General Electric Company

General Electric (abbreviation: General Electric) GE ([ˈdʒɛnəɹəl ɪˈlɛktɹɪk], General Electric) is an American diversified corporation, manufacturer of many types of equipment, including aircraft engines, power plants (including nuclear reactors) and gas turbines, in the past also produced medical equipment, photographic equipment, household and lighting equipment. plastics and sealants, as well as a wide range of military products, from small arms and armored vehicles to military space systems and nuclear warheads.

The company has been headquartered in Boston (Massachusetts, USA) since 2016.

The company was founded in 1878 by inventor Thomas Edison and Grosvenor Lowry; it was originally called Edison Electric Light, as the purpose of its creation was to develop a lighting system using electricity (rather than kerosene, as was common at the time). The two main elements of this system were invented in 1879, the light bulb, in which a current heated a charred bamboo thread, and the dynamo (direct current generator). For the first time, such a system was installed on the steamship Columbia in 1880. At the same time, Elihu Thomson and Edwin Huston were engaged in similar research, but they used an arc lamp and alternating current for lighting. In 1892, their Thomson-Houston Electric Company merged with Edison's company under the name General Electric Company, and its shares were immediately listed on the New York Stock Exchange. In the same year, Edison left the company, and in 1894 he sold his shares in it, remaining only as a consultant. The first president of the combined company was Charles Coffin of the Thomson-Houston Company. In addition to lighting, the company was also involved in the electrification of railways, trams, alternators, and power lines. The only serious competitor was Westinghouse Electric, but a patent exchange agreement was concluded with them in 1896. In 1900, in Schenectady, New York, the company established the first industrial laboratory in the United States. In 1903, the Stanley Electric Manufacturing Company, a manufacturer of transformers, was bought (its founder, William Stanley, had invented the transformer). In 1904, metallized coal was used instead of bamboo thread, and tungsten thread was used a few years later, after William David Coolidge, a researcher at the company, found a way to make refractory metals more malleable. In 1913, Coolidge invented the vacuum X-ray tube (the Coolidge tube), and Irving Langmuir, also of General Electric Laboratories, discovered that lamps filled with an inert gas lasted longer and did not darken over time. In 1901, the company produced the first working high-speed steam turbine (500 kW at 1200 revolutions per minute, before that turbines operated at a speed of about 100 revolutions per minute). In 1903, the company installed a 5 MW turbine in Chicago, and by 1910, the total capacity of the generators sold by the company reached one million kW annually. The range of electrical goods was also expanded, a toaster was added to light bulbs and fans in 1905, an industrial refrigerator in 1911, and an experimental household refrigerator six years later; Mass production of household refrigerators began in the late 1920s.

In 1919, General Electric, along with AT&T and Westinghouse, established the Radio Corporation of America (RCA), and in 1922 launched its own radio station, WGY. Also at this time, General Electric's laboratory improved the vacuum tube, loudspeaker, and sound recording technology. Collaboration with the U.S. Department of Defense began in 1913 when the company was tasked with developing a turbine-powered vessel; In 1915, the first such vessel was launched. Also, in a few years, the company electrified the entire U.S. Navy. However, the company was also subject to antitrust prosecutions: in 1924, the company was forced to sell its utility power plants, and in 1930 it withdrew from the Radio Corporation of America.

In the late 1920s and early 1930s, the company introduced mixers, vacuum cleaners, air conditioners, washing machines, and dishwashers; In 1932, the Household Appliances Purchase Credit Division was founded. Also in 1932, Irving Langmuir received the Nobel Prize for his research in surface chemistry. In the 1930s, the company developed the rectifier, cathode ray tube, mercury lamp (1934), fluorescent lamp (1938), and other innovations. In 1939, General Electric demonstrated to the Federal Telecommunications Commission the advantages of frequency modulation (FM) over amplitude modulation, and the following year the first FM radio station was launched.

During the Second World War, the company's revenue quadrupled, GE produced more than 50 different types of radars, and produced more than 1,500 power plants for military and merchant ships. In 1942, the first jet engine was tested, the same year the first jet aircraft in the United States, the Bell XP-59, was produced, and by the end of the war, the company had developed a turbojet engine.

After the end of the war, the company returned to civilian production, but the antitrust committee found that GE accounted for 85% of sales of light bulbs (55% of its own production and another 30% under license); In 1949, the company was obliged to transfer the patents related to them to other companies. In the 1940s, the technology for producing silicones in large quantities was developed in the GE laboratory, and a factory was opened in 1947; Silicones are used in the production of sealants and lubricants. Also in the mid-1940s, the laboratory began research in the field of nuclear energy, in 1955 the nuclear submarine Seawolf with a reactor manufactured by General Electric was launched. In 1957, the company received a license to build a nuclear reactor, the first private nuclear power plant in the United States. Also this year, the construction of a large plant for the production of household appliances in Louisville (Kentucky) was completed. Developments in the 1950s included an autopilot for jet aircraft, Lexan polycarbonate resin, the first all-transistor radio, gas turbines for power plants, and technology for the production of industrial diamonds. The least successful project of the decade was the entry into the computer market, and the computer division was sold to Honeywell in 1971.

