Wiktor Wise
General Electric (GE), the company that was once the most valuable public company in the world, has not gone out of business. However, it has undergone a significant transformation. In April 2024, GE finalised its split into three independent businesses: GE Vernova (energy), GE Aerospace, and GE HealthCare. This marked the end of the 132-year-old conglomerate, which had a long history of innovation and a presence in various industries, from bringing electricity to selling appliances, and even playing a role in nuclear weapons development. GE's decline began around 2000, and it faced challenges due to the financial crisis and questionable business decisions. Despite its struggles, GE remains a significant player in its three main sectors: aerospace, energy, and healthcare.
| Characteristics | Values |
|---|---|
| Date of breakup | April 2, 2024 |
| Number of companies it broke into | 3 |
| Names of the 3 companies | GE Vernova, GE Aerospace, GE HealthCare |
| Ticker symbol for GE Vernova | GEV |
| Ticker symbol for GE Aerospace | GE |
| Year GE was formed | 1892 |
| Market cap in 2000 | $600 billion |
| Market cap in 2024 | $191 billion |
| Year GE peaked | 2000 |
| Year GE sold its computer division | 1970 |
| Year GE sold its appliance business | 2008 |
| Year GE sold GE Plastics | 2008 |
| Year GE sold GE Water | 2008 |
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What You'll Learn
GE's decline
General Electric (GE), the company that Thomas Edison built over a century ago, has been in a years-long process of dismantling itself. In April 2024, GE completed its breakup into three independent businesses: GE Vernova, GE Aerospace, and GE HealthCare. This marked the end of the 132-year-old conglomerate that was once the most valuable public company in the world, with a market cap of almost $600 billion in 2000.
GE's troubles began as early as the 1970s when it sold its computer division to Honeywell, exiting the computer manufacturing industry. In 1993, GE sold its Aerospace business to Martin Marietta, and in 2001, it sold NBCUniversal. GE's market cap steadily declined from nearly $600 billion in 2001 to $91 billion, and the company was ranked 143rd in the world.
The final blow to GE as it was known came in 2024 when the company completed its split into three independent businesses, with GE Vernova, the energy spinoff, making its debut on the New York Stock Exchange using the ticker symbol "GEV." GE Aerospace, the remaining company, retained the classic "GE" ticker.
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GE's split into three companies
General Electric (GE), a pioneer in American industry and the largest company by market capitalization during the late 1990s, has been struggling since the 2008 financial crisis. The company has been selling off assets to clear its enormous debt load. In 2021, GE announced its plan to split into three separate publicly traded companies, each focusing on a particular industry: aviation, healthcare, and energy.
The breakup of the 132-year-old conglomerate, which was once the most valuable U.S. corporation and a global symbol of American business power, was a long time in the making. GE's earliest products were incandescent light bulbs, an electric locomotive, X-ray machines, and an electric stove. The company began mass-producing electric home appliances in the 1920s and was among those credited for changing the look and function of the American home. In the decades that followed, GE helped create vacuum tube technology, which enabled the subsequent development of radar tracking systems. GE supplied the military with equipment and executives during World War II, and in 1949 launched the popular J-47 jet engine.
Under former CEO Jack Welch, GE acquired RCA and NBC and expanded into the financial services sector. During his tenure, GE also became the most valuable public company in the world. However, GE's decline began in 2000, the year Welch retired, and the company would never again match its stock price that year. GE's troubles continued with its $9.5 billion purchase of French transportation company Alstom's power business in 2015, which was considered a flop.
The breakup of GE into three companies, completed in 2024, marks the end of an era. The three new companies are GE Aerospace, which will retain the classic "GE" ticker; GE Vernova, the energy spinoff, which will trade under the ticker symbol "GEV"; and GE HealthCare, which became a standalone company in 2023.
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GE's healthcare business
General Electric (GE), the 132-year-old company founded by Thomas Edison, has recently undergone a significant transformation. In April 2024, GE finalised its split into three independent businesses: GE Vernova, GE Aerospace, and GE HealthCare. The latter became a standalone company in 2023, and it has a rich history dating back to the late 19th century.
The Early Years
GE Healthcare's origins can be traced back to the Victor Electric Company, founded in 1893 by Charles F. Samms and Julius B. Wantz. The company initially focused on dental supplies but quickly expanded into the X-ray machine business in 1896, just a year after Wilhelm Röntgen's discovery. The rapid growth led to multiple office moves, and by 1899, Victor Electric had already moved into new, larger premises three times. They also began manufacturing electrostatic generators for X-ray tubes and electrotherapeutic devices.
