The Fall of GE

For decades, General Electric was the number one company to study in business school. As recently as 2014, GE ranked as the top global company for leadership. GE market value has plunged to only $67 billion. It was worth $260 billion just two years ago.

GE has lost $500 billion from its peak value in 2000.

As of 2018, GE operates through the following segments: aviation, healthcare, power, renewable energy, digital, additive manufacturing, venture capital and finance, lighting, transportation, and oil and gas.

In 2018, GE ranked among the Fortune 500 as the 18th-largest firm in the U.S. by gross revenue. In 2011, GE ranked among the Fortune 20 as the 14th-most profitable company. As of 2012, the company was listed as the fourth-largest in the world among the Forbes Global 2000.

GE has fallen below the value of Seimens.

In mid-September, GE had problems in its critical power segment business. GE’s flagship gas turbine was suffering from an oxidation issue. A customer had to temporarily shut down two U.S. power plants.

GE has a lot of debt and has had large asset sales and two different breakup plans.

A confidant of CEO Culp said:

At the end of the process GE will look like a shell of what it used to be, but it will survive…As long as there is a debt pile that risks bring the company down, GE will keep on selling.

GE Still Number one in jet Engines

GE is the world’s biggest manufacturer of jet engines for the globe’s most common airplanes. It makes both its own engines and some of the most widely flown under its joint venture, CFM International, with France’s Safran. GE has about a 70 percent share of engines that power narrow-body jets, the most widely produced airplanes. GE’s aviation business competes with United Technologies unit Pratt & Whitney and Rolls Royce.

GE Aviation made 27.4 billion in revenue. About $20 billion was from commercial engines and related products and services and $3.84 billion was from military engines and related products and services.

Overall Market is down 17%

The overall stock market is down 17%. This is the third biggest drop since 1990.

Loss of GE Capital

The GE Capital segment nearly bankrupted GE during Great Recession of 2008. GE Capital did not have competitive advantage over other financial services companies.

54 thoughts on “The Fall of GE”

  1. this is a worthless article written or assembled by someone with no business savvy or sabe or gabe or gabby and neglects to mention that in all likelihood if you buy GE now it will probably, not guaranteed, but probably rise to $10 to $12 per share in the short term, less than 120 trading days. cheers love the science stay away from business.

    Reply
  2. Such a list would be interesting.

    I’ll have a go at a start.

    Education
    Construction
    Some parts of medicine
    Consumer level real estate
    Airports
    I’ll note that a common theme seems to be extensive government control, which would tend to lock in out-of-date practices.
    Some non-government stultified (as far as I know) examples.

    High end retail (low end already highly disrupted by on-line selling)
    Restaurants

    Reply
  3. Fair point. First company that can retrofit power plants with supercritical CO2 turbines will make a good deal from plant uprates.

    Reply
  4. Consumer spending is 2/3 of the economy, and that’s long been known. Amazon has cashed in by creating efficiencies there, just like Wal-Mart did before them. But as the easy opportunities are sopped up, there’s less progress on the more difficult fronts which have long been stagnant. At least we can admire Musk for trying to break new ground on some of these areas, unlike others.

    Has anybody ever bothered to come up with a list of long-stagnant industrial sectors, which would be ripe for disruption?

    Reply
  5. It’s like the chipmakers when Moore’s Law ran out. The businesses GE’s invested in are very high-capital investments at the limits of their technological performance, where it’s hard to eke out further improvements.

    Maybe it’s time to form industry consortiums, where the big rivals can pool their resources to come up with some further ground-breaking advances to grow the pie for all.

    Reply
  6. GE should go ‘all in’ on the turbine sector. There is plenty of room for improvement, if you can get the union to play ball. Sorry to say that the unions have caused most of the inefficiencies at GEAE. Maximizing membership prevents common-sense automation. I know this to be true from first-hand observation. I am part of the GE family.

    Reply
  7. Apple will be another example of fall with lack of completion. GE Engine technology will also be surpassed over by the new japanese engine(they are smaller) very soon.

    Reply
  8. Jack Welch has been the manager of the century according to all US universities and all US Forbes and fortune publications. He is the mot studied CEO in US History
    You should ask your papa or mama or, when you will become 13 years old, open the internet and read about Neutron Jack, he is studied in all economy classes in the US.
    Grow up and then talk .

    Reply
  9. No, this is cannibalism. It is obvious by your comments that you are an uneducated troll so I wont’ waste any more time on you. Try to get our of your mother’s basement some more.

    Reply
  10. Those bad people did not move one finger when people in Vietnam or Iraq really suffered
    Let them lose their job and their homes, I will not be crying at night because of this .

    Reply
  11. Sad. Lots of people out of work. Lost good paying jobs. Family disruptions, moves, family budget cuts. Communities shifted. People bought stock in a solid company, now retirement money savings is less. Our mining is down as less raw materials used. “When elephants dance, ants suffer.”

    Reply
  12. Kind of like a supernova, blow off all of your energy and all that’s left is a cinder. I was there for a lot of the Jack years, he was a POS who would have sold his mother. The man could make deals but had no heart or soul. Lies were told, shortcuts were taken, accounting tricks were used to make numbers, jobs were exported, Indian engineers were “rented’ and worked like rented mules and people were pushed to forgo their families and work crazy hours. May Jack rot in Hell. SOON!

    Reply
  13. It definitely does have as it is non-productive investment for the most part
    The billions wasted for the development of the F35 (most of them money given to the lobbies ) is unproductive as it goes to bribes for the MIC honchos.
    Chinese use the same money to grow and they are screwing the US in both ways

    Reply
  14. This is what happens when you put a bunch of bean counters in charge of an engineering manufacturing company. Clueless fools who compete to give each other bigger bonuses.

