Everything about General Electric totally explained
The
General Electric Company, or
GE is a
multinational American technology and
services
conglomerate incorporated in the State of New York. In terms of
market capitalization as at 31 March 2008, GE is the world's
third largest company and also second in the
BrandZ ranking. In the 1960s, aspects of U.S. tax laws and accounting practices led to a rise in the assembly of
conglomerates. GE, which was a conglomerate long before the term was coined, is arguably the most successful organization of this type.
History
In 1876,
Ohio-born
Thomas Edison opened a new
laboratory in
Menlo Park,
New Jersey. Out of the laboratory came arguably one the most famous inventions of all—a practical
incandescent electric lamp. By 1890, Edison had organized his various businesses into the
Edison General Electric Company.
In 1879,
Elihu Thomson and
Edwin J. Houston formed the rival
Thomson-Houston Electric Company. It merged with various companies and was later led by
Charles A. Coffin, a former shoe manufacturer from
Lynn, Massachusetts.
Mergers with competitors and the
patent rights owned by each company made them dominant in the electrical industry. As businesses expanded, it became increasingly difficult for either company to produce complete electrical installations relying solely on their own technology.
In 1892, these two major companies combined, in a merger arranged by
financier J. P. Morgan, to form the General Electric Company, with its headquarters in
Schenectady, New York.
In 1896, General Electric was one of the
original 12 companies listed on the newly-formed
Dow Jones Industrial Average and still remains after years (it is the only one of the original companies remaining on the Dow — though it hasn't always been in the DOW index).
In 1911 the National Electric Lamp Company (NELA) was absorbed into General Electric's existing lighting business. GE then established its lighting division headquarters at
Nela Park in
East Cleveland, Ohio. Nela Park was the world's first industrial park, and was added to the National Register of Historic Places in 1975, and is still the headquarters for GE's lighting business.
The
Radio Corporation of America (RCA) was founded by GE in 1919 to further international
radio.
General Electric was one of the eight major
computer companies through most of the 1960s - with
IBM, the largest, called "Snow White" followed by the "
Seven Dwarfs":
Burroughs,
NCR,
Control Data Corporation,
Honeywell,
RCA,
UNIVAC and GE. (There was also
Scientific Data Systems, much smaller than the seven dwarfs). GE had an extensive line of general purpose and special purpose computers. Among them were the
GE 200, GE 400, and
GE 600 series general purpose computers, the GE 4010, GE 4020, and GE 4060 real time process control computers, and the Datanet 30 message switching computer. A Datanet 600 computer was designed, but never sold. It has been said that GE got into computer manufacturing because in the 1950s they were the largest user of computers outside of the
United States federal government. In 1970 GE sold its computer division to Honeywell.
In 1986 GE reacquired RCA, primarily for the
NBC television network. The remainder was sold to various companies, including
Bertelsmann and
Thomson SA.
In 2002 Francisco Partners and
Norwest Venture Partners acquired a division of GE called GE Information Systems (GEIS). The new company, named
GXS, is based in
Gaithersburg, MD. GXS is a leading provider of B2B e-Commerce solutions. GE maintains a minority ownership position in GXS.
In 2004 GE bought
Vivendi's television and movie assets, becoming the third largest media conglomerate in the world. The new company was named
NBC Universal. Also in 2004 GE completed the
spinoff of most of its
mortgage and
life insurance assets into an independent company,
Genworth Financial, based in
Richmond, Virginia.
Genpact formerly known as GE Capital International Services (GECIS ) was established by GE in late 1997 as its captive India based
BPO. GE sold 60% stake in Genpact to General Atlantic and Oak Hill Capital Partners in 2005 and hived off Genpact into an independent business. GE is still a major client to Genpact getting its services in customer service, finance, information technology and analytics.
For a complete list of acquisitions and divestitures, see
General Electric timeline.
Past controversies
GE has faced criminal action regarding its defense related operations. GE was convicted in 1990 of defrauding the U.S. Department of Defense, and again in 1992 on charges of corrupt practices in the sale of jet engines to Israel.
Corporate affairs
GE is a multinational conglomerate headquartered in
Fairfield, Connecticut. Its New York headquarters are located at 30 Rockefeller Plaza in
Rockefeller Center, known as the
GE Building for the prominent GE logo on the roof. Through its RCA subsidiary, it has been associated with the Center since its construction in the 1930s.
The company describes itself as composed of a number of primary business units or "businesses." Each "business" is itself a vast enterprise, many of which would, even as a standalone company, rank in the
Fortune 500. The list of GE businesses varies over time as the result of
acquisitions,
divestitures and
reorganizations. General Electric's tax return is the largest return filed in the United States; the 2005 return was approximately 24,000 pages when printed out, and 237 megabytes when submitted electronically.
In 2005 GE launched its "
Ecomagination" initiative in an attempt to position itself as a "green" company. GE is currently one of the biggest players in the wind power industry, and it's also developing new environment-friendly products such as hybrid locomotives, desalination and water reuse solutions, and photovoltaic cells. The company has set goals for its subsidiaries to lower their greenhouse gas emissions.
On
21 May 2007, General Electric announced it would sell its GE Plastics division to petrochemicals manufacturer
Saudi Basic Industries Corp. for net proceeds of $11.6 billion. The transaction took place on August 31, 2007, and the company name changed to
SABIC Innovative Plastics, with
Brian Gladden as CEO.
CEO
Jeffrey Immelt is the current chairman of the board and chief executive officer of General Electric. He was selected by GE's Board of Directors in 2000 to replace John Francis Welch Jr. (
Jack Welch) following his retirement.
