Thread Number: 75863  /  Tag: Other Home Products or Autos
Breaking up of GE
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Post# 997109   6/14/2018 at 06:06 by Tomturbomatic (Beltsville, MD)        

GE is slowly dismantling an empire.

It was once a sprawling corporation that included NBC, Universal Studios, a giant appliance company and even one of America's biggest banks.


But now the iconic company founded by Thomas Edison is making itself smaller and smaller. And that shrinking has gained urgency in recent months as GE races to raise cash, chip away at a mountain of debt, and plug a huge hole in its pension fund.


No business is too sacred for the chopping block, especially because GE's stock price has been cut in half over the past two years. Even businesses central to its vaunted history — the 111-year-old railroad division and Edison's light-bulb unit — are up for grabs.



1981 to 2001

Jack Welch

Welch built GE into a super-conglomerate that enjoyed enormous financial success, but his push into banking dealt the company a nearly fatal blow in 2008.

2001 to 2017

Jeff Immelt

Immelt guided GE through 9/11 and the 2008 financial meltdown, but poorly timed deals on his watch have wrecked the company’s balance sheet and sparked a cash crisis.

2017- present

John Flannery

Flannery, a 30-year veteran of GE, has been forced to raise cash by slashing the dividend and attempting to auction off the iconic rail and light-bulb businesses.


"This is a slow-motion break-up of the company," said Robert McCarthy, an analyst at Stifel.


In the 1980s and 1990s, legendary CEO Jack Welch turned GE into the biggest and most complex conglomerate on the planet. Now the new boss, John Flannery, is trying to fix the company by doing the exact opposite.


"Our objectives are to run the businesses well, make the portfolio stronger, simpler and continue to work as hard as we can to earn back your trust and to deliver for you," Flannery told disappointed shareholders last month.

The sell-off amounts to a rejection of the conglomerate model itself. GE wants to focus its attention on what it believes it does best: making power plants, jet engines and health care products like MRI machines.



Me: The whole story including the 2016 selling of the appliance div. to Haier is at the link.  GE treated their employees poorly so maybe the rich investors who made money off that can lose money now. I was told that nobody was promoted from the assembly floor to management of that department; they always brought in someone with no history to run things.


As an aside, I read in Tuesday's Wall Street Journal that in 2016, twice as much money was going to construction of renewable energy production infrastructure like wind and solar than to traditional generating methods using some form of energy like heat or falling water.

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Post# 997115 , Reply# 1   6/14/2018 at 06:45 by vacerator (Macomb, Michigan)        
I don't know what to think or believe anymore.

Those with the gold rule. They manipulate and deflect. They have the real power.
They use politicians for pawns, as well as the public. They really don't care who is in office. The Govt. plays along, acting like they have control. They care mainly about being re elected.
GE capitol is gone, Haier owns the white goods division.
Maybe they can raise cash by selling more of those portable power plants to island nations. Maybe they can start with Puerto Rico. Federal funding perhaps, or a tax abatement?
Now before our potus shoots off the mouth or sends more paper towels, he got tax abatement's for the Grand Hyatt, and the first Trump tower. Our taxes also paid off his bankruptcies. At least the legal and court costs.

Post# 997118 , Reply# 2   6/14/2018 at 07:21 by vacerator (Macomb, Michigan)        
One question as well;

So what happened to the $2 billion or so GE made by selling the white goods division to Haier?

Post# 997214 , Reply# 3   6/15/2018 at 04:08 by arbilab (Ft Worth TX (Ridglea))        

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If Westinghouse were still alive and had copyrighted that story when it happened to them, they could sue GE for infringement/plagiarism.


I think whatever Hawvahd Biznis et al have been teaching since the 80s, should be ceremonially burned.  For starters.  Then the entire concept of 'board of directors' closely examined.  A dozen "biznis jeanyessez" should have been cracking knuckles long before these situations reached disaster proportions.


