CNBC’s Jim Cramer said on Monday new General Electric CEO Larry Culp is telling everyone that “everything is on the table” to try to revive the fallen industrial giant.
“Everything on the table means I don’t necessarily think he’s going to give away [GE Healthcare] because he understood how great that health-care division is,” Cramer said on “Squawk on the Street.”
Ironically, ousted CEO John Flannery used to run GE Healthcare before taking the top job. In June, Flannery announced a turnaround plan that included a spinoff of the health-care division.
Kieran Murphy, 55, was Flannery’s handpicked successor at GE Healthcare last year. He was tasked with growing the unit as a separate company. GE Healthcare, which had $19 billion in revenue last year, has earned a reliable $3 billion or so per year since 2011.
Shares of GE surged about 15 percent at the Monday open on Wall Street after GE announced the removal of Flannery, 56, as CEO of the entire company, effective immediately. Flannery was only elevated to the helm 14 months ago.
“This is somewhat remarkable because John Flannery just started,” Cramer said. “I do feel bad for John. He was trying to deal with the hand that Jeff Immelt left him. The hand was too hard.”
Flannery succeeded Immelt whose departure capped a rocky 16-year run that saw GE’s stock lose about 38 percent of its value during his tenure.
Flannery’s removal “was not driven by the turbine issue” which came up last week but instead was a reaction “to the slow pace of change, according to CNBC’s Andrew Ross Sorkin said on “Squawk Box,” citing sources.
Culp,55, was added to the GE board in April. He was chief executive of Danaher Corporation from 2000 to 2014.
“Larry Culp has a great record. He was fantastic at Danaher. So I think the company is in better hands,” said Cramer, host of “Mad Money.”
Cramer said that major GE shareholder and activist investor Nelson Peltz told him Monday morning that the CEO change was a “super” move.
In October 2015, Peltz’s Trian Fund Management bought 98.5 million shares of GE that were valued at $2.5 billion at the time.
According to its quarterly 13F filing with the Securities and Exchange Commission, Trian held 70.8 million GE shares as of June 30.
As of Friday’s close, Peltz’s GE stake was worth about $800 million.
