A prominent figure in quiet Chestertown, MD recently took the reins at troubled GE. He has a lot of work to do
Lawrence Culp, Jr. took the post last week after the former CEO was fired after one year. GE stock has continued to decline in the 12 months, despite a record performance by the stock market.
Culp is said to be the first outside CEO at GE, which in the past was known for the depth of its management pool and systems such as the Six Sigma that were often copied by companies like DuPont.
Looming in the background is legendary former CEO Jack Welch, whose legacy is tainted by successors who proved to be ill equipped to deal with a global economy.
Culp ’s appointment will be watched in Newark, the home of a small, growing plant that makes composite components for jet engines. The jet business is one of the healthier parts of GE.
In 2015, Culp, now 54, had settled into retirement in Chestertown after a successful stint as the CEO of Danaher Corp., a company based in the Washington, D.C. area.
Chestertown is not unknown to Delaware execs and other professionals, some of whom maintain residences and prefer the laid back waterfront town to the busier beach areas of the First State.
DuPont Co., by the way, continues to own a large farm near Chestertown that is used by its crop protection operations and environmental efforts its agriscience area.
During Culp ’s time at Danaher, the company that shares some similarities with GE had grown and prospered, despite an out of fashion conglomerate structure. Danaher makes diagnostic and dental equipment while also having a presence in environmental technologies and other areas.
Culp’s decision had some similarities with the path taken by DowDuPont CEO Edward Breen, who retired from a successful stint at former conglomerate Tyco. That company has been sliced and diced and no longer exists.
Breen later joined the DuPont board and eventually took the top post.
But while Breen spent his post-Tyco time in the income tax-free CEO haven of Florida, Culp opted for the home of his alma mater, Washington College.
Culp quickly became a key figure in the college town. He recently stepped down as the head of Washington’s. Board of Visitors and made big donations to the institution. Culp is also an investor in downtown buildings in Chestertown.
Now, Culp will be spending a lot of time at GE’s headquarters in Boston. He is not unfamiliar with the area, since he taught at Harvard in his retirement.
It will be interesting to see if Culp will follow his old playbook of buying up companies, improving their performance and selling when the market is right. He may also decide that GE is simply too difficult to run and sell it off in pieces, while navigating thorny pension and financial issues.
Culp will not be able to use Breen’s strategy of merging with a competitor and spinning the combined company into three pieces. GE is simply too big and too diversified. – Doug Rainey, publisher.
