Bob Nardelli, once a contender for the General Electric CEO (NYSE:GE) spot that went to Jeff Immelt, says the 125-year old company’s demise is “heart breaking” and is urging fast action by the company’s new leadership.
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“John [Flannery} has a big challenge with cash generation, he should be taking inventory of every non-earning asset in the company,” said Nardelli, former CEO of GE Power Systems, during an interview on FOX Business Network’s ‘Mornings With Maria’.
He added that even though GE would likely take a paper hit, in earnings per share, by selling assets, that Flannery should be selling non-cash generating assets such as idle factories and idle equipment as quickly as possible.
Nardelli, who left for Home Depot (NYSE:HD) after being passed over by former CEO Jack Welch in favor or Immelt, is very sympathetic about the challenge that Flannery faces, saying that it is beyond anything that he would have predicted.
Flannery took over as GE’s CEO in August and since then has been dealt numerous financial and leadership setbacks.
“John has a herculean challenge, and he’s playing in the SuperBowl with an entirely new team … He has huge debt an unfunded pension and a dividend, which, maybe he should have taken completely out,” Nardelli added.
As previously reported by FOX Business, GE announced earlier this week that it would take a much larger-than-expected charge, $6.2 billion, in GE Capital. This sparked renewed talk of a breakup.
On Tuesday, talking about the write-down and the ongoing examination of GE’s business, Flannery stated, “There could be different structures, we need to examine those….They could result in many different permutations including separately trading assets in any one of our units if that is what makes sense.”
While Flannery has a huge task ahead of him to turnaround GE, Nardelli is no longer a GE shareholder. “You sold all of your stock?” Bartiromo asked Nardelli. “I did – I kept it for a long time – I voted with my heart, and I kept it – then, I voted with my head,” he said.
GE shares have lost 44% over the past 12-months and are trading in the $17 range.