ge.com

Overview

 From turbines to TV, from household appliances to power plants, General Electric (GE) is plugged in to most of the businesses that have shaped the modern world. The company produces -- take a deep breath -- aircraft engines, locomotives and other transportation equipment, kitchen and laundry appliances, lighting, electric distribution and control equipment, generators and turbines, and medical imaging equipment. GE is also one of the preeminent financial services companies in the US. General Electric Capital, comprising commercial finance, consumer finance, aircraft leasing, and energy financial services, represents the company's largest segment. Other operations include the NBC television network.

Although financial services is its biggest segment, the company's raison d'etre for most of its existence has been its appliances unit. In 2008 the company announced plans to sell or spin off its appliance manufacturing business. GE cited slow growth and a too-volatile market of late, as every sector related to residential construction and real estate has taken a hit from the residential meltdown. LG Electronics, Haier Group, Electrolux, and Controladora Comercial Mexicana are among the candidates thought to be interested in buying the appliance business.

Preparing for the spinoff of its consumer products operations, GE in 2008 reorganized around its four core businesses: GE Capital, GE Technology Infrastructure (including the company's health care, aviation, and transportation operation), GE Energy Infrastructure (energy, oil and gas, and water), and NBC Universal (80% owned).

CEO Jeff Immelt is emerging from the considerable shadow of his predecessor, Jack Welch, by not being shy about making sweeping changes. He has diverged somewhat from Welch's slavish obsession with the bottom line and encourages managers to innovate and take more risks. As a result, GE has been growing in such areas as biotech, renewable energy, nanotechnology, and digital technology. Immelt has, however, taken a page from his former boss' playbook by pursuing growth outside the US, particularly in emerging markets like India, China, Eastern Europe, Africa, and the Middle East.

Immelt has set about reshaping GE, spinning off its life and mortgage insurance businesses into a new entity, Genworth Financial, which went public in 2004; it completely divested its remaining stake in Genworth in 2006. Also that year, GE sold off most of its remaining insurance businesses, including GE Insurance Solutions and Employers Reinsurance, in a sale to Swiss Re. The company kept its US life reinsurance business.

Citing rising commodities costs, GE sold its advanced materials unit, which produced silicone, quartz, and ceramics products, to Apollo Management, and sold its GE Plastics unit (now SABIC Innovative Plastics) to SABIC for more than $11 billion in 2007. Also that year GE shut down the operations of wholesale subprime lender WMC Mortgage.

Meanwhile, GE has been building some of its traditional businesses through acquisitions. In early 2007 the company's aviation division acquired aircraft systems manufacturer Smiths Aerospace from Smiths Group. GE Energy bought oil and gas production equipment supplier Vetco Gray and US retail natural gas distribution network of Kinder Morgan, while GE Industrial acquired Microwave Data Systems.

Later in 2007 the company announced that it would buy PHH Corporation; GE had planned to acquire the company's fleet management unit, PHH Arval, and sell PHH Mortgage to Blackstone Group. However, the entire transaction fell through early the following year when Blackstone could not secure financing for the deal.

In 2008 the company established a joint venture with Abu Dhabi investment company Mubadala Development to provide commercial financing in the Middle East and Africa. The deal is part of its move away from the volatile consumer lending sector and into expanding businesses and geographic regions.

Amid uncertainty in the financial markets, GE is looking to reduce its reliance on its financial services business and plans to make further acquisitions in its infrastructure and health care sectors.

Basic Financial Information

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Company History

 General Electric (GE) was established in 1892 in New York, the result of a merger between Thomson-Houston and Edison General Electric. Charles Coffin was GE's first president, and Thomas Edison, who left the company in 1894, was one of the directors.

GE's financial strength (backed by the Morgan banking house) and its research focus contributed to its initial success. Early products included such Edison legacies as light bulbs, elevators, motors, toasters, and other appliances under the GE and Hotpoint labels. In the 1920s GE joined AT&T and Westinghouse in a radio broadcasting venture, Radio Corporation of America (RCA), but GE sold off its RCA holdings in 1930 because of an antitrust ruling.

By 1980 GE had reached $25 billion in revenues from plastics, consumer electronics, nuclear reactors, and jet engines. But it had become rigid and bureaucratic. Jack Welch became president in 1981 and shook up the company. He decentralized operations and adopted a strategy of pursuing only high-achieving ventures and dumping those that didn't perform. GE shed air-conditioning (1982), housewares (1984), and semiconductors (1988), and with the proceeds acquired Employers Reinsurance (1984); RCA, including NBC (1986, but sold RCA in 1987); CGR medical equipment (1987); and investment banker Kidder, Peabody (1990).

In the early 1990s GE grew its lighting business. It bought mutual fund wholesaler GNA in 1993, and GE Investment Management (now GE Financial Network) began selling mutual funds to the public.

GE sold scandal-plagued Kidder, Peabody to Paine Webber in 1994. General Electric Capital Services (GECS) expanded its lines, buying Amex Life Insurance (Aon's Union Fidelity unit) and Life Insurance Co. of Virginia in 1995 and First Colony the next year. The company sold its struggling GEnie online service in 1996 and formed an NBC and Microsoft venture, the MSNBC cable news channel. In 1997 GE Engine Services bought aircraft engine maintenance firms Greenwich Air Services and UNC.

GE acquired Lockheed Martin's medical imaging unit in 1997 and added to the medical systems business with the 1998 purchase of Marquette Medical Systems. In 1998 GECS became the first foreign company to enter Japan's life insurance market when it bought assets from Toho Mutual Life Insurance and set up GE Edison Life.

In 1999 GECS bought the 53% of Montgomery Ward it didn't already own, along with the retailer's direct-marketing arm, as Montgomery Ward emerged from bankruptcy. (Ward declared bankruptcy again in 2000.) In 2000 it reorganized GE Information Systems to form an e-commerce unit, Global eXchange Services (GXS). (GE sold 90% of GXS to buyout firm Francisco Partners in 2002.)

Later in 2000 the company announced its biggest acquisition of the Welch era. Moving in at the last minute, GE trumped a rival bid from United Technologies and agreed to pay $45 billion in stock for manufacturing giant Honeywell International and to assume $3.4 billion in Honeywell debt.

Welch, by then viewed as one of the best corporate leaders in the US, had agreed to postpone his retirement from April 2001 until the end of that year in order to oversee the completion of the Honeywell acquisition. But European regulators, concerned about the potential strength of the combined GE-Honeywell aircraft-related businesses, blocked the Honeywell deal that summer. Welch then stepped down, and Jeff Immelt, formerly president and CEO of GE Medical Systems, succeeded him in September 2001.

Also in 2001 GE Capital expanded by buying commercial lender Heller Financial for $5.3 billion. The next year former business segment GE Industrial Systems acquired electronic security company Interlogix for $777 million.

In 2004 GE acquired UK-based Amersham, a medical diagnostics and life sciences company now called GE Healthcare Bio-Sciences.