Immelt Leaves a Very Different GE Than He Inherited

By Thomas Gryta and Austen Hufford Features Dow Jones Newswires

Jeff Immelt will leave General Electric Co. looking a lot different than it did when he took the helm in 2001: He estimates he sold two-thirds of the company he inherited.

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He shed its plastics, media and its appliances business. He shrunk its once massive GE Capital finance operations and refocused the company on making jet engines and other heavy machinery.

"You could never have predicted the environment of the last 16 years," Mr. Immelt said to employees in a town hall meeting Monday morning. He became choked up as he thanked his team and highlighted some of the challenges he faced over his time, including the terrorist attacks of 9/11 and the financial crisis.

Mr. Immelt came to GE in 1982, the same year as getting an M.B.A. from Harvard. In his career, he spent time in the Plastics, Appliances, and Healthcare businesses. Like his successor, John Flannery, Mr. Immelt was promoted to CEO after running the Healthcare division.

Mr. Immelt had a tough CEO act to follow in Jack Welch, an empire builder who delivered steady profit growth and sent GE's shares soaring during the 1990s. Four days after Mr. Immelt took charge in 2001, the Sept. 11 attacks flattened GE's aviation business. Later, the financial crisis turned its giant banking business into a liability, forcing GE to cut its dividend for the first time since the Great Depression.

Mr. Immelt ultimately sold NBCUniversal because it distracted from GE's core mission and he exited the insurance industry in 2005. He bought industrial businesses such as Enron Corp.'s wind-power division and life-sciences firm Amersham PLC. He made major investments to serve oil and gas drillers but was criticized by some for paying up at the peaks of that market.

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His moves resulted in a reshaping of the company's workforce -- with the number of GE workers abroad increasing while the number of employees in the U.S. declined.

The end of his career as CEO came under President Donald Trump and a push against globalization. Mr. Immelt has walked a careful line by defending global trade and the Paris Accord on climate change.

Mr. Immelt bought and sold more than $100 billion worth of business in his time as CEO but said in a letter to investors this year that the "GE portfolio is pretty well set."

Mr. Flannery, in a meeting for employees Monday, made it clear that he would be conducting his own review. "I want to start with a fresh look around the company overall," he said. "I want to go through a deep review with a sense of urgency."

On Monday, investors cheered the news of Mr. Immelt's departure, sending shares up 3.9%. During his tenure, the company's stock price and total shareholder return both lagged behind the performance of the benchmark S&P 500 index.

Write to Thomas Gryta at thomas.gryta@wsj.com and Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

June 12, 2017 13:51 ET (17:51 GMT)