Medtronic Inc. (MDT) named General Electric Co. (GE) health-care veteran Omar Ishrak as its new chairman and chief executive, ending a search to find an outsider to replace retiring CEO Bill Hawkins.
Ishrak, 55, is leaving his post as head of GE Healthcare Systems, a $12 billion division that includes diagnostic medical-imaging equipment. He is joining a company focused on implantable heart devices and spinal-treatment products that is looking for ways to control costs and offset sluggish growth in big medical-device markets.
Ishrak succeeds Hawkins, 57, who announced retirement plans in December. Medtronic touted the new CEO's "exceptional experience" and "strong track record," including his efforts to nearly double sales at GE's Clinical Systems business to $5 billion between 2004 and 2009. Ishrak has spent 16 years with GE Healthcare and became president and CEO of the Healthcare Systems unit in January 2009.
"We are confident he has the leadership credentials and experience to move the company forward," said Ken Powell, lead independent director on Medtronic's board, in a release.
The company didn't make Ishrak available for an interview Wednesday. The incoming executive, who officially takes over on June 13, said in a brief statement that he has long admired Medtronic and looks forward to advancing the company as a global health-care leader.
Citigroup analyst Matthew Dodds called Ishrak's appointment unexpected, but also said it "looks promising." Dodds said he doesn't expect the new CEO to shake up Medtronic's footprint, beyond jettisoning one or two small businesses, but instead expects a focus on execution, tighter expense control and possibly quicker expansion in emerging markets.
Shares of Medtronic, the world's largest standalone medical-devices company, rose 1 cent to $42.66 in recent trading. They have risen about 15% so far this year.
Ishrak will inherit a busy playbook from his predecessor, who has already pumped up Medtronic's expansion efforts in emerging markets, added several new products through acquisitions and--just three months ago--announced cost-cutting moves that reduced 4% to 5% of the company's work force. Medtronic also recently rolled out new products, including pacemakers, defibrillators and spinal tools, which it is counting on to fuel its biggest businesses.
Hawkins will depart before it is clear whether his efforts will help Medtronic successfully navigate some still-unfolding challenge in the $200 billion U.S. devices sector. The biggest markets for cardiology and orthopedic implants are mature and slow growing these days, and are also under pressure as hospitals focus ever more acutely on controlling costs for medical products.
Medtronic has staked out positions in key, new technology, such as catheter-delivered replacement heart valves, but the sheer size of its biggest businesses make their growth challenges tough to quickly offset. The company got more than half its $15.8 billion in sales in its 2010 fiscal year from markets for spinal and heart-rhythm devices.
Separately, GE's GE Healthcare unit said Wednesday it named Thomas Gentile president and CEO of the Healthcare Systems division--replacing Ishrak--while Mike Swinford was named president and CEO of Global Services. Global Services is a new business responsible for driving GE Healthcare's service strategy globally, the company said.
Gentile, a 13-year GE veteran, was vice president of GE Aviation's services division. Swinford previously served as services leader for GE Healthcare's North American division and has been with GE since 1992.
Ishrak, 55, is leaving his post as head of GE Healthcare Systems, a $12 billion division that includes diagnostic medical-imaging equipment. He is joining a company focused on implantable heart devices and spinal-treatment products that is looking for ways to control costs and offset sluggish growth in big medical-device markets.
Ishrak succeeds Hawkins, 57, who announced retirement plans in December. Medtronic touted the new CEO's "exceptional experience" and "strong track record," including his efforts to nearly double sales at GE's Clinical Systems business to $5 billion between 2004 and 2009. Ishrak has spent 16 years with GE Healthcare and became president and CEO of the Healthcare Systems unit in January 2009.
"We are confident he has the leadership credentials and experience to move the company forward," said Ken Powell, lead independent director on Medtronic's board, in a release.
The company didn't make Ishrak available for an interview Wednesday. The incoming executive, who officially takes over on June 13, said in a brief statement that he has long admired Medtronic and looks forward to advancing the company as a global health-care leader.
Citigroup analyst Matthew Dodds called Ishrak's appointment unexpected, but also said it "looks promising." Dodds said he doesn't expect the new CEO to shake up Medtronic's footprint, beyond jettisoning one or two small businesses, but instead expects a focus on execution, tighter expense control and possibly quicker expansion in emerging markets.
Shares of Medtronic, the world's largest standalone medical-devices company, rose 1 cent to $42.66 in recent trading. They have risen about 15% so far this year.
Ishrak will inherit a busy playbook from his predecessor, who has already pumped up Medtronic's expansion efforts in emerging markets, added several new products through acquisitions and--just three months ago--announced cost-cutting moves that reduced 4% to 5% of the company's work force. Medtronic also recently rolled out new products, including pacemakers, defibrillators and spinal tools, which it is counting on to fuel its biggest businesses.
Hawkins will depart before it is clear whether his efforts will help Medtronic successfully navigate some still-unfolding challenge in the $200 billion U.S. devices sector. The biggest markets for cardiology and orthopedic implants are mature and slow growing these days, and are also under pressure as hospitals focus ever more acutely on controlling costs for medical products.
Medtronic has staked out positions in key, new technology, such as catheter-delivered replacement heart valves, but the sheer size of its biggest businesses make their growth challenges tough to quickly offset. The company got more than half its $15.8 billion in sales in its 2010 fiscal year from markets for spinal and heart-rhythm devices.
Gentile, a 13-year GE veteran, was vice president of GE Aviation's services division. Swinford previously served as services leader for GE Healthcare's North American division and has been with GE since 1992.
