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Jun 27, 2022

GE CEO culp takes reins of aviation unit as Slattery loses top post

Lorne Steinberg discusses General Electric Company

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General Electric Co.’s chairman and chief executive officer will assume responsibility for its jet-engine unit, expanding his role at the soon-to-be independent business as it battles labor and supply-chain challenges in a tumultuous period for commercial aviation.

Larry Culp will take on the additional role of CEO for GE Aviation, effective immediately, while retaining his titles with the parent company, GE said Monday in a statement. The leadership shuffle moves John Slattery, who had been CEO of the world’s largest jet-engine maker since 2020, to the position of chief commercial officer of the business.

Culp said in the statement that “the board and I decided it is the right time for me to take on this expanded role and work even more closely with the team to support our customers, meet the unprecedented demand ramp and prepare for GE Aviation’s future as an independent public company.”

The moves set the top leadership team for what will be GE’s primary remaining business following the spinoffs of GE Healthcare next year and its power-related units in 2024.

GE also named Rahul Ghai, the chief financial officer of elevator manufacturer Otis Worldwide Corp., to the same position at GE Aviation, replacing Shane Wright. Russell Stokes, who heads GE Aviation Services, will run commercial engines and services, GE said.

Taken together, the appointments create a “known and highly regarded” management team, Credit Suisse analyst John Walsh said in a client note.

GE shares were little changed at 11:27 a.m. in New York. The stock fell 29 per cent this year through Friday’s close, worse than the decline in the S&P 500 Index.

 

TURNAROUND EFFORT

It’s the latest in a series of changes that Culp has overseen in his push to rescue the industrial giant from an epic collapse that erased more than US$200 billion in market value. 

Since being named CEO and chairman in 2018, Culp has recruited executives from outside the company to lead key operations, slashed the 130-year-old manufacturer’s mountain of debt, dismantled its troubled financial services business and overseen sweeping changes to fix GE’s manufacturing operations. That culminated in the plan announced in November to break up the once-mighty conglomerate.

Culp takes over the aviation unit -- GE’s top source of profit -- as jet-engine makers contend with supply-chain turmoil and material shortages that have hampered new commercial engine production, with both GE Aviation and Raytheon Technologies Corp. reporting crimped output during the first quarter. 

Engine delays have already begun to slow some aircraft deliveries as planemakers Boeing Co. and Airbus SE plan production increases in the coming years to fulfill strong demand for new jetliners.

Airbus CEO Guillaume Faury last week said that 20 single-aisle jets that were fully built by the end of May were still missing engines, without identifying the supplier in question. Raytheon’s Pratt & Whitney unit and CFM International Inc., GE’s joint venture with France’s Safran SA, both supply engines to the Airbus A320neo family of aircraft.