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GE retirees reflect on Flannery's ouster

GE retirees reflect on Flannery's ouster

Leadership strategy, pensions, stock price are matters of interest
GE retirees reflect on Flannery's ouster
GE retiree Walter Robb in 2017
Photographer: MARC SCHULTZ/DAILY GAZETTE PHOTOGRAPHER

SCHENECTADY — Walter Robb isn't quite sure what to make of it.

Robb, who was president of GE Healthcare and director of GE Global Research before he retired from the company in 1993, is a bit surprised by Monday morning's announcement that  GE CEO John Flannery has been ousted from the company and replaced by H. Lawrence Culp. Flannery took the job in August 2017, replacing Jeff Immelt.

"I don't know [Flannery], and I don't know what's going on in the company," said Robb, who turned 90 this year and still runs his own consulting company, Vantage Management Inc. "I'm not sure if the new CEO will reverse what [Flannery] was doing. I just don't know enough about what's going on."

When Flannery took over from Immelt last year, his plan included a significant shrinking of the business. It was a strategy supported by Nelson Peltz, head of Trian, an activist investor who was added to GE's board of directors three years ago. That strategy, according to former GE scientist and Coolidge Fellow Larry Lewis, of Glenville, apparently wasn't working.

"From what I could tell, the plan was to break up the company into smaller pieces and divest themselves," said Lewis, who worked at GE for 32 years before retiring in 2013. "But when you're all done doing that, you don't have a lot left. You have to start to wonder. Are the board of directors doing anything? Does this tell us the direction [Flannery] was taking wasn't right?"

"GE Healthcare could be a real hot potato," said Lewis. "There's so much liability involved. I've had some very smart people who tell me, 'don't worry about the pension. It's safe.' But I'm not sure if I believe that."

Also see: Embattled GE ousts CEO, Oct. 1, 2018

Niskayuna's Bill Kornrumpf, an electronics engineer with GE Global Research for 34 years, agreed that Flannery's approach, encouraged by Trian, wasn't the right path for the struggling company.

"He was basically trying to break the company up and sell it into pieces, and that's because he knuckled under to that activist investor," said Kornumpf. "It was going to be a better value for the stockholder. The finance people would make money — the guys who buy and sell. But I don't think GE would have survived heading in that direction. They'd go down just like Westinghouse. I think [Flannery's ouster] is a good move. Flannery was doing a terrible job."

GE Healthcare was to have been spun off from the conglomerate and become a subsidiary, but that hasn't been finalized yet, leaving Robb wondering what's going to happen to the company he created nearly 40 years ago.

"Healthcare is the only one I'm really familiar with, and I have mixed thoughts about it," said Robb. "I wouldn't be that surprised if they decided not to spin it off, but I know he was encouraged to do so. On one hand, I'm excited to see my baby turn into a stand-alone company, but on the other hand, I think it benefits from being a part of GE."

Dale Brown of Niskayuna, a physicist at GE Global Research before he retired in 1997, said new leadership at GE is probably a good idea.

"I don't know [Flannery] and he had only been there a short time, but I read how somebody was saying GE continues to hire people from the inside, and what they should do is go outside the company," said Brown. "Everything is confusing. GE is getting into renewable energy and that's good, but what's happening to the medical systems? I don't understand. Is [GE Healthcare] still part of the company or isn't it?"

Some retirees did not have strong feelings about Flannery's termination but were anxious to talk about the possible affect on the firm's stock.

"We've had such bad management," said Robert Mau Sr., who worked at GE for 39 years before retiring in 1992. "I hope the devil it comes back. I'm the one guy who still has all his stock."

Mau, 83, who lives in East Cobleskill, said he still has faith in the company.

"I'm going to have to wait and see who they put in," he said. "I'm hanging on to my stock because, my God, if I sell it I'm losing a fortune. It's either win or lose. I've gone so far down, I can't afford to get rid of it, really."

Roy King, of Princetown, who retired in 1992 after 35 years on the job, also could not comment on the dismissal. He sees the stock price — it rose Monday — as a possible bargain.

Also see: Embattled GE ousts CEO, Oct. 1, 2018

"If it keeps going down, I may buy more," said King, 82. "Sooner or later, it's got to turn around ... when the blood is running in the streets, that's when I'll buy."

Mary Kuykendall worked in the GE human resources and marketing department for more than three decades beginning in 1960. In 2015, she wrote a book about her career with the company, "Rebuilding the GE House That Jack Welch Blew Down."

"It's tough trying to figure out what is going on with the appointment of Culp to replace Flannery," Kuykendall said. "The GE board reports that it was frustrated with the slow pace of change. Well, people like me are frustrated with their lack of transparency. Are GE pensions and GE debt still being transferred to GE Healthcare, owned by stockholders? Who benefits if they sell the power generation and jet engine units?

"One report says Culp will keep GE Healthcare, another says it may be sold," added Kuykendall. "I hope Culp is not a culprit."

Ray Gillen, chairman of the Schenectady County Metroplex Authority, said he would not comment on General Electric personnel actions.

 

 

 

   
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