Posted on 05/25/2018 9:03:43 AM PDT by SeekAndFind
It’s a bad day for a CEO when he announces he’s retiring and the stock goes up. That was Jeff Immelt’s day on June 12, 2017. The news of his departure was in one sense no surprise—some investors and analysts had been urging his ouster for years;but it was also a shock.
He’d been General Electric’s CEO for almost 16 years, and outsiders were unaware of any specific succession plans or that Immelt, at age 61, had any intention of stepping down. Suddenly they were told that in just seven weeks he’d be gone as CEO (he remained nonexecutive board chairman an additional two months), to be succeeded by John Flannery, head of GE’s health care business and 30-year employee. Investors didn’t need long to decide this was good news. The market was flat that day, but they bid GE stock up 4%.
Their optimism was at best premature. The stock closed at $28.94 on June 12 and has not reached that price since. As economies boomed worldwide and U.S. stock indexes soared, GE has collapsed in a meltdown that has destroyed well over $100 billion of shareholder wealth. Pounded by a nonstop barrage of bad news, investors are traumatized and disoriented. “They just can’t figure it out and don’t want to invest,” says analyst Nicholas Heymann of William Blair & Co. “This isn’t like surveying the landscape. It’s spelunking with no lights and no manual.” Analyst Scott Davis of Melius Research says some investors have become permanently disillusioned: “Many have told us they will never own GE again.”
Retirees and employees who bought heavily into the stock are furious; some picketed GE’s annual meeting in April. Former executives are dumbfounded. “It’s unfathomable,” says one. “You couldn’t possibly dream this up. It’s crazy.” After all, this is GE, corporate aristocrat,
(Excerpt) Read more at fortune.com ...
Tesla from the grave.
“GE’s model is nuts. Firing bottom 10% every year, then hiring them back as consultants.”
I’ve seen the ranking system eliminate some very good people who were not good at office politics. The schmoozers did well, especially if they were in a protected class. In the 90’s it normally took a lot of merit to hold on or advance, became much more “political” after Welch retired. Welch had a great internal training system that developed leadership such that as he prepared to retire there were 3 main contenders - the two “losers” going on to head Boeing and Home Depot. Lots of talent at all levels have left GE for better positions elsewhere when they didn’t fit the political model, and GE has paid the price.
Obama pretty much made GE a government run corporation.
That’s Fascism right there.
Some folks still don’t see Fascism as a Left-wing ideology, but it is. Those sweet little Progressives? They’re Fascists.
Yeah, Bob Nardelli was not a good fit for Home Depot.
GE makes junk appliances.
I’ll never again own anything from GE.
“to be succeeded by John Flannery, head of GE’s health care business”
Health care business?
Strong supporters of Obama and the Democrat machine
They backed the wrong horse
Hey Immelt happens.
5.56mm
Thanks for the reminder. I just bought some GE put options.
GE appliances were bought by Qingdao Haier Co. Ltd. in 2016, after the attempted sale to Electrolux in 2014 was blocked by US government due to anti-trust issues.
Medical equipment, MRIs, X-rays, etc.
It was because of that purchase that I was able to retire early.
RE: Hey Immelt happens.
One business term that could be used for companies that are like GE is ‘Immeltdown’ :)
Planned obsolescence
GE laid me off, along with everyone else in my office, so they could move our whole division to India. Why should any American consumer have any brand loyalty to a company that has no loyalty to the American worker?
I support a GE site and they have a guy who is about to leave. Got a gig with the Air Force to be a C-17 pilot.
I don't know of any consumer goods that GE makes in the USA..
” Firing bottom 10% every year, then hiring them back as consultants.”
That’s the IBM model too. Wonder if it has anything to do with an Ivy League business education?
:) Good one.!
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