“[Immelt] came in, in an aura of a coronation. This big thing, he’s succeeding Jack Welch,” Langone said on “Squawk Box,” though he admitted he had voted for Immelt to succeed Welch. “On paper, [Immelt] looked fabulous. He really did and you can’t take that away from him. Look at the success he had at GE” before he became CEO.
But the idea that “GE was transformed” after Welch was really a “synonym for destruction,” Langone contended, adding he believes there’s a good chance that GE will be “busted up.”
Langone said GE may be a case in which an activist investor might be able to make a difference. Billionaire Trian Partners boss Nelson Peltz, a major GE shareholder, is pushing for changes. Ed Garden, a founding partner of Trian, may be the vehicle as a GE board member.
GE, with new CEO John Flannery, is in the midst of a major restructuring effort. Three new directors were nominated this week. Adding insult to injury, shares of GE briefly fell below $14 each on Monday after news late Friday that the Justice Department could take action in connection with alleged subprime mortgage violations. On Friday, GE also said it will restate earnings for 2016 and 2017 as it adopts a new accounting standard.
Immelt, who served in various other leadership roles at GE before CEO, led the company for 16 years until the latter half of 2017. During his tenure, the stock lost about 38 percent of its value. Immelt came under fire from critics over leadership decisions that left GE cash-strapped. On his way out the door, Immelt found himself defending the company’s practice of having an empty business jet follow his corporate plane on several trips around the world.