Not long ago, GE was considered the model company. Its six sigma management process, earnings management, goal of being the first or second largest company in any business is entered, and other factors drew raves from outsiders. The company’s had a hard time since Jack Welch left his perch at the top of the company. Now, it looks like the conglomerate might be disassembled. This article reviews the history and how GE came to be in this situation.
Then in January came news of a $6.2 billion charge related to costs incurred more than a decade ago by GE’s financial-services business, an announcement that triggered a U.S. Securities and Exchange Commission investigation. GE’s new CEO, John Flannery, has grimly promised that “all options are on the table,” including the once-unthinkable option of dismembering the company entirely.
And yet, little of this has to do with the stuff GE makes. Its jet engines still dominate the global market. Its turbines, whether in gas, coal, or nuclear power plants, still provide a third of the world’s electricity. Its CT scanners and MRI machines are still the state of the art. So what happened?