General Electric’s (NYSE: GE) CEO Larry Culp, Jr. will become the CEO of GE Aviation, replacing John Slattery, who was at the helm for the past two years.
The change was effective at the time of the announcement, and GE said that Culp would maintain his role as Chairman and CEO of GE.
Slattery will remain at GE Aviation, becoming the company’s executive vice president and chief commercial officer.
How We Got Here
GE announced in November 2021 that it would be splitting itself into three public companies; aviation, healthcare, and energy. After the split, GE would become an aviation-focused company by early 2024.
Culp, who joined the company in 2018, has helped it consolidate its debt and substantially improve its free cash flow. GE’s aviation segment has been the company’s top source of profit and is positioned to ride the travel rebound.
In the second quarter, the company said customers placed $7.2 billion of commercial engines and services orders, which was 31 percent more than the same period in 2021. Moreover, GE Aviation’s longstanding engine supply partnership with Boeing (NYSE: BA) has been a steady income stream. Still, there are new headwinds that Culp will have to work against to keep the business intact, from Boeing’s troubles, workforce shortages, and supply chain issues in the broader market.
In a statement, Culp celebrated the aviation business’s growth across the commercial and military sector and said with the growth opportunity for the aviation industry ahead, “the Board and I decided it is the right time for me to take on this expanded role.” He will also be able to help prepare GE Aviation more closely for its future as an independent company.
New Leadership Team
The company also announced that Russell Stokes would become the president and CEO of the commercial engines and services segment. Rahul Ghai, the executive vice president and CFO of Otis Worldwide Corp., will join the company and become the CFO of GE Aviation on August 15.
Slattery, Stokes, and Ghai will report directly to Culp. Tom Horton, GE’s lead independent director, said in the announcement that Culp’s track record was valuable in positioning GE Aviation for the future and that the Board was confident in his leadership.
“The Board and I are confident Larry and the GE Aviation leadership team will continue to strengthen this premier franchise and drive lasting growth for its employees and shareholders.”
GE will report its second quarter earnings on July 26, and investors will be keen to know if the aviation unit is on track to meet the 20 percent revenue growth projection for the entire year the company has projected with the robust travel rebound.