SEATTLE General Electric Co (GE.N) said it will combine its power and energy distribution businesses to create its largest unit by revenue as the top executive at GE Power announced his retirement after failing to win the conglomerate’s chief executive job.
Steve Bolze, a 24-year GE veteran who heads the GE Power unit, said on Wednesday he was retiring after losing out to John Flannery, chief of GE’s Healthcare division, as the successor to CEO Jeff Immelt.
The retirement of Bolze, 54, is effective July 3.
GE said on Wednesday it will fold its energy connections business into its GE Power unit, and that connections chief Russell Stokes, 45, will lead the combined business, which will keep the name GE Power.
Adding GE’s energy connections business, which provides electric power distribution and conversion equipment, to GE Power will create a unit with $41.9 billion in revenue, based on 2016 results, making it the largest of GE’s units.
Stokes, a 20-year GE veteran, will run a combined unit that accounts for more than 30 percent of GE’s industrial revenue. Stokes previously headed GE’s transportation business and was general manager of GE Aviation’s global sourcing group, which is responsible for purchasing.
Bolze said in a letter to employees that he had told Immelt he would retire after 24 years at GE if he was not chosen to lead the company.
His departure “is an almost unavoidable outcome when there is only one winner for the brass ring,” RBC Capital Markets analyst Deane Dray said in a note to clients. “We do not expect to see much of a stock reaction to this news.”
GE stock was flat in morning trading on the New York Stock Exchange.
The company said it will start reporting results for the combined GE Power unit in the third quarter.
Flannery, who takes over as CEO on Aug. 1, said on Monday after his appointment was announced that he will conduct a swift review of GE’s businesses and will report the results in “the fall.”
He said the review will look at all aspects of GE’s businesses with “no constraint,” but that GE’s strategy of making software-related products central to all of its businesses will not change.
(Reporting by Alwyn Scott; Editing by Chizu Nomiyama and Bill Rigby)