Trystan Casey
General Electric, also known as GE, has had a long history in the United States, with its roots tracing back to Thomas Edison in the late 19th century. Over the years, GE has evolved from an electrical company to a multinational conglomerate, with a focus on aviation, healthcare, and energy. In recent years, GE has undergone a significant transformation, spinning off into multiple separate companies, including GE Aerospace, GE HealthCare, and GE Vernova. Despite these changes, the company's legal name remains the General Electric Company, and it continues to be a well-known brand in the aviation, healthcare, and energy sectors.
| Characteristics | Values |
|---|---|
| Company Name | General Electric Company (GEC) |
| Type | Public limited company |
| Industry | Aviation, Healthcare, Energy |
| Headquarters | Cambridge, Massachusetts, U.S. |
| Number of Companies | 3 |
| Company Focus | Aerospace, Healthcare, Energy (Renewable Energy, Power, Digital) |
| Company Names | GE Aerospace, GE HealthCare, GE Vernova |
| Stock Exchange | NYSE: GE |
| Annual Revenue | $18.3 billion |
| Number of Employees | 50,000 |
| Number of Countries | 100+ |
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What You'll Learn
GE's fall from grace
General Electric, or GE, has gone through a massive fall from grace over the past 20 years. In 2000, it was the largest holding in the SPDR S&P 500 exchange-traded fund, comprising 4.2% of the fund. Today, it is the 75th largest company in the US stock market, making up just 0.3% of the fund.
GE's decline can be attributed to a combination of factors, including a deterioration of culture and poor capital allocation decisions. Under CEO Jack Welch, the company encouraged short-termism and quarterly earnings 'beats' over behaviour that helped long-term shareholder value. Welch's style has been described as a "virus" that spread through US industry, sucking the cash and life out of companies under the guise of efficiency.
GE also made several poor business decisions, such as acquiring WMC Mortgage in 2004, which later declared bankruptcy, and buying a 62.5% stake in Baker Hughes in 2017, only to lose billions as GE reduced its stake by more than half. In addition, GE's reliance on its financial unit, GE Capital, to fund its operations during the 2008 global financial crisis moved it past its industrial core competency.
In an attempt to turn the company around, GE announced in 2021 that it would divide itself into three public companies: GE Aerospace, GE HealthCare, and GE Vernova, focused on aerospace, healthcare, and energy, respectively. The first spin-off of GE HealthCare was finalised on January 4, 2023, followed by the spin-off of GE's portfolio of energy businesses, which became GE Vernova on April 2, 2024. Following these transactions, GE became an aviation-focused company, with GE Aerospace as its legal successor and the old General Electric conglomerate ceasing to exist.
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The company's new focus on aviation
General Electric (GE) has a long history in aviation, dating back to the 1900s when it began work on steam turbine technology. Over the years, GE has developed several successful aircraft engines, including the J47, which was in high demand for military aircraft, and the GE9X, the largest jet engine in the world.
In 2022, GE Aviation changed its name to GE Aerospace, signalling a broader focus beyond aircraft engines. This move came as part of GE's decision to split into three separate, publicly traded companies by 2024: GE Aerospace, GE Healthcare, and GE Vernova. GE Aerospace, the legal successor of the original GE, is now the only business line of the former conglomerate, focusing primarily on aviation and aerospace.
GE's new focus on aviation is evident in its continued development of advanced aircraft engines and partnerships with other companies. For example, GE has collaborated with Garrett AiResearch, Pratt & Whitney, and Honda on various engine projects. GE has also started incorporating 3D printing technologies into its engine manufacturing processes, such as electron beam melting and laser melting, enabling the production of complex parts at a lower cost.
In addition to engine development, GE's aviation business includes the assembly of jet engines for the United States Department of Defense and commercial operators at its Lynn facility. The plant produces a range of engines, including the F404, F414, T700, and CFE738, as well as commercial versions of the T700 turboshaft. With its rich history, technical expertise, and ongoing investments in innovation, GE's new focus on aviation positions it as a key player in the industry.
