows faster inside GE than outside of GE. And then I think in turn, we share imaging technologies and things that are used in other parts of the business. Our oil and gas businesses and other businesses that are looking for cracks and things use some of the imaging technologies. But I would also say in come back to this emerging market business. This is like a 20% growth business for us. GE’s marched around the world in the last 20 years. Many times, healthcare are the first boots on the ground. If you look at – we have got a $2 billion business in healthcare alone in China. But if you look at GE in China, we have had incredible platform growth there for 20 years in many ways on the backs of healthcare being the first – or one of the first businesses on the ground. So, it is straightforward for me.