Boston: General Electric's [ NYSE: GE] CEO Jeff Immelt is stepping down after seventeen years, John Flannery the president and CEO of GE Healthcare, has been named chairman and CEO
Immelt will remain chairman of the board through his retirement from the company on December 31, 2017. Immelt is 61 and GE’s mandatory retirement age is 65.
In 2015 Immelt announced a move of GE’s suburban Fairfield headquarters to Boston. The majority of GE’s employees however did stay in Connecticut, moving more than 600 employees to Norwalk. GE’s Fairfield suburban campus valued by some at more than $75 million was sold to Sacred Heart University for only $35 million. The GE campus is nearly continguous to the Sacred Heart campus. Scared Heart and GE have had a long standing relationship and former CEO Jack Welch donated heavily to the school and it hosts the Jack Welch College of Business.
While Connecticut Republicans, many in the media including Forbes magazine and much of the Connecticut public blamed Connecticut’s business environment and Governor Dannel Malloy, GE said the move was necessary to bring more energy and creativity to the company. In addition to the Boston move, GE opened up Digital Operation Centers in Atlanta Georgia and Providence, Rhode Island, also citing the need for “creative” environments.
GE has not been alone in relocating to more urban destinations. Weyerhaeuser and McDonalds also joined a movement from suburban campuses for more up-beat and “creative” centers in New York, Chicago, Seattle and Boston. Recently Hartford based Aetna has made a similar decision to relocate the headquarters while leaving the vast majority of employees in Hartford.
Investors didn’t argue with Immelt on the relocation, however many did begin to raise the issue then that maybe Immelt needed to move on himself.
Immelt’s predecessor Welch retired at 65 in 2001 after a 20 year reign, leaving behind a company at the then, top of its game in market value and having diversified into media, financial services and healthcare and retooling the company’s industrial base.
Immlet in part under pressure of changes in media and the collapse of the financial markets, revised GE strategy returning to more attention to its industrial traditions. Huge losses at GE Capital during the financial blowout, took the bloom off the rose of GE’s diversified strategy. and GE Capital its signature profit unit.
With no market value growth during the Immelt years, his leadership has come under increasing scrutiny in the past year.
Forbes magazine ran a major commentary piece on March 27 of this year calling for Immelt’s ouster. Apparently investors and the board finally agreed with the company naysayers.