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General Electric
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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 of September 30, 2008, GE is the world's tenth largest company. 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.
911 the National Electric Lamp Association (NELA) was absorbed into General Electric's existing lighting business.
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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 of September 30, 2008, GE is the world's tenth largest company. 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
For GE's description of their early history, see
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 has not continuously been in the DOW index).
In 1911 the National Electric Lamp Association (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. 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 spin-off 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.
In May 2008, GE announced it was exploring options for divesting the bulk of its Consumer and Industrial business.
For a complete list of acquisitions and divestitures, see General Electric timeline.
Criminal convictions
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.
Job Cuts
On Dec 12, 2008, GE announced job cuts as well as a restructuring of its finance unit, warning that fourth quarter results will be at the low end of previous projections.
On Feb 20, 2009, GE announced extra 4,000 job cuts bringing the total up to 12,000 as well as a restructuring of its production and repair units, warning that first quarter results will be lower than projections.
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 is 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 May 21 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. Since taking over, GE's stock has dropped nearly 80%. Immelt has also been selected as one of President Obama's financial advisors concerning the economic rescue plan.
Brand
General Electric has the fourth most recognized brand in the world, worth almost $49 billion.
CEO Jeffrey Immelt had a set of changes in the presentation of the brand commissioned in 2004, after he took the reins as chairman, to unify the diversified businesses of GE. The changes included a new corporate color palette, small modifications to the GE Logo, a new customized font (GE Inspira), and a new slogan, "imagination at work" replacing the longtime slogan "we bring good things to life", composed by David Lucas. The standard requires many headlines to be lowercased and adds visual "white space" to documents and advertising to promote an open and approachable company. The changes were designed by Wolff Olins and are used extensively on GE's marketing, literature and website.
The is reinforced by ownership of two letter domain ge.com. The domain was registered on August 5, 1986. General Electric is one of the few corporations worldwide to own a two letter domain name.. The brand is also reflected by the GE New York Stock Exchange ticker symbol.
General Electric is also very focused on the protection of its brand. In 2009 it asked Australian musician Edward Guglielmino to change his logo, a parody of the "GE" logo.
Businesses
GE's divisions include GE Capital (including GE Commercial Finance and GE Money and GE Consumer Finance,), GE Technology Infrastructure (including GE Aviation,the former Smiths Aerospace and GE Healthcare), GE Energy Infrastructure, 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 co-founded 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 is 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.
It was announced in May 2008 that General Electric would auction off its appliances business for an expected sale of $5-8 billion.
The Finnish RFI filter firm DICRO Oy was founded in 1987 and bought out an older rival RFI filter firm named GE Procond Oy on February 13, 2006, which was renamed to Procond Oy and until then part of General Electric ,but now may be sold off too.
Corporate recognition
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
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 (2,000 Tonnes) 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, Honeywell, and Chevron 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.
From approximately 1947 to 1977, GE discharged as much as 1.3 million pounds of PCBs from its capacitor manufacturing plants at the Hudson Falls and Fort Edward facilities into the Hudson River. Spending millions over many years, GE fought a media and political battle to avoid cleaning up the river: GE attacked the Superfund law in court, and launched an extensive media campaign to refute the benefits of cleaning up the river, claiming that dredging the river would actually stir up PCBs. In 2002, GE was ordered to clean up a stretch of the Hudson River it had contaminated.
In 2003, acting on concerns that the plan proposed by GE did not "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.
Environmental initiative
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 has said that it will invest $1.4bn in cleantech research and development in 2008 as part of its Ecomagination initiative. As of October 2008, the scheme had resulted in 70 green products being brought to market, ranging from halogen lamps to biogas engines. In 2007, GE raised the annual revenue target for its Ecomagination initiative from $20bn in 2010 to $25bn following positive market response to its new product lines.
Media representation
GE was also the focus of a 1991 short subject Academy Award winning documentary, "" 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."
GE is often satirized in the NBC produced American television show 30 Rock because of its ownership of NBC.
See also
Further reading
- Carlson, W. Bernard. Innovation as a Social Process: Elihu Thomson and the Rise of General Electric, 1870-1900 (Cambridge: Cambridge University Press, 1991).
- Woodbury, David O. Elihu Thomson, Beloved Scientist (Boston: Museum of Science, 1944)
- Haney, John L. The Elihu Thomson Collection American Philosophical Society Yearbook 1944.
- Hammond, John W. Men and Volts: The Story of General Electric, published 1941, 436 pages.
- Mill, John M. Men and Volts at War: The Story of General Electric in World War II, published 1947.
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