Company counting on new CEO to save it, says business prof
10/03/2018
Contacts for media: Christine Gillette, 978-934-2209, Christine_Gillette@uml.edu and Nancy Cicco, 978-934-4944, Nancy_Cicco@uml.edu
General Electric is “like a hospital patient bleeding out on the table” that is counting on new chairman and CEO H. Lawrence Culp Jr. to save the patient, according to business strategy expert Scott Latham.
GE this week ousted John Flannery from the role of chairman and CEO after only a little more than a year on the job, opting for Culp, who has been associated with the company only since April when he was named to its board as lead director. With Flannery’s dismissal, GE also announced it will miss its earnings forecast for the year and take a write-down of up to $23 billion on its power business.
Flannery’s initial plan to turn around GE was supported by its board, Latham said, but when it was executed, they were not happy with the “tag sale” approach of selling assets at greatly undervalued prices. Bringing in an outside CEO (Culp served as CEO of Danaher Corp. for more than a decade) allows the company to move more quickly to address issues with various divisions of the company that have caused profits and stock prices to fall. GE has been in the wrong businesses and losing talented employees, Latham said, and now is losing the confidence of its board and investors.
“It’s a recipe for disaster,” Latham said, noting that GE’s financial situation has ramifications for pensions and other retirement funds.
Latham, a professor in the Manning School of Business at UMass Lowell, is an authority on business strategy, growth and turnarounds, and whose private sector experience includes working in business development and marketing for some of the world’s largest companies, including IBM and Hewlett-Packard.
He is available for interviews in person, by phone or ReadyCam, which delivers high-definition video and sound live via Internet.
To arrange an interview or for more on Latham, contact Christine Gillette at Christine_Gillette@uml.edu or 978-934-2209 or Nancy Cicco, at 978-934-4944 or Nancy_Cicco@uml.edu.