Behind the Money The rise and fall of General Electric
Oct 10, 2018
In this insightful discussion, Ed Crooks, the US industry and energy editor for the Financial Times, explores the dramatic rise and fall of General Electric. He delves into GE's historic growth to a $600 billion valuation and the pivotal challenges it faced with its Alstom acquisition. Crooks highlights critical miscalculations in the shift towards renewable energy and how leadership changes impacted GE's financial strategies. Finally, he discusses the company's future as it pivots away from conglomeratization, emphasizing the lessons learned from past failures.
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GE's Acquisition of Alstom
- GE's acquisition of Alstom's energy arm in 2014 for $13 billion was a long and complex process.
- It involved navigating French national pride, job security concerns, and intense negotiations.
GE's Diverse Portfolio
- GE's diverse portfolio, from power generation to finance and broadcasting, lacked a unifying core business.
- Its growth was driven by acquisitions, not necessarily strategic synergy.
Jack Welch's Leadership
- Jack Welch, known for his charisma and deal-making, transformed GE through acquisitions and cost-cutting.
- His Six Sigma system improved quality, but his reliance on M&A and GE's high stock value raised concerns about sustainability.