General Electric’s energy and power distribution businesses will be combined to create the conglomerate’s biggest unit by revenue. This came as the highest-ranked executive at General Electric Power, Steve Bolze, revealed that he was retiring after he failed to succeed the outgoing General Electric CEO, Jeffrey Immelt.
In his bid to become the chief executive officer of General Electric Bolze who had been at General Electric for 24 years lost out to the CEO of GE’s healthcare division John Flannery. The current CEO’s terms ends in two months and Flannery will take over beginning August 1. Flannery is currently reviewing General Electric’s business and this includes medical scanners, locomotives, power plants and jet engines. Regarding GE’s strategy, Flannery has disclosed that the conglomerate will use software to enhance industrial equipment’s value.
Disposing of units
After the review there is a possibility of General Electric’s portfolio being trimmed further. In recent years the conglomerate has disposed of NBCUniversal as well as its appliances and finance divisions. General electric is also said to be planning to dispose of the lighting business which is under the energy connections division.
At GE Power, Bolze will be succeeded by the current chief executive officer of GE Energy Connections, Rusell Stokes who has been with the company for two decades. Before becoming the CEO of GE Energy Connections Stokes was the chief of GE Transportation.
“[Stokes] brings a strong combination of operational, industrial and energy experience to this role, and can now scale his leadership skills,” said Immelt in statement announcing Stokes’ elevation.
Biggest revenue generator
The merger of the division that engages in energy distribution with GE Power will result in a unit that will be generating revenues amounting to approximately $41.9 billion. This will be the biggest unit of the conglomerate as it will make up about 30% of GE’s industrial revenue.
At General Electric, CEOs typically serve for long periods and when a new one is named, a departure of those who lost out normally occurs. In 2001 when Immelt took over, there were prominent departures such as those of Bob Nardelli and Jim McNerney. Nardelli went on to head Chrysler and Home Depot while McNerney went took up the top leadership position at Boeing.
In a letter sent to employees Bolze admitted that he had informed Immelt that he would be leaving in the event that he was not picked as the chief executive officer.