Previously, Immelt had headed GE's Medical Systems division (now GE Healthcare) as its President and CEO. He has been with GE since 1982 and is on the board of two non-profit organizations.
His tenure as the Chairman and CEO started at a time of crisis - he took over the role on
September 7,
2001, four days before the terrorist attacks on the United States, which killed two employees and cost GE's insurance business $600 million - as well as having a direct effect on the company's Aircraft Engines sector.
Brand
General Electric has the fourth most recognized brand in the world, worth almost $49 billion.
CEO Jeffrey Immelt had the new
brand commissioned in 2004, after he took the reins as chairman, to unify the diversified businesses of GE. The brand included a change of the corporate color palette, small modifications to the, a new customized font (
GE Inspira), and a new slogan,
"imagination at work" replacing the longtime slogan
"we bring good things to life". The new brand requires many headlines to be lowercased and adds visual "white space" to documents and advertising to promote an open and approachable company. The new brand was designed by
Wolff Olins and is used extensively on GE's marketing, literature and website.
Businesses
GE's divisions include
GE Commercial Finance,
GE Industrial,
GE Infrastructure (including
GE-Aviation and the former
Smiths Aerospace),
GE Consumer Finance,
GE Healthcare, and
NBC Universal, an entertainment company.
Through these businesses, GE participates in a wide variety of markets including the generation, transmission and distribution of
electricity (eg.
Nuclear, gas and solar),
lighting, industrial
automation,
medical imaging equipment,
motors,
railway locomotives,
aircraft jet engines, and
aviation services. It was co-founder and is 80% owner (with Vivendi) of
NBC Universal, the National Broadcasting Company. Through GE Commercial Finance, GE Consumer Finance, GE Equipment Services, and GE Insurance it offers a range of financial services as well. It has a presence in over 100 countries.
Since over half of GE's revenue is derived from
financial services, it's arguably a financial company with a manufacturing arm. It is also one of the largest lenders in countries other than the United States, such as
Japan. Even though the first wave of conglomerates (such as
ITT,
Ling-Temco-Vought,
Tenneco, etc) fell by the wayside by the mid-1980s, in the late 1990s, another wave (consisting of
Westinghouse,
Tyco, and others) tried and failed to emulate GE's success.
In 2007 General Electric auctioned off its
plastics business for $1.6 billion. It was announced in May 2008, that it would auction off its appliances business for an expected sale of $5-8 billion.
Corporate achievements
In 2004, GE was named number one company for employers and employees on the
Forbes 500 Global Player list.
Over the years GE has received several awards honoring them for their accomplishments, values and reputation:
- In Fortune Magazine's 2005 "Global Most Admired Companies" list, GE ranked first overall. (February 2005)
- In Fortune Magazine's 2006 "America's Most Admired Companies" list, GE ranked first overall. (March 2006)
- GE was named to the Dow Jones Sustainability World Index as one of the world's leaders in environmental, social and economic programs.
- GE ranked ninth on Fortune Magazine's "50 Most Desirable MBA Employers" list. (April 2004)
Analyst coverage
See
Yahoo! analyst coverage
Germanotta, Jeffrey (William Blair & Company, L.L.C.)
Cornell, Robert (Lehman Brothers)
Parent, Nicole (Credit Suisse First Boston)
Dray, Deane (Goldman Sachs)
Environmental record
General Electric has a history of large-scale air and water pollution. Based on year 2000 data, researchers at the Political Economy Research Institute listed the corporation as the fourth-largest corporate producer of air pollution in the United States, with more than 4.4 million pounds per year of toxic chemicals released into the air. General Electric has also been implicated in the creation of toxic waste. According to EPA documents, only the United States Government and Honeywell are responsible for producing more Superfund toxic waste sites.
In 1983, New York State Attorney General Robert Abrams filed suit in the United States District Court for the Northern District of New York to compel G.E. to pay for the cleanup of what was claimed to be more than 100,000 tons of chemicals dumped (legally, at the time) from their plant in Waterford. In 1999, the company agreed to pay a $250 million settlement in connection with claims it polluted the Housatonic River and other sites with polychlorinated biphenyls (PCBs) and other hazardous substances. In 2002, after spending millions of dollars on advertisements intended to avert the project, General Electric was ordered to clean up a 40 mile stretch of the Hudson River it had contaminated with PCBs. In 2003, acting on concerns that the plan proposed by GE didn't "provide for adequate protection of public health and the environment," the United States Environmental Protection Agency issued a unilateral administrative order for the company to "address cleanup at the GE site" in Rome, Georgia, also contaminated with PCBs.
In May 2005 GE announced the launch of a program called "Ecomagination," intended, in the words of CEO Jeffrey Immelt "to develop tomorrow’s solutions such as solar energy, hybrid locomotives, fuel cells, lower-emission aircraft engines, lighter and stronger durable materials, efficient lighting, and water purification technology,” prompting the The New York Times to observe that, "while General Electric's increased emphasis on clean technology will probably result in improved products and benefit its bottom line, Mr. Immelt's credibility as a spokesman on national environmental policy is fatally flawed because of his company's intransigence in cleaning up its own toxic legacy."
GE was also the focus of a 1991 short subject Academy Award winning documentary entitled, "Deadly Deception: General Electric, Nuclear Weapons, and Our Environment" that juxtaposed "GE's rosy 'We Bring Good Things To Life' commercials with the true stories of workers and neighbors whose lives have been devastated by the company's involvement in building and testing nuclear bombs."(External Link)Further Information
Get more info on 'General Electric'.
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