Expanding into Healthcare Technology
Over the next few decades, Victor Electric continued to grow and evolve. In 1974, the company began working on computed tomography (CT) technology, and by 1976, they had installed their first CT machine. In 1980, they acquired the CT scanner business of EMI, further solidifying their presence in the healthcare industry. In 1982, a joint venture with Yokogawa Electric led to the formation of GE Healthcare Japan Corporation.
Focus on Medical Imaging
The 1980s and 1990s were a period of significant expansion for GE Healthcare. In 1983, the company started heavily investing in Magnetic Resonance Imaging (MRI) technology, leading to the development of the successful MR Signa product line. They also made strategic acquisitions, such as Resonex (an MRI maker) in 1995, Diasonics Vingmed (expanding their ultrasound imaging business) in 1998, and Marquette Medical Systems in the same year. In 2001, GE Healthcare acquired Imatron, a producer of Electron Beam Tomography (EBT) scanners used in cardiology, pulmonology, and gastroenterology.
Recent Developments
In the 2000s, GE Healthcare continued to grow and innovate. In 2002, they acquired MedicaLogic, Visualization Technology (a manufacturer of intra-operative medical devices), and Millbrook Corporation, enhancing their electronic medical records and billing systems. In 2003, the acquisition of Instrumentarium expanded their anesthesia and ventilation offerings. GE Healthcare also collaborated with other healthcare companies to build a research reactor for neutron and unit cell research in Germany, which remains the only such reactor in operation. Today, GE Healthcare is a leading global medical technology and digital solutions provider, utilising intelligent devices, advanced analytics, and artificial intelligence to improve healthcare outcomes worldwide.
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GE's energy business
General Electric (GE) has not gone out of business, but it has undergone a significant restructuring. In April 2024, GE finalised its split into three independent businesses, marking an end to the 132-year-old conglomerate. This move is a result of a years-long process of dismantling the company, which has faced struggles and declines in recent years.
Now, let's focus on GE's energy business:
GE Vernova's focus on energy marks a shift from the company's roots in manufacturing. GE was once a household name, known for its light bulbs, electric locomotives, and appliances. The company has a long history in the energy sector, dating back to its earliest days of bringing electricity to homes. However, in recent years, GE has faced challenges with its energy-related ventures, such as the $9.5 billion acquisition of Alstom's power business in 2015, which was considered a flop.
Despite these setbacks, GE Vernova is well-positioned to capitalise on the global trend towards alternative and renewable energy sources. With the energy sector moving away from fossil fuels, GE Vernova will play a crucial role in the transition, leveraging its expertise and resources to drive innovation and develop sustainable solutions.
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GE's aerospace business
General Electric (GE) has not gone out of business, but it did split into three independent businesses in April 2024: GE Vernova, GE Aerospace, and GE Healthcare. GE Aerospace, headquartered in Evendale, Ohio, is the legal successor to the original General Electric Company founded in 1892.
GE Aerospace manufactures aircraft engines and partners with other manufacturers to produce engines. It operates through two reportable segments: Commercial Engines and Services, and Defense and Propulsion Technologies. The Commercial Engines and Services segment designs, develops, manufactures, and provides maintenance, repair, and overhaul (MRO) services for jet engines, as well as the sale of spare parts for commercial airframes, business aviation, and aeroderivative applications. The Defense and Propulsion Technologies segment provides similar services but for governments, militaries, and commercial airframers. GE Aerospace's main competitors in the engine market are Pratt & Whitney and Rolls-Royce.
GE Aerospace has a long history in the aviation industry. In 1903, they hired Sanford Alexander Moss, who started developing turbosuperchargers at GE. This technology became standard equipment on practically all military aircraft before WWII. In 1941, GE demonstrated Frank Whittle's W.1 engine, which led to the production of improved versions, such as the I-16 (J31) and the more powerful I-40 (J33), which powered the first US combat-capable jet fighters, the P-80 Shooting Star. In 1949, GE launched the popular J-47 jet engine.
GE Aerospace has recently started incorporating 3D printing technologies in their engine manufacturing processes, such as in the newly designed GE9X, the largest jet engine in the world. The company has also acquired several companies to enhance its metal casting and additive manufacturing capabilities.
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