Meet the Next CEO of General Electric: John Flannery -- 2nd Update
John Flannery, the new leader of General Electric Co., brings to the corner suite a professional past that is more akin to a private-equity executive than an industrial operator.
The son of a bank executive, Mr. Flannery joined GE Capital in 1987 and worked around the globe cutting deals buying and selling portfolios of undervalued assets. The Wharton M.B.A. made his mark leading the $17 billion acquisition of Alstom SA's power business, the biggest industrial acquisition in the company's history.
Despite his financial background and long tenure at GE, Mr. Flannery has shown a willingness to break ranks.
At GE's annual management retreat in Boca Raton, Fla., where the top leaders of the company meet and discuss the business, Mr. Flannery stunned the crowd by abandoning the standard PowerPoint in his 2015 presentation, said people familiar with the matter. "That takes guts because there are 600 people in the room," one of the people said.
One of four internal contenders to succeed Jeff Immelt for the top job, Mr. Flannery became the board's final pick based on his broad GE experience and inclusive leadership style, said another person familiar with the matter.
Mr. Flannery "is willing to contemplate significant change. He is quite bold in his thinking," said Shelly Lazarus, a longtime GE director. "He can cast a cold eye even though he is a very warm person."
That was evident when Mr. Flannery took charge of GE's business development team in 2013 and insisted on reviewing whether the company should stick with its then assortment of business. "All of a sudden, everything was on the table," Ms. Lazarus said.
Mr. Flannery was born in Alexandria, Va., and lived there for the first 10 years of his life with his two older sisters. His father worked for the FDIC Corp. In 1971, Mr. Flannery moved to West Hartford, Conn., where his father was president of a small bank. He graduated from Fairfield University before going to business school at the University of Pennsylvania.
Like Mr. Immelt, he is a devoted Allman Brothers fan going to some of the rock group's final concerts. He is a voracious reader of fiction and nonfiction by authors including Atul Gawande and J.D. Vance.
He started working abroad for GE Capital in 1997 in Latin America and moved to Asia in 2005. He took a risk in 2009 by moving to India where he ran the company's first separate profit-and-loss statement for a country.
After leaving India, he joined GE's corporate headquarters team in 2013 where he ran mergers and acquisitions and showed a willingness to part with assets.
As head of strategic planning, Mr. Flannery pushed to exit the underperforming appliances unit, despite its long history inside GE, one person familiar with the matter said. Even though the business had been struggling for years, the company's earlier deal makers hadn't made the call to sell the business until Mr. Flannery took the job and Mr. Immelt agreed with him, the person said.
Mr. Flannery was also instrumental in the Alstom deal, arguing the asset would be valuable to GE despite concerns about operating in France and improvements needed in the business, the person said. He negotiated directly with the now French President Emmanuel Macron, who was economy minister at the time, in a deal that involved contentious negotiations, another person familiar with the matter said.
On Mr. Flannery's watch as head of GE's mergers and acquisitions team, he led the spinoff of its consumer credit business, Synchrony Financial, and eventually sold its appliance business to a Chinese rival after a deal with Electrolux was scuttled.
He stepped in to lead the health-care business in 2014 when the unit was struggling and some analysts called for GE to spin it off or sell it. Instead, Mr. Flannery and GE have doubled down. The unit, which makes imaging and diagnostic equipment, has been expanding into life sciences. GE Healthcare's revenue rose to $18.29 billion in 2016, back to levels it sustained in the beginning of the decade, while increasing operating profits.
But Mr. Flannery will face different decisions than Mr. Immelt initially did when he took over the company in 2001 from Jack Welch, who had built up the conglomerate's media and financial business.
Mr. Flannery faces calls for accelerated cost cuts and must complete a corporate transformation begun by Mr. Immelt. "Jeff created the big apple," the first knowledgeable person said. "Now is time for John to polish it."
--David Benoit contributed to this article.
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(END) Dow Jones Newswires
June 12, 2017 16:49 ET (20:49 GMT)