How GE CEO Larry Culp pulled off the turnaround of the century

When Larry Culp first saw Plant One in Lynn, Mass., back in 2018, it was, in short, a mess. The burly, six-two Culp, now 63, proudly points to a hulking yellow machine about the size of a TSA baggage scanner that mills the teeth on turbine disks. “The machine was such a disaster when I first saw it,” says Culp. It continually turned out faulty parts that the turbine blades couldn’t fit into. “A lot of people said we should close it,” he recalls of the cavernous complex, nearly three football fields long, that makes engine parts for Black Hawk helicopters and F-16 fighter jets. “It was like something from another age. They said it was old, dirty, that the union was too tough. But it had great bones.”

At the time, the same could be said of GE. When Culp took the helm in 2018, the colossal conglomerate that Jack Welch built into the most valuable and admired enterprise in America teetered on the brink of collapse. The sprawling business model that competitors once envied had become a liability—unwieldy, capital-intensive, and increasingly unable to compete in focused, fast-moving markets. Culp first shrank a crushing debt load and radically retooled operations to remake GE as a durable profit-spinner, then orchestrated a split into three publicly traded players that started via the spinoff of GE HealthCare in early 2023, and culminated in the separation of power franchise GE Vernova and GE Aerospace in April 2024. Culp went from running the whole show to piloting GE’s longtime crown jewel, the jet-engine maker.

On Culp’s first day as CEO, GE’s market cap measured just $96 billion, down over 80% from its peak in September 2000. Today, the valuations of the three enterprises total $689 billion. Combined, they’d rank as one of the top industrial companies in the U.S. by market value, second only to Tesla ($1.5 trillion), and 16th overall, edging the likes of Visa, J&J, and ExxonMobil. Since Culp arrived, the trio has garnered annualized returns of roughly 30%, twice the record for the S&P 500. The performances of GE Vernova and GE Aerospace stocks are particularly notable in their just over two years as independents. The former has jumped over 600%, while the latter has risen more than 160%. (GE HealthCare, the smallest by far of the three, gained only 16% as a standalone, but is strongly profitable.)

According to a number of CEOs and investors Fortune interviewed, Culp’s achievement likely towers as the top comeback in modern business history. “I don’t know of any turnaround that matches it,” says Kevin Sharer, the former Amgen chief who taught at Harvard alongside Culp. Nelson Peltz, CEO of activist firm Trian, took a big position in GE, and Peltz’s then-partner Ed Garden served as an influential dissident director pushing for the regime change that helped put Culp in the CEO seat. Says Peltz: “I was sure GE was going to file for Chapter 11. Then Larry arrived and performed the most amazing rescue I’ve ever read about or borne witness to.”

How did Culp pull off this remarkable turnaround? By deploying a playbook he runs from the factory floor, not the boardroom—one he first learned decades ago, at the foot of an exacting team of sensei in Tokyo, screaming at him in Japanese.

As a kid, Culp witnessed firsthand what it took to run a business. His mom and dad employed about a dozen people at the welding and machine shop that his grandfather founded in 1938 in Silver Spring, Md. “I still have my grandfather’s payroll register to remind me of the importance those modest amounts meant to families,” he says. Upon graduating from Harvard Business School in 1990, the hottest destinations for newly minted MBAs were consulting and investment banking. But Culp saw a big future in the out-of-vogue field of manufacturing. He joined Danaher of Washington, D.C., a midsize maker of hand tools for mechanics.

In just three years, Culp secured his first P&L running Veeder-Root, a manufacturer of gauges for gas station tanks, and proved so successful heading a series of other bigger and bigger Danaher units that in 2001, he rose to CEO at age 38. Over the next 13 years, he constructed a conglomerate resembling a mini-GE, taking Danaher’s revenues from $3.9 billion to $20 billion; multiplying its market cap almost sevenfold to $54 billion; and delivering shareholders five times the returns of the S&P 500.

“I was sure GE was going to file for Chapter 11. Then Larry arrived and performed the most amazing rescue I’ve ever read about or borne witness to.”—Nelson Peltz, Trian Fund Management

“I was sure GE was going to file for Chapter 11. Then Larry arrived and performed the most amazing rescue I’ve ever read about or borne witness to.”

In his first year at Danaher, Culp had a revelatory experience that would forever forge his approach to leadership: He spent a week learning the Toyota Production System from the original TPS masters at an air-conditioning plant in Tokyo. “If you’ve never been yelled at in Japanese while building air conditioners, you haven’t lived,” he quips. Under Culp, Danaher became a watchword in top-tier production as the first U.S. company........

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