John Flannery from GE unexpectedly retired as CEO

General Electric, stuck in a deep crisis, ousted CEO John Flannery after barely a year of work.

Flannery was replaced on Monday by Larry Culp, a respected outsider who previously headed the industrial manufacturing company Danaher (DHR). GE has installed Thomas Horton, the former CEO of American Airlines (AAL), as senior director.

GE (GE) was hampered by years of ill-prepared business and unnecessary complexity that preceded Flannery's tenure as CEO. Flannery this year launched a turnaround plan that would narrowly focus on aviation and electricity, but the restructuring failed to inspire investor confidence.

In announcing the changes in leadership, GE has revealed more bad financial news: the conglomerate has warned that its profit for 2018 will "not live up to expectations" because of the "poor performance" of its troubled division.

GE has also warned that a loss of value related to GE Power should be incurred. The company said the fees, which are still being finalized, will likely total nearly $ 23 billion.

"GE remains a fundamentally sound company with great companies and exceptional talent.It is a privilege to be asked to lead this iconic company," said Culp, who joined the board of directors. from GE earlier this year, in a statement. "We will work very hard in the coming weeks to get a superior execution, and we will act urgently."

The stock jumped 14% while Wall Street encouraged the change of direction.

"We hold Mr. Culp in high esteem," given Danaher's "operational and strategic excellence," recently wrote RBC analyst Deane Dray to his clients.

Culp, 55, is behind a recovery at Danaher, which does everything from dental tools to consumer packs. GE said that during Culp's 14-year tenure, Danaher's sales had increased five-fold and the share price had surpassed that of the S & P 500.

In other words, it's exactly the opposite of the situation at GE. Despite the strength of the economy and the booming stock market, GE's share price has fallen by almost two-thirds since the end of 2016. Jeff Immelt, long-time CEO, has been replaced by Flannery, a 30-year veteran of GE, in August 2017.

To repay his debt and relaunch his action, Flannery announced his intention to sell many of GE's businesses, including his century-old railway division, Thomas Edison's light bulb unit, Baker Hughes (BHGE) and the health care unit that manufactures MRI machines.

Power nightmare

GE shares fell by nearly a third this year as investors worried about the company's rising debt and declining profits.

The sale accelerated last month after GE announced the failure of two of its gas turbines, resulting in plant closures. The turbine problem could tarnish GE Power's reputation and hurt sales at a time when it is running out of money.

Under Immelt, GE caused a sensation by acquiring Alstom's $ 9.5 billion business. The 2015 agreement, the largest industrial purchase ever made by GE, pushed the company toward fossil fuels, while renewable energies were stealing market share.

GE, a founding member of the Dow since 1896, was excluded from the exclusive index during the summer. Last week, GE's market value fell below $ 100 billion for the first time since March 2009. In 2004, GE was the most profitable company in America, with a value of nearly $ 400 billion. dollars.

Culp is facing serious challenges as he tries to restore genetic engineering.

In addition to its electrical disaster, GE is conducting a double SEC investigation into its accounting practices and insurance activities. And GE still has a huge financial arm that he is trying to reduce. Part of this venture, the At-Risk Mortgage Credit Unit, is currently under investigation by the Department of Justice. GE could bankrupt it.

GE, like many multinational companies, is also facing the US-China trade war. Analysts warn that GE's financial problems could force the company to reduce its dividend again. GE halved the dividend at the end of last year for only the second time since the Great Depression.

CNNMoney (New York) First published on October 1, 2018: 7h19 ET