Oh, and these bumblers are the most highly-rewarded figures in the public economy.  By 'highly' we mean paid between 70 and 300 times the average pay of their respective underlings.  Then after destroying the company, paid 7 or 8 figures just to get rid of them. 


What the expletive?

Post# 997217 , Reply# 4   6/15/2018 at 04:20 by vacerator (Macomb, Michigan)        
Oh, absolutely.

American high up execs earn way more than in most other countries. Or, art least they pay higher taxes which then trickle down in benefits to the lesser earning working class public. Wether it is in healthcare, mass transit, education, or better housing, and or elder care.
The first govt. bail out was Lockheed in 1976, because the L 1011 jet did not sell well. If you've ever flown one one, as I, and don't get why. That was an awseome plane.
Next was Chrysler in 1979, but Lee Iacoca repaid the Govt. back 100%, early in fact. You see, back then, the average person could still afford to pay for a new car in 3 or 4 years. The K cars loaded up were not over $5,500.00 or so. So they weren't world class yet. Baby steps. The US auto industry caught up by 1987 or so.

Post# 997294 , Reply# 5   6/16/2018 at 01:40 by tolivac (greenville nc)        

GE now has two locomotive building sites-the old original one in Erie.PA and a new state of the art semiautomated plant in Fort worth Texas.It was completed and put to use less than a few years ago.A WEIRD thing EMD locomotive division was bought up by Caterpillar and moved back to Illinouis from Canada.The Canadians aren't happy with Cats decision.Their site was closed down.The GE plant in Erie is still in use.No plans to close it.The "Cat" paint jobs on their new EMD locos is kinda beautiful.

Post# 997298 , Reply# 6   6/16/2018 at 02:22 by speedqueen (Harrison Twp, Michigan)        

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To think at one time they bought all of RCA just to get NBC, everything else from record labels, to electronics, and David Sarnoff Labs, they sold off. I think that was a very big loss, part of the reason why there are no US owned(let alone manufactured) consumer electronics.

Post# 997369 , Reply# 7   6/16/2018 at 19:32 by superocd (PNW)        

Samsung, LG, Hitachi and Mitsubishi are eventual candidates to be what GE "used to be." They all are large conglomerates and are very similar to GE's (soon to be former) diversification.

It's always sad to see a American company becomes a former shell of itself, even if I don't hold any shares in that company specifically. GE, Sears, our automakers, our steel industries, et cetera, et cetera...they all had a major part in the modernization of our country and creating a higher standard of living. They were pioneers of industry to the rest of the world.

It has become a trend over the past decade or two. I think instant gratification re: many of the "big fish" shareholders and buybacks have a lot to do with it. They'd rather realize a quick, large gain over the short term, causing gradual, long term declines.

Post# 997895 , Reply# 8   6/21/2018 at 01:17 by potatochips (Nova Scotia)        

I knew for sure there was something serious up with GE when they sold off their industrial chemical and water conditioning side to Suez in 2016. GE bought Betz in the late seventies and formed GE Betz. This company was thee authority on water conditioning and chemicals.

Post# 997902 , Reply# 9   6/21/2018 at 05:44 by Frigilux (The Minnesota Prairie)        

And now GE has been booted from the Dow Industrial---to be replaced by Walgreens, no less.


Post# 997907 , Reply# 10   6/21/2018 at 06:30 by vacerator (Macomb, Michigan)        
Some are blaming