In 1961, GE was the largest of 29 companies accused of cartel in the electrical equipment market, the company was fined $500,000, another $50 million was paid to utility companies that bought equipment at inflated prices, several executives were fired, and three received prison sentences. The company actively participated in the Apollo project, involving more than 6,000 GE employees. At the end of the 1960s, a large-scale reorganization of the company began, out of more than 200 operating units, 43 were formed, grouped according to the areas of activity and performance (growing, stable and unprofitable). With the completion of the reorganization, GE made its largest corporate purchase to date in December 1976. having paid $2.2 billion for the mining company Utah International, with interests in coal, copper, uranium, iron ore, oil and gas; Eighty percent of its assets were outside the U.S., and in its first year it accounted for 18 percent of General Electric's revenues. In 1973, Aivar Giever became the second employee of the company to receive the Nobel Prize (co-authored for research in the field of superconductivity).

In the mid-1970s, the company spent about half a billion dollars to buy information technology companies in an effort to catch up in the industry. By the end of the 1970s, interest in nuclear power had waned, and the company was phased out in 1980, and from then on GE was limited to fuel production, maintenance of existing reactors, and nuclear power research.

Although the company's turnover tripled in the 1970s and the stock price rose modestly, investors believed that the company was so tied up in various aspects of the U.S. economy that it could not keep pace with it. Jack Welch, who took over the company in 1981 and started a new reorganization, tried to refute this opinion. 338 companies were bought (for $11.1 billion) and 232 companies were sold (for $5.9 billion). His goal was to make General Electric a leader in all the industries the company was engaged in. Welch paid special attention to the financial division, founded in 1943 as General Electric Credit Corporation, by 1984 its assets had reached $16 billion, and its scope of activities was expanded to insurance, real estate operations and leasing. Mass automation of production began, and $300 million was spent on the modernization of the locomotive plant alone in Pennsylvania. An agreement was also made with the Japanese company Hitachi to manufacture and sell industrial robots in the United States. In 1984, Utah International was sold to Australia's BHP; by this time it had become one of the largest coal mining companies in Australia, but the most promising asset was the Chilean copper mine Escondida, which in 1981 confirmed large copper reserves, began commercial development in 1990, and soon became one of the three largest in the world in terms of production.

In 1986, RCA was bought for $6.4 billion, co-founded in 1919 by General Electric; by this time, it included NBC, the largest television network in the United States. In the same year, the finance division was strengthened with the purchase of Employers Reinsurance Corporation for $1.1 billion and the investment bank Kidder Peabody and Company (sold in 1994). After these acquisitions, services and high-tech accounted for 80 percent of the company's revenue, with defense contracts accounting for 20 percent. In the meantime, industrial production was declining, with the aircraft engine group faring the worst, where half of its staff was laid off in the early 1990s. In the early 1990s, about one-fifth of revenues from the sale of products and services came from military orders from the U.S. federal government (excluding foreign orders for weapons and military equipment).

By the mid-1990s, General Electric had become the most profitable company in the United States, with revenues reaching $70 billion in 1994 and $100 billion in 1998, and a market capitalization of more than $100 billion in 1996 (the year the company celebrated the 100th anniversary of its inclusion in the Dow Jones Industrial Average). By that time, about half of the revenue came from the financial division of GE Capital. In the 1990s, GE became more active on the international stage, spending about $30 billion on acquisitions of 130 companies in Europe, as well as several major acquisitions in Japan (Japan Leasing Corporation, Toho Mutual Life Insurance), and Brazil (DAKO S.A., the country's largest manufacturer of gas stoves). At the end of the 1990s, mass closures of enterprises and the transfer of production to countries with cheap labor began. By the time Welch left in 2001, the market capitalization had reached $505 billion, second only to Microsoft, and over the 20 years of his rule, turnover had grown from $27.2 billion to $130 billion, and net profit from $1.6 billion to $12.7 billion. Instead, the financial company Heller Financial Inc. was bought at a cost of $5.3 billion.

