GE Retiree Returns to Company to Boost New Power Unit
(Bloomberg) -- General Electric Co. is bringing back a retired executive to help turn around its struggling power business.
John Rice, 63, has been named chairman of GE’s Gas Power business, which includes gas power systems and power services, the company said in a statement Monday. The appointment adds more depth to the management team of GE’s biggest problem area as newly named Chief Executive Officer Larry Culp implements a broader restructuring of the unit.
Culp, who came on board Oct. 1 pledging to speed up the company’s turnaround, said last week that power is “getting close” to hitting rock bottom as it wrestles with slumping demand and prices.
The leadership shuffle at the unit is “another sign of the laser focus Culp is putting on this business,” said Bloomberg Intelligence analyst Karen Ubelhart. While the chairman position is often advisory, she doesn’t expect that to be the case with Rice. “I would expect him to be hands on,” she said.
To complete the new team, Scott Strazik will become CEO of Gas Power, leaving his role as president of Power Services. Russell Stokes, who has been CEO of GE Power, will be chief of the GE Power Portfolio, which includes steam, grid solutions and the nuclear power conversion businesses.
Rice retired as vice chairman of GE a year ago as part of a wave of departures following a management overhaul that’s installed two new CEO’s of the Boston-based company in less than two years. In his previous tenure, Rice was the company’s primary international officer and led the energy and transportation segments. After a 39 year-career at GE, he walked away with a $7.88 million payout.
Culp is aiming to bolster an executive team that’s relatively low on experience with the power business, said Joshua Aguilar, an analyst at Morningstar Investment Service.
“Clearly, he needed to bring in some sort of expert,” especially since Culp’s prior job as CEO of Danaher Corp. was focused more heavily on health care, Aguilar said.
The broad market slump hitting GE’s power division has been exacerbated by its ill-timed 2015 acquisition of Alstom SA’s energy unit for $10 billion. More recently, GE disclosed that its flagship gas turbines were suffering from an oxidation issue.
“One of my top priorities is positioning our businesses to win, starting with GE Power,” Culp said in the statement.
GE rose 0.4 percent to $8.06 at 12:41 p.m. in New York. The company has lost more than $200 billion in market value so far this year.
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