General Electric is pulling out all the stops to calm skittish investors. The latest move, to sell roughly $4 billion worth of its stake in Baker Hughes, was welcome news to investors.
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However, former GE executive Bob Nardelli says the company should have negotiated the deal long-before new CEO Larry Culp, took the reins from John Flannery just last month.
“I would say the Baker Hughes thing is about 15 months too late,” Nardelli said on FOX Business’ “Mornings with Maria” on Wednesday. “I think it’s something John [Flannery] should have done while he was sitting in the chair.”
GE shares rallied on Tuesday, after the stock slipped below the $8 mark for the first time since the financial crisis. Investors are dumping the shares amid concerns about the company’s debt levels. GE slashed its dividend to one penny to conserve cash last month.
On Monday, in an interview with CNBC, Culp said that there is an “urgency” to sell more assets. He also acknowledged that “nobody is happy where GE is today.” The stock has lost half of its value just this year alone.
Culp, the first outsider to run GE in the company’s 126 year history, has only been on the job for roughly 6 weeks after taking over for John Flannery who lasted about 14 months.
Nardelli, who lost the succession battle to Jeff Immelt, is enthusiastic about Culp’s speedy, upfront approach, but is also wary about previous deals made while Flannery was GE’s head of business development, including the $10 billion purchase of power company Alstom.
“I think as we start to you know peel back the Alstom deal, here’s what we are finding: A lot of the deals that they won were deals that… Steve Bolze and GE Power Systems decided not to bid on because they were losers,” said Nardelli. “Now they’ve inherited that through the Alstom deal.”
Nardelli said the acquisition continues to put downward pressure on company.
Bolze stepped down as the head of GE’s power division shortly after losing out to Immelt as CEO.