Welch's successor was Jeffrey Immelt. Under his leadership, several acquisitions were made in the media sector in 2002, including Telemundo Communications Group (a Spanish-language television network) and Bravo (a cable network), totaling nearly $4 billion. Another $9 billion this year has been spent on industrial acquisitions, including BetzDearborn (a manufacturer of water treatment reagents) and Interlogix (electronic security systems). In 2003, several major acquisitions were made in the medical devices division (previously headed by Immelt), notably Finland's Instrumentarium (for $2.3 billion) and Britain's Amersham (for $9.5 billion). After that, the headquarters of the GE Healthcare division was moved to the United Kingdom. But the largest deal of 2003 ($14 billion) was the purchase of the American branch of the French company Vivendi, whose main asset was the film studio Universal Pictures. In May 2004, the media conglomerate NBCUniversal was formed. At the same time, GE gradually sold off its low-margin insurance business, and part of its insurance assets was spun off into Genworth Financial.

In 2007, the aviation division was supplemented by the purchase of Smiths Aerospace (for $4.8 billion), and the oil and gas division was supplemented by the acquisitions of Vetco Gray and Hydril Pressure & Control (for a total of $3 billion). In 2008, the plastics production was sold to the Saudi company SABIC.

In 2009, a majority stake (51%) in NBCUniversal was sold to Comcast, and in 2013 the remaining shares were sold. In 2010, the company acquired Dresser Inc., a manufacturer of gas engines, and Wellstream, a British manufacturer of pipes for the oil and gas industry, and in 2013, Lufkin Industries, a manufacturer of pumps for the oil industry. In 2014, the energy division of the French group Alstom was bought for $17 billion. In 2015, a real estate portfolio worth $26.5 billion was sold. Also this year, a significant part of the financial division was sold off, with the released funds being used to buy back its own shares in the amount of up to $90 billion.

In 2016, China's Haier paid $5.4 billion for its home appliances division, GE Appliances; The division had a turnover of $5.9 billion in 2014 and employed 12,000 people, almost all in the United States. It became a separate entity within the Haier Group, with its headquarters remaining in Louisville, Kentucky.

In 2017, the oil and gas division was merged with Baker Hughes. This company became a partially controlled subsidiary of GE (and one of the largest oilfield service companies in the world), the deal was estimated at $30 billion. GE later reduced its stake to 34%. In May 2017, an agreement worth $15 billion was signed with Saudi Arabia; The kingdom is one of the company's largest clients.

In mid-2018, the company announced its intention to sell two divisions, Transportation and Medical. The buyer of the transportation business was Wabtec Corporation, which paid $2.9 billion in cash and 24.9% of its shares. BioPharma's subsidiary (part of the medical division) has been sold to Danaher Corporation for $21.4 billion, with the remainder of the division planned to be spun off into a separate company. The company ended fiscal 2018 with a net loss of more than $22 billion, mainly due to the write-off of intangible assets in the energy division. Accusations of misstatements in the company's accounting records date back to Welch's time (in 2001), according to forensic accountant Harry Markopolos (who uncovered the Bernard Madoff scam), the company was hiding another $38 billion in losses with falsified accounts (in particular, insufficient pension insurance reserves).

In 2020, the lighting division was sold to Savant Systems. In early 2023, the medical device division was transformed into a standalone company, GE HealthCare.

Activities: 

Divisions as of 2022:

Aerospace – production and maintenance of engines for civil and military aircraft; 45,000 employees, $26.1 billion in revenue, headquartered in Cincinnati.
Power – production of gas turbines, equipment for thermal and nuclear power plants, as well as for power lines, maintenance of power plants, production of motors, generators, automation and production control equipment; joint ventures with Hitachi and Toshiba produce nuclear reactors; 32,000 employees, $16.3 billion in revenue, headquartered in Schenectady.
Renewable Energy – production and maintenance of equipment for wind and hydroelectric power plants, as well as for power grids; 36,000 employees, $13.0 billion in revenue, headquartered in Paris.
Healthcare – production of diagnostic equipment, pharmaceuticals; 49 thousand employees, revenue of $18.5 billion, headquartered in Chicago, since 2023 an independent company.
The U.S. accounts for 43 percent of revenue, followed by Europe (21 percent), China (8 percent), the rest of Asia (11 percent), the Middle East and Africa (9 percent), and the rest of the Americas (8 percent). The bulk of assets are in the United States (68%), followed by Europe (20%), Asia (6%), and the rest of the Americas (3%). 4% of sales come from U.S. government agencies, and another 3% are defense aviation products.

The company's production facilities include 75 plants in the United States and 130 plants in 32 other countries. In addition, General Electric participates in several joint ventures:

CFM International is a partner of Safran in the production of CFM56 and LEAP aircraft engines;
Engine Alliance is a partner of Raytheon Technologies, producing GP7200 aircraft engines;
GE Honda Aero Engines is a partner of Honda that produces the HF120 aircraft engine.