General Electric Co (GE.N) ousted Chief Executive Officer John Flannery in a surprise move on Monday, replacing him with outsider and board member Larry Culp, and said it would take a roughly $23-billion charge to write off goodwill in its power division, primarily from a large 2015 acquisition.
GE also announced its cash-flow and earnings per share would be less than previously indicated, because of problems at its GE Power division.
GE said the power division's goodwill balance is about $23 billion and the impairment charge would eliminate most of it.
The company has also appointed former American Airlines chief executive Thomas Horton as lead director on its board.
One thing that may not have endeared Flannery to its board was his inability to get investors to buy into his plans to right the ship.
'We remain committed to strengthening the balance sheet including de-leveraging'.
The shares climbed 8.2 percent to $12.22 in NY premarket trading Monday.
The restructuring has had little positive impact on General Electric shares.
The company was booted from the Dow Jones Industrial Average this summer and last month, shares tumbled to a nine-year low after revealing that its marquee gas turbine was flawed, an "oxidation issue" forcing the shutdown of a pair of power plants where they were in use. "It is a privilege to lead this iconic company".
Flannery will be replaced by H. Lawrence (Larry) Culp, Jr. Culp said in a statement, "We have a lot of work ahead of us to unlock the value of GE". He has already pledged to sell or spin off longtime GE businesses including transportation, health care and lighting while focusing on power equipment, renewable energy and jet engines. We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency. The company was also forced to cut its dividend in half and uncovered massive insurance-related losses under Flannery's watch, as the company struggled to transform its focus.