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GE's clean energy business
In 2005, GE launched a program called "Ecomagination" to develop solar energy, hybrid locomotives, fuel cells, lower-emission aircraft engines, and efficient lighting, among other things. As part of this initiative, GE committed to investing $1.4 billion in clean technology research and development by 2008. By October of that year, 70 green products had been brought to market through this scheme, including halogen lamps and biogas engines.
GE Renewable Energy, a division of GE, was formed in 2015 by combining the wind power assets purchased from Alstom with those previously owned by GE under the Power & Water division. The division is headquartered in Boulogne-Billancourt, near Paris, France, and focuses on producing energy systems that use renewable sources. Its products include onshore and offshore wind, hydroelectric, and solar power generating facilities.
In 2024, GE Renewable Energy merged with GE Power to create GE Vernova, an energy company that is completely independent of General Electric. GE Vernova is accelerating the transition to more reliable, affordable, and sustainable energy, helping customers power economies, and delivering electricity that improves quality of life. The company has approximately 57,000 wind turbines and 7,000 gas turbines, generating around 25% of the world's electricity.
GE Vernova's Onshore Wind business will supply 674 next-generation 3.6-154 MW turbines to the Pattern Energy Group's SunZia Wind project, the largest renewable energy project in the Western Hemisphere. This deal will see GE Vernova provide over 2.4 GW of power, electrifying 3 million Americans.
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The end of the conglomerate era
General Electric, or GE, has been one of the most well-known companies in the world for over a century. Born out of the race to provide affordable electricity to fuel industrial America in the late 19th century, it became a household name in the 20th century, manufacturing household appliances and supplying the military with equipment during World War II.
In the 21st century, GE continued to be a leader in innovation, investing in clean technology research and development. However, the company's profitability began to decline, and in 2017, GE's CEO John Flannery further divested the company's assets in locomotives and lighting to focus more on aviation. The COVID-19 pandemic dealt a significant blow to the company, causing a substantial drop in revenue.
In November 2021, GE announced its plan to divide itself into three public companies: GE Aerospace, GE HealthCare, and GE Vernova. The move signalled the end of the conglomerate era for GE, with the new companies focusing on aviation, healthcare, and energy, respectively. The first spin-off, GE HealthCare, was finalised in January 2023, followed by the spin-off of GE's energy businesses, which became GE Vernova in April 2024.
Following these transactions, GE Aerospace, the legal successor of the original GE, took on the General Electric name and ticker symbols, while the old conglomerate ceased to exist. The new GE is an aviation-focused company, continuing its legacy of innovation in the aerospace industry.
While the conglomerate era of General Electric has come to an end, the new GE companies continue to build on the over 130-year legacy of the original company, focusing on their respective sectors and driving innovation and growth.
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GE's early products
General Electric (GE) is a major American corporation and one of the largest and most diversified corporations in the world. Its products include electrical and electronic equipment, aircraft engines, and financial services. GE has been at the forefront of medical technology R&D and manufacturing, contributing to advancements in X-ray machines, CT scans, and MRIs.
GE's other early products included:
- Top- and bottom-freezer refrigerators
- Washing machines
- Dryers
- Dishwashers
- Lighting products
- Industrial products
- Factory automation systems
- Plastics, silicones, and quartz products
- Security and sensor technology
- Equipment financing, management, and operating services
In the 1960s, GE began its environmental work and research, building an experimental electric car in 1968, which led to the production of the first commercially produced all-electric garden tractor, manufactured from around 1969 to 1975.
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Frequently asked questions
Yes, the company's legal name is still General Electric Company, but it has split into three separate public companies: GE Aerospace, GE HealthCare, and GE Vernova.
GE Aerospace, an aerospace company, is the legal successor of the original GE. GE HealthCare is a healthcare company, and GE Vernova is an energy company.
GE Aerospace is in the aerospace industry. GE HealthCare is in the healthcare industry. GE Vernova is in the energy industry, focusing on renewable energy, power, and digital.
General Electric's revenue fell significantly in 2020 due to restrictions on air travel during the COVID-19 pandemic. The company decided to split to enable each new company to focus on its core strengths and growth opportunities.
The first spinoff of GE HealthCare was finalized on January 4, 2023. This was followed by the spinoff of GE's portfolio of energy businesses, which became GE Vernova on April 2, 2024.
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