New General Electric chief executive John Flannery is taking another big step to separate himself from his predecessor with a management shake-up that will result in the departure of three top executives.
Boston-based GE said Friday that it is replacing chief financial officer Jeff Bornstein with Jamie Miller, the head of its transportation business, on Nov. 1. Miller is based in the Chicago area, but will move to Boston for the job. Bornstein will leave the company on Dec. 31.
Also leaving at the end of December: two other vice chairs, John Rice and Beth Comstock. They are retiring after 39 and 27 years with the company, respectively.
Although new CEOs often look to assemble their own teams after they take charge, Bornstein’s pending departure comes as a bit of a surprise.
He had been a contender to succeed Jeff Immelt as CEO, but when the job went to Flannery in June, the company made it clear Bornstein would remain a valued player as the CFO. Bornstein, a Maine native who joined the company 28 years ago after graduating from Northeastern University, is among the most familiar GE executives in Boston business circles, and played an important role in the company’s relocation from Connecticut last year.
Bornstein, in a statement, said he and Flannery concluded that this is the right time to bring in a new CFO with a fresh perspective to guide the company’s efforts to cut costs and boost its stock performance. GE is under pressure from shareholders, and Flannery has promised to carry through on a plan to cut costs by $2 billion by 2019.
Flannery has been giving all aspects of GE operations a thorough review. He has, for example, decided to delay the completion of its new Boston headquarters complex by two years, and to sell off GE’s jets based at Hanscom Field in Bedford. Bornstein is expected to unveil the full details of his cost-cutting plans to investors in November.
The latest changes come just days after Immelt stepped down from GE’s board earlier than expected. Although Immelt stepped down as CEO on Aug. 1, he had originally planned to stay on as chairman until the end of the year. On Monday, the company announced Immelt would leave the board immediately instead, saying he had determined Flannery was ready to succeed him as board chairman.
Fox Business Network’s Charlie Gasparino reported on Tuesday that activist shareholder Trian Fund Management is pushing to get a board seat following Immelt’s departure. GE unveiled the $2 billion cost-cutting goal in March, in part to placate Trian’s dissatisfaction with the stock performance.