John Flannery was unexpectedly ousted as boss of General Electric yesterday as the $110 billion industrial conglomerate warned that troubles in its power business would cause it to miss its full-year profit forecast.
GE shares rallied Monday on news of Culp's appointment, rising 80 cents, or 7%, to $12.09, as investors bet that the well-regarded Culp can work his magic at GE.
Mr Flannery had only been in the post since August 2017, when he succeeded Jeff Immelt, who had been in the job for 16 years.
The Boston-based company's shares closed at $11.29 on Friday, with a total market capitalization of about $98 billion.
GE Power's falling profits a year ago forced GE to slash its overall profit outlook and cut its dividend for only the second time since the Great Depression.
In addition to adding Mr Culp to the board, GE also appointed Thomas Horton, the former chief executive of American Airlines and AT&T, as lead director - citing his experience with corporate restructuring in the merger of American and US Airways.
Flannery's departure comes as he was trying to turn around GE, including through a series of major planned divestitures from the sprawling company.
The power division's outlook appeared to worsen last month when GE said several power plants equipped with its newest turbines had to be shut down because of a part failure.
GE doubled down on fossil fuels in 2015 under Immelt with the $10.3-billion purchase of French group Alstom SA's power business.
"He's an outsider and maybe it's going to take an outsider to come in and fix this thing", said Scott Davis, an analyst with Melius Research. "GE is bloated and its culture is destroyed".
H. Lawrence Culp assumed the helm of General Electric on Monday in a surprise move meant to stem a two-year decline that has humbled the once-mighty conglomerate and roiled investors. That will leave it focused on areas such as jet engines, power plants and renewable energy. The company received a slap in the face in June when it was removed from the prestigious Dow Jones Industrial Average; GE had been the last original member of the 1896-created blue-chip index, and had continuously been a member since November 1907.
"We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency, " Culp said in the statement.
"If I'm a GE employee today, I'm happy for the turnaround, but expectations are about to get a whole lot higher.GE employees will either step up or will be replaced", Davis said.
GE said there would be a substantial write-down of the $23 billion of goodwill associated with the power unit, whose prime business is producing large natural-gas turbines for electric utilities around the world.