Immelt, etc., and liberally operated ethics. Immelt is on the other side in fact.
It does seem like global factions are becoming the norm. Haier may be the main global white goods supplier. The bigger they get, the more they can swallow, but if or when they fall, they fall very hard, unless they are govt. managed.
Beats me if it's a pattern or not of the future.
Look at China. Mostly still communist state run, but you can have a business now,
become very wealthy, but that is the minority still. At least they have an emerging middle class. No one will ever convince me there is a better system than how ours was. When people have a goal to aspire to, like from poverty to middle class, and it is attainable with a moderate amount of good honest work, and or education, everyone else is better off. The wealthy make lots of money, and the middle class majority are able to help the less fortunate as well as the rich are.
Countries like Mexico which have only two classes, rich, and poor cause global strife. Their poor good people try to flee here, and gangs, and drug lords flourish there. Of course they have their US cartel members here as well.
Mexico needs to address it's own problems, not pay for our wall.
The US may also be an enabler of this condition by taking advantage of their extremely cheap labor. Most Mexicans employed there by US companies take pride in their work. Some are middle class today, or near, but not enough.
Now, suppose Mexican workers were legally allowed to pursue collective bargaining, and raise their wages, and thus, standard of living? Well, they are not allowed to. So you say what you want about labor unions, they were not all bad. It's a two way street. Give, and take.
Plants in Mexico, etc. would need at least 4 shifts if their workers could afford to buy what they make. Not enough hours in a day.
The USA is, or was a pinnacle for human rights. Prosperous, happy, thriving. We all have the same rights here now. Even newer Americans tell me this. They Love it here, and America, as I do, my native home.
When we prosper as a nation, we are able to help developing nations, but they also must have leadership which is compassionate of human rights.
Make enough people poor, and they will resort to gangs, drug trafficing, human trafficing, murderous acts, terror, etc., etc.
So what will we do here in our own future, and abroad?
Can we be allowed to lead our selves, or will we sink into social despair because of poverty and violence only to be a police state?
Garbage rolls down hill. How will we roll? People in parts of Mexico, Guatemala, etc.,etc. don't know if they will see their children or parents that evening.
If we want peace, we must be a promoter of peace.
Now, not allow other nations to walk over us by any means. Are we allowing Mexico to do so by enabling their socio economic condition?

Post# 998086 , Reply# 11   6/22/2018 at 22:51 by fan-of-fans (Florida)        

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Remember hearing once that the ideology of GE is if they couldn't be first or second in something, they didn't want it.

In the 70s GE started pulling out of a lot of small appliances mfg, eventually they sold their small appliances to Black and Decker in 1984.

You often heard of GE in the finance and healthcare sectors. Can't remember the last time I saw a commercial for GE appliances, probably in the 90s. But remember lots of recent ones for aviation and health care.

Agreed with the post above, copying Westinghouse's strategy.

Post# 998112 , Reply# 12   6/23/2018 at 05:41 by vacerator (Macomb, Michigan)        
I've seen GE appliance

tv adds very recently for their slate grey, black stainless, and other new color.
Home Depot had a Haier SxS fridge displayed near the GE's for a short while.
It was small, and had a high price.

Post# 998497 , Reply# 13   6/27/2018 at 00:11 by superocd (PNW)        

Sad, sad, sad. Never in a million years would I have thought that a titan like GE would have ever been delisted from the NYSE, with a retail drugstore taking its place in the standings.

Now I'm wondering if GE as we know it will go away. I mean, the GE name will obviously live on, but will the parent company even exist 10 years from now? Is it doomed to be another Westinghouse, where only the name exists on nuclear generation equipment (manufactured by Toshiba), cheap TVs, lightbulbs and BOL stoves and fridges that show up every once in a while at Lowe's?

I'm also wondering what lurks on the horizon for our economy. Overall, are doing well for right now, but with the tariffs and all, I'm not sure if that trend will continue. Many economists and US-based manufacturers are saying this is a terrible idea. New-home prices are rising again but this time it's not necessarily due to demand but the fact that the raw materials (Canadian wood products, primarily) are going to cost more. As for GE, I'd imagine it wouldn't make life any easier for them either.

Post# 998505 , Reply# 14   6/27/2018 at 04:00 by neptunebob (Pittsburgh, PA)        
I would hope that the Power division...

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Would become the new General Electric as that would be the most appropriate name for that equipment. Maybe the aviation division might be called something like GE Aerospace like GE Appliances and the health care division might get another name altogether, all 3 being standalone companies.

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