General Electric’s Steve Bolze, once a leading contender to succeed Jeffrey Immelt as CEO, is leaving the company just days after missing out on the top job.
“Some time ago, Jeff Immelt and I agreed that when the succession process was complete, and if I were not chosen, I would retire from GE and move on,” Bolze, 54, the head of GE Power, said in a note to employees Wednesday. “I cannot tell you how proud and grateful I am to have been considered.”
Bolze’s exit recalls the executive exodus more than 16 years ago when Immelt was chosen to succeed Jack Welch — and raises the question of whether other managers are poised to leave. In naming John Flannery as the next CEO on June 12, Immelt said the transition was being handled “in a different way,” drawing praise from analysts who said the company’s goal was to avoid the disruption of high-profile departures.
While GE has taken steps to avoid losing top talent, Bolze’s departure “has echoes of the ‘brain drain’ debacle of the previous CEO transition in 2000,” Deane Dray, an analyst with RBC Capital Markets, said in a note. Given his age, Bolze may resurface as CEO at another industrial company or go into private equity, Dray said.
Chief Financial Officer Jeff Bornstein, who also was said to be in the running to take over from Immelt, was promoted to vice chair. GE Oil & Gas boss Lorenzo Simonelli, who analysts viewed as another potential successor, will run Baker Hughes after it merges with GE’s crude unit.
In the previous CEO transition, Immelt’s appointment prompted the departure of two high-profile leaders, Jim McNerney and Robert Nardelli. McNerney went on to lead 3M Co. and Boeing Co., while Nardelli helmed Home Depot Inc. and Chrysler.
Russell Stokes, a 20-year GE veteran who runs the energy connections business, will take over as CEO of GE Power on July 3, the Boston-based company said in a statement. The power division, which makes gas turbines, is GE’s largest manufacturing business, with sales last year of $26.8 billion. It recently introduced its H-class turbine, GE’s largest.
A rising star at GE, Stokes, 45, has led the energy connections business the last 18 months and previously ran the locomotives unit. He “brings a strong combination of operational, industrial and energy experience to this role, and can now scale his leadership skills,” Immelt said in the statement.
GE said it will combine the power and energy connections businesses into a single division in the third quarter. The $15.1 billion energy connections unit prepares to divest the iconic light-bulb operations. The company said last week that it is starting talks with potential buyers for GE Lighting.