General Electric (NYSE:GE)
Historical Stock Chart
3 Months : From Nov 2019 to Feb 2020
By Thomas Gryta
General Electric Co. said it hired an executive at A.P. Moeller-Maersk A/S as its next chief financial officer, tapping another outsider to help the American conglomerate turn around its operations.
Carolina Dybeck Happe, who has been the Danish shipping giant's finance chief less than a year, will join GE in early 2020. Previously, she spent 16 years at Assa Abloy AB, a Swedish maker of door locks. She succeeds Jamie Miller, who had been GE's CFO for about two years and will leave the company after the transition.
GE CEO Larry Culp, the first outsider to run the conglomerate, said in July he was looking to hire a new finance chief. The company is trying to turn around its business after two difficult years that forced it to slash its dividend and shed businesses.
The CFO change comes while GE's accounting practices are under investigation by the Justice Department and the Securities and Exchange Commission. GE is also considering switching its auditor, after working with KPMG LLP for more than a century.
Ms. Dybeck Happe is "a proven global CFO who knows how to deliver results and create value," Mr. Culp said in an interview. He praised her performance at Assa Abloy, which he said delivered strong shareholder returns with a small central management team and decentralized structure. "That is the frame that would work well with us at GE," he said.
The GE boss said he had never met Ms. Dybeck Happe until the search process, which he said had been his priority in recent months. GE worked with a recruiting firm and considered several candidates but Mr. Culp called Ms. Dybeck Happe "a kindred spirit."
Wall Street analysts long suspected that Mr. Culp, who took over in October 2018, would want to have his own CFO in place, but Ms. Miller held on for more than a year before her boss decided to make a change.
The timing of her departure raised some eyebrows because GE announced the change without having a successor ready to step up, an unusual move at a company once known for its elite management development and deep bench of capable of executives.
Ms. Miller was the first woman in the CFO role at GE. She was promoted into the job in October 2017 after former CFO Jeff Bornstein abruptly announced his retirement. Within weeks, GE slashed its financial forecasts and its dividend as problems in its power business and financial services arm came to light. Within months, GE revealed a $15 billion hole in its legacy insurance holdings and the regulatory probes.
"Jamie Miller walked into an impossible situation when given the job," said Melius Research analyst Scott Davis when her departure was announced in July. "But textbook turnarounds almost always include a new finance staff."
Ms. Dybeck Happe faces challenge of cutting costs and continuing GE restructuring, while helping GE reduce its pile of debt. Under Mr. Culp, GE has pushed a style of lean management processes that emulate Toyota with rigorous reviews of operations and decision making, on a daily basis in some cases. He has also said GE's turnaround would take years.
Ms. Dybeck Happe, 47 years old, will be based in Boston and oversee global finance organization as well as digital technology and global operations functions. A native of Sweden, she currently serves on the boards of French industrial company Schneider Electric SE and German electric utility E.ON.
In addition to the federal probes and potential auditor change, the new finance chief will face several challenges. She will have to quickly become acquainted with GE's complex finances and find ways to cut costs and boost efficiency at plants, said John Inch, a managing director at Gordon Haskett Research Advisors.
GE is selling off assets, including a pending $21 billion sale of a biotech business to Danaher Corp., to reduce its debt levels. Management's long-term goal is to lower GE's net debt to less than $30 billion. GE had net debt of $49 billion at the end of the third quarter.
GE submits thousands of tax filings annually, according to Mr. Inch, and in 2017 agreed to move more than 600 tax employees over to PricewaterhouseCoopers LLP as part of a slimming down exercise. "As new CFO, you will have to deal with a very complex tax structure," Mr. Inch said.
Ms. Dybeck Happe is the second senior executive to leave Maersk in the past 10 days. Last Monday, former chief operating officer Soren Toft left Maersk to join competitor Mediterranean Shipping Co. as chief executive of the container ship division. Maersk CEO Soren Skou said his successor would come from inside Maersk.
Write to Thomas Gryta at email@example.com
(END) Dow Jones Newswires
November 25, 2019 09:06 ET (14:06 GMT)
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