GE GE Aerospace

By Thomas Gryta 

IMPERIAL, PA. -- General Electric Co. Chief Executive John Flannery told shareholders he was "keenly aware" of the pain caused by a dividend cut and the troubles of the past year, and said the best way to make amends was to "fix the business."

GE shareholders gathered Wednesday at a company facility here and elected a smaller, revamped board after a difficult year at the industrial conglomerate. Several investors stood up to voice their concerns about the company's direction and leadership. The share price has tumbled more than 50% to $14.

"2017 has been immensely disappointing to those of us on the board, the GE leadership team, employees across the business," said CEO John Flannery, a company veteran who took the reins in August and is working to turn around the maker of everything from jet engines to lightbulbs.

"I strongly feel we have very very good businesses that need to be the center of gravity of the company going forward," Mr. Flannery told the crowd. "It is a lot of change, change is not easy in any organization...the company is going to come out stronger."

A year ago, the company was worth more than twice its current value and former CEO Jeff Immelt was pushing GE as a "digital industrial" company. Now, Mr. Flannery is selling assets and considering new structures for the company, including breaking apart its major divisions.

Some shareholders used the gathering to express their frustration. Several unions and a group of retiree advocates protested outside, including workers from the company's Erie, Pa., locomotive plant and other operations in the Northeast.

GE retiree Bill Freeda spoke at the meeting about "promises broken to tens of million shareholders and retirees." He blamed the company's issues on Mr. Immelt, who retired last summer after 16 years as CEO, and the board of directors. He called for an internal investigation for wrongdoing. He referenced the use of a spare backup plane for the CEO, which the Journal revealed last year.

Mr. Flannery said the board takes such issues seriously and would investigate any evidence of wrongdoing. "It is important for us to distinguish between performance outcomes and misconduct," he said.

Retirees also voiced objections to trimmed benefits and lost savings.

"You have a responsibility to the company but you have a responsibility to what made this company," said GE retiree Ron Flowers. "I understand there was some bad decisions. It wasn't on locomotives. We are still going strong."

As part of its strategic review, GE is preparing for an initial public offering or spinoff of its century old transportation unit, the Journal has reported. The unit manufacturers freight locomotives.

GE holds it shareholder meeting in a different location each year and this year's is in a 125,000-square-foot site off a highway in a recently built industrial park 3 miles from Pittsburgh's airport.

The company setup an overflow tent outside for attendees but ultimately didn't need it as about 225 shareholders entered the meeting. About 450 had registered to attend.

The property is on the site of a former coal mine and now is home to GE's additive manufacturing business, which is essentially 3-D printing with high-strength metal. The division is part of the company's Aviation unit.

Despite the media circus -- with multiple television crews broadcasting live from outside -- there weren't any major issues on the agenda. The most notable was the reauthorizing of KPMG as the auditor, continuing a 109-year streak as the company is facing accounting probes from federal regulators. Two big proxy advisory firms had recommended voting against the ratification of KPMG, but shareholders voted to support it.

Write to Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

April 25, 2018 11:52 ET (15:52 GMT)

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