“No one’s happy with the stock price now,” Mr. Flannery said. He added that the health care sector in particular offered “so much long-term growth,” saying that G.E. was “just scratching the surface of what we can do in that business.”
Mr. Flannery, 55, will become chief executive of G.E. on Aug. 1. Mr. Immelt, 61, will remain as chairman until he retires on Dec. 31. Mr. Flannery will then add the role of chairman on Jan. 1, 2018.
G.E. also said that Jeff Bornstein, its chief financial officer, would be promoted to vice chairman. The company said its board had overseen a succession planning process since 2011.
“During this time of dynamic global markets and relentless focus on technology and operational excellence, there is no better person to lead G.E. than John Flannery,” Jack Brennan, the company’s lead independent director, said in a news release. “He brings unique experience and a strong skill set to the job.”
Like Mr. Immelt, Mr. Flannery is a veteran of G.E., beginning at GE Capital in 1987 with a focus on evaluating risk for leveraged buyouts. He has held other posts across the wider conglomerate, running its corporate restructuring and workout group, leading its GE Equity business and working with GE Capital in Latin America and Asia.
In 2013, he took over business development at the corporate level, where he was involved in G.E.’s acquisition of Alstom, the shrinking of GE Capital and the sale of GE Appliances. Mr. Flannery joined GE Healthcare in 2014, overseeing a turnaround of that business, the company said.
“John is the right person to lead G.E. today,” Mr. Immelt said in the company statement. “He has broad experience across multiple businesses, cycles and geographies. He has a track record of success and led one of our most essential businesses.”
The announcement caps a long career for Mr. Immelt, who joined the company in 1982 and who has navigated several crises during his tenure as G.E.’s top executive. He replaced Jack Welch, G.E.’s legendary chairman and chief executive, just days before the Sept. 11, 2001, terrorist attacks in the United States.
Mr. Immelt later steered G.E. through the global financial crisis and oversaw the sale of the bulk of its sprawling finance arm, GE Capital. Though focused on its industrial businesses, G.E. has retained some financing operations related directly to those businesses.
Under Mr. Welch, G.E. aggressively expanded in the finance business through its GE Capital arm, becoming one of the largest lenders in the United States and regularly generating strong profits. But that business — and the regulatory demands that came with it — became much less attractive and a riskier bet after the financial crisis in 2008.
GE Capital was called a “systemically important financial institution” in the years that followed — the official name for a lender that the government considers too big to fail. The designation cut into potential profits by imposing additional restrictions and requirements upon its operations.