General Electric is one of America's oldest and biggest corporate giants but also - surprisingly perhaps - one of the country's most flexible conglomerates, having dabbled in numerous very different sectors over its long history. It remains a dominant force in industry, technology and - for now - financial services. For several years, it was also among the foremost US mediaowners through its NBC television network and, more recently, the Universal Pictures movie studio. However, it sold this division in stages to cable operator Comcast between 2011 and 2013. In 2015, the group announced plans to pull out of financial services as well in order to refocus its attention on industrial engineering. Its consumer finance operations in North America have already been split out as Synchrony Financial. GE has also been one of America's biggest home appliances manufacturers for almost a century, but this business too should finally be divested in 2016. Yet the power of the corporate brand is undiminished. Interbrand ranks General Electric as one of the world's most valuable brands, and it regularly tops the rankings of the world's most respected companies. Almost from its inception, it has consistently provided a benchmark for smart business strategy and management excellence.
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Adbrands Weekly Update 3rd Nov 2016: GE continued to restructure its business portfolio. Following on from its transformational exit from financial services last year, it has now reached agreement to spin off its oil and gas division into rival Baker Hughes. The combined entity will have sales of around $32bn. GE CEO Jeff Immelt said this is not so much a separation as a strengthening. Though the enlarged company will maintain the Baker Hughes name and public listing, it will be 63%-controlled by GE, and led by GE Oil & Gas CEO Lorenzo Simonelli. That will give GE an option to reacquire the business at a later date if it chooses and if the sector continues to improve. GE also announced its intention to divest its water treatment and processing division in order to focus on four main segments of jet engines, power turbines, medical scanners and locomotives.
Adbrands Weekly Update 12th May 2016: Ads of the Week "Raining Octopuses". Presumably only digital octopuses were harmed in the making of GE's latest ad (which borrows just a little from that famous raining frogs scene in the movie Magnolia). It's a typically bold and attention-grabbing concept from the always excellent BBDO New York. It can't be easy coming up with sexy ideas for an industrial company like GE but if any agency can do it, it has to be this one.
Adbrands Weekly Update 18th Feb 2016: Ads of the Week "A Snowball's Chance In Hell". Trust BBDO New York to come up with another brilliant marketing concept for longtime client GE. To provide further proof of GE's exceptional scientific skills and innovative approach towards problem-solving, BBDO set its client the task of disproving the truth of several colloquial idioms for the impossible, like "a snowball's chance in hell" , "talking to a wall" or "catching lightning in a bottle". All possible, as it turns out, in a trio of superbly cinematic, lavishly mounted experiments. (See the other two on our Facebook page). Mythbusters, eat your hearts out.
Adbrands Weekly Update 28th Jan 2016: The spin-off of virtually all of its mammoth financial services division has resulted in a substantial net loss for General Electric. From the previous year's record profit of $15.2bn, GE slumped to a net loss of $6.1bn. That included a large tax charge and a $7.7bn charge against selected continuing GE Capital units, to cover restructuring and lay-offs. Total revenues from continuing operations were more or less unchanged at $117.4bn.
Adbrands Weekly Update 21st Jan 2016: General Electric wasted no time in finding another buyer for its domestic appliances business after the agreed sale to Electrolux was blocked by regulators. Instead it has struck an even better deal with Chinese manufacturer Haier, which has agreed to buy the business for $5.4bn - over $2bn more than Electrolux had offered. The deal includes a 40-year license to keep using the GE name. Best-known internationally for its air conditioners, Haier is a leading manufacturer of washing machines, refrigerators and other domestic appliances in its home market. However, it has a significantly smaller presence in the US, which should ease regulatory scrutiny of the deal.
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Free for all users | see full profile for current activities: General Electric's founder is also probably the world's best-known inventor, generally associated with the creation of numerous products including the light bulb, the phonograph, the movie camera, the X-ray machine and the electric generator. In fact, Thomas Alva Edison was not so much an inventor as a brilliant entrepreneur with a fascination for innovation and new technology. Many of the modern conveniences for which he is credited were not actually discovered by Edison, but he was the first person to realize their potential, to acquire or patent the technology. This he then exploited with a ruthless commercial zeal which made him one of America's most feared businessmen, as well as among its most admired.
The Edison Electric Light Company was founded in 1878, and patented the first carbon filament lamp bulb two years later. Within 10 years, the company had become one of the country's foremost technological innovators, and changed its name to Edison General Electric Company to reflect its range of products. However Edison's success inspired many rivals. One of the most impressive was Thomson-Houston, which combined the scientific skills of inventor Elihu Thomson with the managerial ability of its chairman Charles Coffin. In 1892, Thomson-Houston and Edison General Electric merged, with Coffin appointed as its first chairman. (Although he remained a significant shareholder, Edison resigned as a director two years later, and subsequently busied himself with other inventions including the first moving picture camera system, dictaphone and mimeograph copier.)
