GE boss urges investors to look past troubles

Bloomberg

General Electric Co.’s boss wants investors to know that all the negative headlines dogging the manufacturer don’t tell the whole story.
The company is already changing for the better after “a very tough year,” CEO John Flannery plans to say in an upcoming letter to shareholders. GE is rethinking its structure, cutting costs and enhancing management accountability. It’s also following through on a pledge to overhaul its board, with the nomination on Monday of an accounting expert and two former industrial CEOs.
Flannery is using the shareholder letter to lay out a path forward and push back against Wall Street analysts and the media for dwelling on past failures. He’s fighting an uphill battle. GE is once again posting the year’s biggest decline on the Dow Jones Industrial Average after taking a $6.2 billion charge from an old insurance portfolio and disclosing a US Securities and Exchange Commission investigation into its finances.
“How the company is being portrayed in certain quarters is overwrought and, in most cases, does not reflect the reality of GE that our customers and employees are seeing around the world,” Flannery says in the letter.
“There are things we need to fix. But we can. We know how to. And we will.”
GE rose less than 1 percent to $14.56 ahead of regular trading in New York. The shares tumbled 17 percent this year through February 23, the biggest drop on the Dow Jones.
The company was also the biggest laggard on the stock gauge last year, falling 45 percent.
One area already being addressed is the board, which Flannery had said he’d shrink to 12 members.
GE said in a separate statement that it would nominate Leslie Seidman, who served as chairman of the Financial Accounting Standards Board, as a director along with ex-Danaher Corp. CEO Larry Culp and former American Airlines CEO Thomas Horton.
The company also announced the departure of eight current directors. GE’s annual shareholder meeting is scheduled for April 25.