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Wendt leaves GE Capital
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December 8, 1998: 5:54 p.m. ET
Head of $250B General Electric unit agrees to step down immediately
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NEW YORK (CNNfn) - Gary Wendt agreed Tuesday to step down as chairman and chief executive officer of GE Capital Services, the largest single contributor to General Electric's earnings.
Wendt served as chairman of GE Capital for 12 years and is widely credited with turning the company into a financial services giant. He will be succeeded by Dennis Dammerman, chief financial officer of General Electric (GE) for the last 14 years.
A GE spokesman said the company had been in discussions with Wendt for the last couple of weeks about his post.
"We are looking to put in place an executive team who will continue GE Capital's growth well into the next century," he said.
GE Capital offers everything from credit cards and mortgages to corporate financing. It currently has more than $250 billion in assets and accounts for about 40 percent of GE's bottom line earnings.
Dammerman has been named vice chairman of the board and chief executive of GE. A close ally of GE chairman Jack Welch Jr., Dammerman also will be chairman and CEO of GE Capital Services, replacing Wendt.
Wendt is said to have had a stormy relationship with Welch. In recent years he has opposed cuts to GE Capital's back office that have been backed by Welch.
But a company spokesman said that wasn't the reason for Wendt's departure.
"The issue is that this is part of GE Capital's transition into the next century," said company spokesman Tony Zehnder. "It's not about personalities, it's about planning for the next century."
Marvin Roffman, president of Philadelphia-based investment firm Roffman Miller Associates, however, said Wendt did little to quell the rumors, going so far as to make a "definite negative reference" to Welch and his relationship to him in a speech earlier this year.
The rumors erupted again in October, he said, as questions began to fly about the subsidiary's health, based on write-offs around the world. That pushed GE's stock to a recent low of $71.56 that month.
Dammerman, 53, has been seen as more risk averse than Wendt, but the GE spokesman said there would be no change in the company's "very aggressive" growth strategy.
Wendt's plans are unclear, though he has indicated a desire in the past to do something different. At the age of 56, he is thought to have been ruled out as a successor to Welch, who retires at the end of 2000.
Wendt went through a high profile divorce last year. His wife Lorna was awarded about $20 million in the settlement.
Denis Nayden has been promoted to president and CEO of GE Capital Corp., a subsidiary of GE Capital Services.
Shares of General Electric (GE), GE Capital Services' parent company, closed down 3/8 at 90-7/16 on the New York Stock Exchange Tuesday.
--from staff and wire reports
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General Electric
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