Former GE vice chair over turnaround: Jeff Immelt should arrive forward and describe 2 Hours Ago | 04:20
Tuesday was the “worst day of my organization life,” former General Electric powered vice chairman Bob Wright told CNBC, soon after shares plunged for the next moment in a row.
However, he doesn’t plan on selling the stock nowadays.
“I’ll trust the background of this company, the quality of the persons that is there,” he said in an interview with “Closing Bell” on Tuesday. “They simply need to be granted a chance to lead.”
Shares of GE closed at 17.90 on Tuesday, straight down 5.9 percent. On Monday, the stock acquired its worst moment since 2009, falling 7 percent following the firm chopped its dividend by 50 percent and declared a sweeping restructuring strategy.
GE’s new CEO, John Flannery, said Tuesday he wasn’t surprised by the stock’s reaction, informing CNBC, “We’ve a long-term plan. We’ve a lot of work to do.”
GE plans to give attention to healthcare, aviation and energy, becoming a “more focused professional company,” Flannery said Monday in announcing the plans.
Wright said he’d like to start to see the turnaround happen a little quicker than has been suggested but called the remaining assets “extraordinarily great businesses.”
He also said he wants Flannery will be a little more transparent about the balance sheet, which he called a good “lurking issue.”
“You can simply say ‘I’ve looked at the balance sheet. I’ve been through the resources and liabilities and we’re OK.’ That could help a lot,” he said.
Michael Useem, a good Wharton professor and director of the school’s Center for Leadership and Transformation Management, said Flannery’s work will likely be extremely difficult.
“A remake of this scale … it’s like turning a good battleship. It’s going to take some serious time,” he said in an interview with “Power Lunch time.”
“With a tough-minded executive in charge that can be done it and the betting is probably going to become on Flannery carrying it out,” he added.
While investors have already been fleeing the inventory over the last couple of days, Useem said many big holders of the inventory include investment firms such as for example Vanguard and BlackRock.
Flannery’s challenge is to hold them in the inventory even while he executes the turnaround, he said.
“For that, the strategy story will likely be essential,” he said.
– CNBC’s Berkeley Lovelace contributed to the report.