    Reply
  15. In the final analysis, no business model can replace vision and leadership in staying at the forefront of game changing technologies. In the GE example, if they were, they would be developing now nuclear, electrical and multi hybrid jet to scram engines for the aerospace industry.

    Reply
  16. If you can build a case that it will not be completely de-listed from the stock exchange which is the usual trajectory of companies that were removed from the DJIA. his company has major issues and even not reporting the full extent thereof in their financial reports. GE capital is substantially burning through GE’s capital at breath taking speed. Add the plethora of other issues going on with the company and this thing may very well be joining westinghouse electric on the road to oblivion. If I had a broker or an analyst pumping this stock I would fire him instantly, if I had a fund that was holding too much of this company I would change funds. Before anyone wastes their hard earned money on this stock you might visit yahoofinance/ge/major holders and see how the largest funds on the planet are dumping billions of shares most recently.

    Reply
  17. spending money on military shouldn’t have an effect on American industry. Unless industry was having trouble getting money but that hasn’t been a problem yet.

    Reply
  18. And this is great news!
    The whole US manufactring business is now going over seas to China which will lead
    I mean, they are already leading in most segments a part from jet turbines
    But they will kill the US in that too
    Let` s hope that the US will keep wasting money on their F35 project while China kills them in the business

    Reply
  19. Such a list would be interesting.

    I’ll have a go at a start.

    Education
    Construction
    Some parts of medicine
    Consumer level real estate
    Airports
    I’ll note that a common theme seems to be extensive government control, which would tend to lock in out-of-date practices.
    Some non-government stultified (as far as I know) examples.

    High end retail (low end already highly disrupted by on-line selling)
    Restaurants

    Reply
  20. Consumer spending is 2/3 of the economy, and that’s long been known. Amazon has cashed in by creating efficiencies there, just like Wal-Mart did before them. But as the easy opportunities are sopped up, there’s less progress on the more difficult fronts which have long been stagnant. At least we can admire Musk for trying to break new ground on some of these areas, unlike others.

    Has anybody ever bothered to come up with a list of long-stagnant industrial sectors, which would be ripe for disruption?

    Reply
  21. It’s like the chipmakers when Moore’s Law ran out. The businesses GE’s invested in are very high-capital investments at the limits of their technological performance, where it’s hard to eke out further improvements.

    Maybe it’s time to form industry consortiums, where the big rivals can pool their resources to come up with some further ground-breaking advances to grow the pie for all.

    Reply
  22. GE should go ‘all in’ on the turbine sector. There is plenty of room for improvement, if you can get the union to play ball. Sorry to say that the unions have caused most of the inefficiencies at GEAE. Maximizing membership prevents common-sense automation. I know this to be true from first-hand observation. I am part of the GE family.

    Reply
  23. Jack Welch has been the manager of the century according to all US universities and all US Forbes and fortune publications. He is the mot studied CEO in US History
    You should ask your papa or mama or, when you will become 13 years old, open the internet and read about Neutron Jack, he is studied in all economy classes in the US.
    Grow up and then talk .

    Reply
  24. No, this is cannibalism. It is obvious by your comments that you are an uneducated troll so I wont’ waste any more time on you. Try to get our of your mother’s basement some more.

    Reply
  25. Sad. Lots of people out of work. Lost good paying jobs. Family disruptions, moves, family budget cuts. Communities shifted. People bought stock in a solid company, now retirement money savings is less. Our mining is down as less raw materials used. “When elephants dance, ants suffer.”

    Reply
  26. Kind of like a supernova, blow off all of your energy and all that’s left is a cinder. I was there for a lot of the Jack years, he was a POS who would have sold his mother. The man could make deals but had no heart or soul. Lies were told, shortcuts were taken, accounting tricks were used to make numbers, jobs were exported, Indian engineers were “rented’ and worked like rented mules and people were pushed to forgo their families and work crazy hours. May Jack rot in Hell. SOON!

    Reply
  27. It definitely does have as it is non-productive investment for the most part
    The billions wasted for the development of the F35 (most of them money given to the lobbies ) is unproductive as it goes to bribes for the MIC honchos.
    Chinese use the same money to grow and they are screwing the US in both ways

    Reply
  28. This is what happens when you put a bunch of bean counters in charge of an engineering manufacturing company. Clueless fools who compete to give each other bigger bonuses.

    Reply
  29. In the final analysis, no business model can replace vision and leadership in staying at the forefront of game changing technologies. In the GE example, if they were, they would be developing now nuclear, electrical and multi hybrid jet to scram engines for the aerospace industry.

    Reply
  30. If you can build a case that it will not be completely de-listed from the stock exchange which is the usual trajectory of companies that were removed from the DJIA. his company has major issues and even not reporting the full extent thereof in their financial reports. GE capital is substantially burning through GE’s capital at breath taking speed. Add the plethora of other issues going on with the company and this thing may very well be joining westinghouse electric on the road to oblivion. If I had a broker or an analyst pumping this stock I would fire him instantly, if I had a fund that was holding too much of this company I would change funds. Before anyone wastes their hard earned money on this stock you might visit yahoofinance/ge/major holders and see how the largest funds on the planet are dumping billions of shares most recently.

    Reply
  31. And this is great news!
    The whole US manufactring business is now going over seas to China which will lead
    I mean, they are already leading in most segments a part from jet turbines
    But they will kill the US in that too
    Let` s hope that the US will keep wasting money on their F35 project while China kills them in the business

    Reply

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