Massachusetts' Largest Company In Midst Of Major Turnaround

BOSTON, MA — The company wooed here last year by nearly $150 million in tax breaks and incentives just let on to its shareholders that things aren't going so great. Sorry, taxpayers, but 2018 will be a "reset" year for General Electric.

That's according to new Chairman and CEO John Flannery, who announced the sour news while laying out a significant retooling of the Fort Point-bound company Monday morning in New York. (You can read GE's full turnaround plan here.) Meanwhile, CNBC is reporting analysts are saying it could take five years to turn the company around.

GE, Massachusetts' largest company and prized business haul, is in the midst of a sizable turnaround. The conglomerate announced that its quarterly dividend is being cut from 24 cents to 12 starting next month. It also released profit projections that were well below what Wall Street had been expecting - between $1 and $1.07 a share instead of the expected $1.15, according to FactSet.

The stock fell almost 4 percent at the opening bell.

Boston wooed the conglomerate from Fairfield, Conn., with $25 million in property tax breaks over 20 years, while Massachusetts offered a package of up to $120 million in additional benefits. GE plans to employ 800 people in Boston by 2024 and pledged $50 million to local philanthropic efforts over five years.

The company hasn't said whether Boston jobs will be affected by its restructuring. The Boston Globe reports the company will honor the philanthropic donations.

GE moved into temporary Boston digs in August. You can see the 2.4-acre campus design proposal for its Fort Point headquarters here.

But what kind of state the company will be in when it moves to its permanent headquarters is anyone's guess. Flannery, who took over in August, has been tasked with reviving growth at GE with the stock down 37 percent this year and trading at five-year lows.

"We understand the importance of this decision to our shareowners and we have not made it lightly," Chairman and CEO John Flannery said in a statement. "We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation."

This only marks the third time GE has cut its dividend since 1899, according to CNBC.

After reporting disappointing third-quarter results in October, Flannery said that aside from the exit from certain businesses, GE was planning major cost cuts across the board. The company has already surpassed its goal of cutting $1 billion in industrial costs this year. It plans more than $2 billion in cuts next year, double the original target, to go with at least $20 billion in divestments over the next year or two, the executive said.

The company also said Monday that it will shrink its board of directors to 12 members from the current 18 by April. Flannery said there will be three new directors with "relevant industry experience," annual elections for board members, and a term limit of 15 years.

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The Associated Press contributed to this report

Photo courtesy of GE