AUDIE CORNISH, HOST:
For 16 years, Jeffrey Immelt has led General Electric while the sprawling conglomerate sold off one business after another in order to refocus. Today the company announced that Immelt, who is 61 years old, will step down later this summer. NPR's Yuki Noguchi reports he's a well-regarded CEO even though he wasn't able to do much for shareholders.
YUKI NOGUCHI, BYLINE: In retrospect, Jeff Immelt's first days as CEO were indicative of his whole tenure. Immelt had grown up a company man. His father had worked at GE, and Immelt himself had worked there for two decades by September 2001, when he took the reins from the legendary Jack Welch.
DAVID MAGEE: And then 9/11 happens - boom.
NOGUCHI: David Magee is the author of a 2009 book about Immelt. He says Immelt will best be remembered for weathering tumultuous times. That includes the financial crisis and its aftermath, when GE's finance arm was so entwined in the mortgage crisis that it posed an existential threat to the company. Magee recalls meeting with Immelt and other GE executives in late 2008.
MAGEE: And you could see that in their faces. And it was that bleak because they were so exposed.
NOGUCHI: Immelt stabilized GE, eventually spinning off its GE capital unit and other assets. Immelt's work did not pay off for investors, however. GE's stock price is still well below where it was when he took over from Welch, a Wall Street star. Magee says GE's underperforming stock prompted activist investors to push for change.
MAGEE: He will not be remembered for (laughter) the things that Jack Welch was remembered for, which is high shareholder returns.
NOGUCHI: However, says Wharton Business School professor Michael Useem, Immelt gets credit for revamping GE.
MICHAEL USEEM: He, over the last 16 years, has really transformed the company from what it was, spun off a number of operations, including NBC television, the home appliances division, cut back on the involvement in banking.
NOGUCHI: Today it is focused more on its core industrial operations and health care. In a meeting today with employees, Immelt acknowledged he's long known GE would need a new leader.
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JEFFREY IMMELT: This is the right moment of change. Four or five years ago, we thought the summer of '17 was the right moment in time. Sixteen years is a long time.
NOGUCHI: Replacing him is John Flannery, himself a 30-year GE veteran and current head of its health care division. For most of his career, Flannery worked in GE's international finance operations. In that role during the financial crisis, Immelt says he saw Flannery demonstrate his survival skills.
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IMMELT: He was in a really tough cycle. He spent a long time in my dog house during those days.
(LAUGHTER)
IMMELT: I got a chance to see how resilient John is.
NOGUCHI: Flannery returned the praise.
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JOHN FLANNERY: Those are big, big shoes to fill.
NOGUCHI: Flannery says Immelt was far ahead of his time in seeing where the business was headed and helped reshape GE so it's better poised for the future. Immelt steps down as CEO on August 1 and from the board of directors at the end of the year. Yuki Noguchi, NPR News, Washington.
(SOUNDBITE OF BESTIE SONG, "BAE") Transcript provided by NPR, Copyright NPR.
