GE CEO Culp expands role as head of aviation unit

General Electric Co. CEO Larry Culp mingles with shareholders during the company’s annual meeting in Tarrytown, New York, U.S., May 8, 2019. REUTERS/Alwyn Scott/File Photo

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June 27 (Reuters) – General Electric Co (GE.N) said on Monday chief executive Larry Culp will also lead its aviation unit from today, replacing John Slattery, as the industrial conglomerate preparing to split into three public companies.

Slattery, who has headed the company’s jet engine unit since September 2020, will become the unit’s chief commercial officer.

GE has also named Rahul Ghai, a senior executive at Otis Worldwide Corp (OTIS.N), as chief financial officer of GE Aviation. Ghai played a key role in steering Otis after his split from United Technologies in 2020.

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GE plans to spin off its healthcare business into a separate, publicly traded company next year. It would combine its electricity and renewable energy units, and spin off that operation in 2024. After the split, it will become an aviation company, led by Culp.

Credit Suisse analyst John Walsh said the management change had created a “known and highly regarded” management team within the jet engine unit, which is also GE’s cash cow.

As the company’s aerospace business grapples with a lingering supply chain and labor shortages, GE expects it to post revenue growth of at least 20% this year thanks to a recovery of the global airline industry after the crisis caused by the pandemic.

Shares of GE fell 1.3% to $66.15 in afternoon trading.

QUEST FOR CLARITY

Nicholas Heymann, an analyst at William Blair, believes the leadership changes are aimed at dispelling any ambiguity surrounding the aviation unit’s management structure as it tries to attract “really good” independent directors to its board of directors. ‘administration.

“They need to know who will lead each company’s management team before signing up,” Heymann said.

The quest for clarity echoes Dave Calhoun’s recent decision to cement his long-term position as Boeing’s chief executive.

Some industry sources said the Irish-born Slattery’s position may also have been clouded by his lack of US citizenship as he awaits a US passport. GE is a major supplier to the Pentagon.

GE did not respond to a request for comment.

In his new role, Slattery, an industry high-flyer who ran the civilian unit of Brazil’s Embraer before the planned collapse of the regional planemaker’s takeover by Boeing in 2020, will tackle the multidimensional chess game of jet engine strategy.

Engine and aircraft manufacturers are involved in the early stages of a mating game that will define air travel for decades as aircraft manufacturers consider what kind of propulsion will be needed for the next generation of medium-range jets. in the 2030s.

GE and its French partner Safran (SAF.PA) plan to test building an open-bladed jet engine called “RISE” which it says can reduce fuel consumption and emissions by 20%. Read more

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Reporting by Rajesh Kumar Singh in Chicago, Tim Hepher in Paris and Abhijith Ganapavaram in Bengaluru; Editing by Arun Koyyur and Nick Zieminski

Our standards: The Thomson Reuters Trust Principles.

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