Immelt Out, Flannery Next in Line at GE

Jeff Immelt at a Chief Executive Group event at the New York Stock Exchange

General Electric CEO and chairman Jeff Immelt today announced he will step down as CEO on Aug. 1, with current president and CEO of GE Healthcare John Flannery set to take the reigns at that time. Immelt will continue as chairman through the end of the year.

Immelt, 61, has held the CEO position for the past 16 years, overseeing GE’s transformation into a global high-tech industrial innovation company, and withdrawing the company almost entirely from financial services and media while focusing more on jet engines, gas turbines and medical technology. Immelt also oversaw recent downsizing efforts as GE shares have dropped more than 11% over the past last year, in addition to the recent relocation of its headquarters to Boston from Fairfield, CT.

GE’s board has been transparent in its long-term plans to move forward with a new CEO, beginning the succession planning process in 2011. By 2013, GE’s board had decided that it should name a new CEO by summer 2017, and selected Flannery on June 9 after interviewing potential candidates in early May.

“We’ve been calling for A breakup of GE, and we would expect the new CEO to consider something down that path.”

A new tenant in the CEO’s office could pave the way for bigger changes at GE, according to Barclays managing director Scott Davis.

“We’ve been long calling for an AT&T-style breakup of GE, and we would expect the new CEO to consider something down that path,” Davis told CNBC. Davis believes that a change in direction for the conglomerate will be on the way once Flannery formally assumes his new role at GE.

“If you’re a new CEO, and you come out of a portfolio review and don’t do anything, that would be a statement. We’re expecting fairly dramatic changes,” he said.

Immelt stated that he believes Flannery has the attributes and experience necessary to lead GE into the future.

“John is the right person to lead GE today,” Immelt told USA Today. “He has broad experience across multiple businesses, cycles and geographies. He has a track record of success and led one of our most essential businesses. Most important are his strong leadership traits—good judgment, resilience, a learner, team builder and a tough-minded individual and competitor.”