Backed by New York financier JP Morgan, General Electric expanded rapidly, unveiling a string of new innovations which revolutionized society. The first electric fan (1902), the biggest ever steam turbine (1903), the first electric toaster (1905), the first spoken radio broadcast (1906), the first compressor refrigerator (1909). In 1910 the company launched its first range of cooking ranges under the brand name Hotpoint. Later innovations included electric washing machines, air-conditioning systems and more. In 1919, the company teamed up with Westinghouse to form the Radio Corporation of America (RCA), manufacturing wireless radio sets. Later it pioneered the first "radio photo", which was to form the core of television broadcasting. At the same time, under Charles Coffin, General Electric set down principles of corporate management that continue to this day. Among the most important of these was the belief that it the company's most important asset was not the products it made, but its managerial talent.
Rapidly the company found itself operating across three main sectors. Domestic appliances proved hugely popular as the company introduced ordinary homes to a variety of labour-saving devices. Meanwhile the company's industrial and research division was a pioneer in the development of X-ray technology, engines, turbines and industrial plastics. And the demand for radio broadcasting was soaring as Americans acquired the company's wireless sets. In 1926, RCA established the National Broadcasting Company to produce professional programming for this rapidly growing audience. However in 1930, as a result of an anti-trust ruling from the US government, GE was obliged to sell off its stake in RCA. The group refocused on its industrial and consumer appliance divisions, establishing The General Electric Credit Corporation in 1932 to help consumers finance their purchase of GE appliances. This was to prove the foundation of an important new business in consumer finance.
Over the next forty years, General Electric became a dominant force in US industry, pioneering developments in jet engines, industrial plastics and diamonds, medical imaging, lasers and even space exploration. Yet by the 1980s the company had become overly bureaucratic and too widely spread, and profitability was suffering. Jack Welch was appointed as chief executive in 1981 and he set about focusing the business on high margin sectors, as well as decentralising the labyrinth of separate operating divisions. Poorly performing businesses were sold or closed; others were reinforced with acquisitions. The financial services business was bolstered with the purchase of Employers Reinsurance (in 1984), investment bank Kidder Peabody (in 1990, sold 1994) and mutual fund manager GNA (in 1993); the medical imaging arm was strengthened with CGR Medical Equipment in 1988. But above all the group moved back into media, reacquiring RCA and NBC in 1986.
Welch's greatest skill in the twenty years that he ran General Electric was an astonishing ability to ride the dips and troughs of the economy, without ever diminishing GE's size. While just about every one of GE's competitors faced serious challenges at one point or other during the 1980s and 1990s, Welch led his company through those two decades almost without blemish, transforming the company from an old economy dinosaur with sales of $28bn in 1981 to a surprisingly agile super-conglomerate with sales in 2000 of over $129bn. His mantra consisted of four major strategic goals: globalization, digitization, a focus on services and a quality control program branded as Six Sigma. On the back of these he delivered an unparalleled run of profit growth. In 20 years, General Electric increased annual net earnings every single year (despite a brief plateau in 1990, and occasional reductions in the scale of expectations).
Facing retirement, Welch unveiled what looked set to be the most impressive deal of his long career at GE in October 2000. The group derailed a bid from United Technologies for rival industrialist Honeywell, offering a staggering $48bn in stock and debt to clinch an agreed merger. A combined GE-Honeywell would have been a mammoth industrial group, with sales of almost $160bn. Although approved by US authorities, the deal was ultimately vetoed by European regulators in 2001 because of the size of the two group's combined aircraft manufacturing arms. As a result a disappointed Welch finally stood down from GE in September that year. His last deal for the group was to approve the $5.3bn purchase of finance house Heller Financial.
Welch's successor Jeff Immelt was immediately faced with the biggest challenge GE had encountered since the 1970s. The terrorist attacks on the US in September 2001 had serious implications for the group's Employers Reinsurance Corporation arm, one of several insurers covering the World Trade Center, as well as the aircraft used in the attacks. Both NBC and GE's aircraft engine businesses were also expected to experience reduced earnings. The group was forced to issue its first profit warning since 1994. The following year Jack Welch's shining reputation was more than a little tarnished when his wife divorced him for conducting an affair with the editor of the Harvard Business Review. She also revealed in court that GE had agreed a handsome retirement package for Welch, including benefits ranging from use of a private jet to membership at America's most exclusive golf course. Coming in the wake of corporate scandals at Enron and Worldcom, the details were seized upon by the US press. Welch subsequently agreed to give up all but the office and administrative support offered by GE.
As a result of the continuing drain on its resources contributed by the insurance arm, GE spun off most of that business as Genworth Financial in 2004, and sold the remainder to Swiss Re a year later. See full profile for current activities
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