General Electric’s 132-year journey from American manufacturing icon to fallen giant

General Electric’s 132-year journey from American manufacturing icon to fallen giant

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  • General Electric was an icon of American innovation and manufacturing for most of its history.
  • The company reached its peak in 2000, but had a rocky journey entering the 21st century.
  • In April, GE finished splitting its remaining divisions into three stand-alone, publicly traded companies.

Over the course of the 20th century, General Electric grew into a powerhouse — literally — of American industry.

Founded by Thomas Edison, the company expanded into everything from appliances to broadcasting, jet engines to computing. It became a household name for millions of consumers.

But a series of financial missteps in the early 21st century shook GE to its core, and it announced that it would break up its operations into three separate companies. That process concluded on April 2, 2024, with all three of its separate entities now publicly trading on exchanges.

Here’s a timeline of GE’s long and storied history.

1889-1892: Edison General Electric
thomas edison
Thomas Edison.

In 1879, inventor Thomas Edison patented the incandescent light bulb after his laboratory tested 3,000 designs over two years

By 1889, Thomas Edison had formed Edison General Electric from a handful of electricity companies he’d been operating.

Three years later, Edison merged his company with the Thomson-Houston Electric Company, and The General Electric Company was formed.

The roaring ’20s: New technologies
ge vacuum tubes
GE vacuum tubes, designed to regulate electric currents, 1918.

GE began making electric home appliances in 1922, such as the first electric stoves, washing machines, and refrigerators. And in 1927, GE developed the first television. 

1940s and 1950s: Mid-century modern
The engine of a United Airlines Boeing 737 Max 8 — United Airlines New Aircraft Interior
Inside United Airlines’ newest aircraft and interior.

GE built the first American jet engine in 1941, and in 1957, opened the first nuclear power plant near Pittsburgh, which stayed open until 1982.

1981-2001: The Welch years
jack welch
Former GE CEO Jack Welch.

GE’s best-known CEO, Jack Welch, took over in 1981 and kicked off a frenzy of sales and acquisitions that reshaped the American corporate landscape.

One of his biggest acquisitions in 1986 – RCA, which owned NBC – advanced Welch’s goal of taking GE beyond manufacturing to become a “boundary-less” business.

By the time Welch stepped down in 2001, GE had grown to a nearly $130 billion behemoth.

2001-2017: Troubled times
jeff immelt
Former GE CEO Jeffrey Immelt.

GE’s next CEO, Jeffrey Immelt, was hand-picked by Welch and took over as the company’s market capitalization was declining from its peak of more than $450 billion.

A lot happened during Immelt’s 16 years running GE.

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The 2008 financial crisis dealt a huge blow to the company: Its stock fell 42% in 2008, forcing GE to rethink its operations. Warren Buffett even stepped in and invested $3 billion to keep the company afloat.

GE quickly sold off some of its biggest past money-makers, like NBCUniversal, GE Plastics, and GE Water, and the selloff continued with financial services in 2014, home appliances in 2016, and oil and gas in 2017.

In spite of the company’s performance, Immelt maintained a pair of private corporate jets without telling GE’s board of directors. The day Immelt announced his retirement, June 12, 2017, GE stock went up 4%.

Although Welch publicly supported Immelt, he later admitted to other GE executives that the choice was one of his biggest mistakes, according to Fox Business.

2017-2018: John Flannery’s stint as CEO
GE CEO John Flannery
Former GE CEO John Flannery.

John Flannery, the head of GE’s health care business, took over after Immelt after having been with the company for 30 years.

He served as CEO for 14 months before being removed in October 2018 by a unanimous vote from the board of directors, receiving an exit package worth $10 million.

The company lost over $100 billion in market value during his tenure.

2018-2021: A leaner manufacturer
Larry Culp GE CEO
Larry Culp, CEO of General Electric.

Since Larry Culp took over in 2018, GE has been steadily reducing its debts and selling off parts of its business.

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The years were not without controversy however, as a whistleblower accused the company of accounting fraud in 2019. Those claims did not appear to have merit.

In November 2021, the company said it would spin off its remaining three business divisions — aviation, healthcare and power — into separate publicly traded companies.

“This is the best way to fully realize the potential of these businesses,” Culp told the Wall Street Journal.

2024: The official end of the old GE as people knew it
General Electric banners hang on the facade of the New York Stock Exchange. after completing the conf
Banners for GE Aerospace and GE Vernova hangs on the facade of New York Stock Exchange on April 2, 2024, the first day that the divisions started trading as separate entities.

GE’s breakup was fully consummated on April 2, 2024, when two of the three split-up portions of the company began trading on the New York Stock Exchange as separate entities for the first time.

The GE Corporation was restructured as GE Aerospace, with Culp as its CEO, while the company’s energy operations, which include its power generation and electrification divisions, were spun off into GE Vernova.

GE Healthcare, which develops hospital equipment and software, had previously begun trading on the Nasdaq in January of 2023.

“With the successful launch of three independent, public companies now complete — today marks a historic final step in the multi-year transformation of GE,” Culp said in a statement.

Ivan De Luce contributed to an earlier version of this story.

Read the original article on Business Insider

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