John Flannery has been GE’s Mr. Fix-it for a few years now. During a career that has taken him from Latin America to Asia and then back to the U.S., Flannery has been leaned on by management to goose profits at struggling units, expand internationally and engineer acquisitions. Now, at age 55 and newly anointed CEO, he faces the biggest fix-it challenge yet: bolstering General Electric Co.’s overall profits and turning around a stock that has languished for much of the 16-year tenure of his predecessor, Jeffrey Immelt. On day one, Wall Street seemed happy with Flannery’s selection. GE’s stock soared the most in more than a year and a half as he signaled that each and every company unit was subject to scrutiny, promising investors to act “with speed and with urgency and with no constraint.’’ “Investors want visibility and confidence in the future cash flows and competitive position of the company, that’s what translates into a higher stock price,’’ Flannery said in an interview. “Our focus is running the company for cash and growth.’’
GE advanced 3.8 percent to $29.01 at 3:49 p.m. in New York after earlier climbing as much as 5.5 percent for the biggest intraday gain since October 2015.
Flannery most recently showed off his ability to turn around a business as head of GE’s health-care business, which makes diagnostic imaging machines. Taking over in 2014, he boosted sales and profits, and last year achieved double the margin gains he promised.
With a bachelor’s degree in finance and a Wharton MBA, perhaps it’s no surprise he’s been adept at whipping balance sheets into shape. For the first 10 years of his three-decade GE career, Flannery worked in GE Capital’s Stamford, Connecticut, office before being sent to Argentina in 1997 to help the Latin American operations. He also spent time in Japan and India.
Flannery engineered GE’s biggest-ever acquisition — the $10 billion deal for Alstom SA’s energy business — while he headed the company’s M&A during the active 2013-2014 period.
“If you go through the assignments I’ve had, and I say this in all modesty, there have been results,” he said. “I spent a lot of time making investments and assessing investments. I’ve operated large businesses in industrial financial services, global businesses.”
Immelt said he’s been planning for several years to step down around now, regardless of shareholder sentiment. “We ended up in exactly the right place,” the outgoing CEO said in an interview. Past GE leaders have tended to have lengthy experience on the manufacturing side of the business. Flannery, by contrast, has spent most of his career in finance jobs. Flannery is “a lifer, but he’s kind of an outsider because he’s a GE Capital guy,” said Scott Davis, a Barclays Plc analyst who has covered GE for more than a decade.
The new CEO beat out colleagues such as Steve Bolze, the CEO of GE Power, and Jeff Bornstein, GE’s chief financial officer. Flannery got the news last Friday in a call from Immelt. He didn’t have time to celebrate except for watching a few snippets of a baseball game. “He’s a say-what-he-means kind of guy,” Davis said. “He’s not a bigger-than-life personality like Jack Welch was or Jeff Immelt was. He’s very understated.”
Flannery, a married father of three, has at least one thing on his side as he prepares to move into the CEO’s office at GE’s new headquarters in Boston. He’s already a Red Sox fan.