New G.E. Chief Shakes Up Management Team

Published on Oct 07 2017 - - World - -

General Electric announced on Friday the departure of three senior executives, a further sign that John L. Flannery, the company’s new chief executive, is moving quickly to chart a different course from that of his predecessor, Jeffrey R. Immelt.

The departing executives were senior members of Mr. Immelt’s team. Two of the three, analysts say, were not surprising given their ages and the pattern of most chief executives to make management changes after assuming control.

The most striking move, they say, is the departure of Jeffrey S. Bornstein, vice chairman and chief financial officer. Mr. Bornstein, 51, was regarded as a potential successor to Mr. Immelt. After Mr. Flannery was chosen as the chief executive in June, G.E. said he and Mr. Bornstein would work closely in the transition and Mr. Bornstein was given extra financial incentives to remain with the company.

But Mr. Bornstein was G.E.’s top finance executive under Mr. Immelt. And the criticism by activist investors who lobbied for change, helping nudge Mr. Immelt into retirement earlier than expected, was that G.E. should have cut costs more aggressively and spent less on new initiatives, like a building up G.E. software business.

The strategy was Mr. Immelt’s, but Mr. Bornstein held the purse strings. “Jeff Bornstein was Immelt’s guy and he lost out in the succession race to John Flannery,” said Scott Davis, chief executive of Melius Research, an independent financial analysis firm. “Flannery wants new guys, new faces and not someone tied to profit performance that fell short.”

In the statement announcing his departure, Mr. Bornstein said, “As John evaluates the strategy for G.E. and puts his leadership team in place, he and I have concluded that this is the right time to bring in a new C.F.O. with a fresh perspective.”

G.E.’s new chief financial officer will be Jamie S. Miller, starting in November. She has been head of the company’s transportation business.

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The announcement of the executive departures came after the close of the market, and G.E.’s stock price slipped slightly, less than 1 percent, in after-hours trading.

G.E. will release its third-quarter results later this month, and Mr. Flannery is scheduled to present his strategy for the company to Wall Street analysts in November.

The two other departing executives are John G. Rice and Beth Comstock.

Mr. Rice, 60, was in charge of G.E. international expansion efforts, known as the global growth organization. He has been at G.E. for 39 years, and will retire at the end of this year.

Ms. Comstock, 57, oversaw the company’s business innovations unit, running G.E.’s venture investment arm as well as operations including sales, marketing and communications. Ms. Comstock, too, will retire at the end of this year.

Mr. Bornstein, a 28-year G.E. employee, will also leave the company at the end of the year.

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