The General Electric board's frustration with the slow pace of change at the troubled industrial company led to the ouster of CEO John Flannery, but the problems at the heart of its power business defy a quick solution.
GE on Monday announced it would replace Flannery with former Danaher Corporation CEO Lawrence Culp. The 55-year-old executive now faces the challenge of steering GE through a period of weak demand for its power plant equipment.
At the core of the company's problems is its failure to forecast a downturn in demand for its turbines, the titanic machinery that powers natural gas and coal-fired power plants. That failure left GE with too much capacity in a market that is cooling off amid booming demand for renewable energy.
In its latest quarter, revenues in the power sector fell 19 percent, while profits were down 58 percent. Orders for new equipment were down 26 percent at $7.4 billion.