cream: cash rules every thing around me

General Electric a corportate profile | May 3, 2010

by Brian White

General Electric (GE) was established in 1892 when Thomson-Houston, an electric company from Massachusetts, merged with Edison General Electric at the behest of J.P. Morgan. In 1879, Thomas Edison and his assistant Francis Jehl created the first long-lasting incandescent bulb, which created a craze in the marketplace for electricity. Edison was a smart man, but not a great bussiness manager and as a result his companies would go through a series of transformations until it finally formed GE. Thomson-Houston brought with it the capital and some patents, but Edison General Electric brought with it the light-bulb and the business savvy of Morgan. Morgan was a firm believer in corporate consolidation and it would be this mentality that would grow GE into one of the largest companies in the world. Despite the merger, Edison had no involvement in GE and instead the CEO of Thomson-Houston Charles Coffin took over the new company.
GE started out with its interests mainly invested in electrical generation, transmission and lighting, but within its first ten years of operation it had already expanded into producing machinery for businesses and domestic appliances.

In 1900, GE established the first corporate research facility under the supervision of Charles Steinmetz. Over the next ten years the lab would improve upon Edison’s bulb creating the tungsten filament and also the first X-ray tube establishing the company’s foray into medical equipment.

In the early 1900s the company also started producing toasters and irons to sustain the company’s growth. Later in 1910 it introduced a waffle iron and an experimental home refrigerator. GE knew that in order for its generation and equipment operations to continue to grow it needed to provide a solid market for electricity.

In 1917, the U.S. began using GE produced engines for their air-crafts.

In 1918, GE underwent yet another merger when it joined forces with Pacific Electric Heating Co. and Hughes Electric Heating Co bringing with them an electric range and the hot point iron for production and sale. Within the next few years, GE was offering home refrigerators, vacuum cleaners, washing machines and various other household products.

In 1919 the the American Government approached General Electric and asked it to invest its interests in starting an American broadcasting company. In response to the governments request, General Electric, Westinghouse, A T and T and United Fruit signed a cross-licensing agreement resulting in the creation of the Radio Corporation of America (RCA). GE would remain the majority shareholder in RCA and, along with the other companies, used the broadcasting arm of RCA to promote and market its products. In 1926 RCA created its first network, NBC, with GE as the minority shareholder to A T & T due to the latter’s majority ownership over the transmission lines used. By 1927, NBC had two radio networks, NBC Red and NBC Blue, and a clear dominance in the radio market. GE experienced great success from its holding in RCA until 1932 when the government deemed its ownership as illegal and issued an anti-trust and RCA emerged as an independent company.

GE’s incredible success was soon being interpreted as dominance and was cause for growing concern within the Department of Justice. A similar case occurred six years later with the branch of GE in control of public utilities. In 1905 GE established an Electric Bond and Share Company (EBASCO) a branch used to finance and grow public utilities. EBASCO grew through mergers and buyouts to be the third largest utility holder in the United States, until 1938 the government passed the Public Utility Holding Company Act, which forced them to sell off their monopoly.

After the split, GE was allowed to continue manufacturing radios, but began to hone in on other avenues for business. By the start of the Second World War, GE turned its focus to the production of radar equipment and power-plants for ship building as well as producing some of the first jet-engines for planes.

In the 1950s GE used Ronald Reagen as its Ambassador sending him around the world to promote GE.

In Post-War America, however, GE continued to face more anti-trust problems. In 1961 GE was indicted along with 29 other companies for price fixing on electrical-equipment.

During the ’60s, GE had come to the conclusion that it was too large and its operations too confusing. The result was a decrease in operating units from over 200 to just 43, which either involved the sale or merge of subsidiaries into one operating unit. The restructuring allowed GE to then make the largest purchase in corporate history. In 1976, GE bought Utah International for $2.2 billion and within a year was contributing 18% to GE’s total earnings. Included in its divestitures of the ’60s was Honeywell a computer company. Although the company was losing money losing the company left GE well behind in the developing technology industry and according to a 1975 report GE no longer considered a leader in electronics. This, coupled with the takeover of Jack Welch in 1981 would shape the face of the GE we know today.

John (Jack) Welch

When Welch took over GE its annual revenue was about $26.8 billion, but when he left in 2000 its revenue was at $130 billion. During his tenure as CEO, Welch bought 338 companies and sold 232 and helped to completely restructure the company to make it more self-sufficient. Welch guided GE into new markets as well. The company began selling and leasing heavy industrial goods, inventories, real estate and insurance. His largest purchase, however, came in 1986 when GE bought RCA.

In 1990, GE divided its company into three parts: technology, service and manufacturing. In 1992, GE made a purchase of about 50% of Britain’s General Electric Company (GEC). In 1996 GE worked with Microsoft to launch the 24-hour news network MSNBC. GE also made an international splash in Asia and Brazil with large auto leasing firm purchases and domestic appliance company purchases and in 2001 GE purchased a global finance firm based out of Chicago that would mark the end of Welch’s reign with GE.

Along with some other financial investments, GE purchased Vivendi Universal Entertainment (VUE) in 2003. This purchase most notably included the acquisition of Universal Pictures and its studios as well as the USA television network.

GE is currently working on orchestrating a NBC and Comcast merger that has received a large amount of criticism.

In following the history of General Electric it is obvious that its arm reaches across many markets and many industries. From domestic appliances, to jet engines, to energy generators, to television, radio and movies to automotive insurance and financial lending, GE has its hand just about everywhere. With Fortune 500’s 2010 ranking at number 4, GE is definitely one of the most powerful companies in the world.

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For a comprehensive list of General Electric’s media share go here to the Free Press website.

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Advertising Student at the University of Oregon interested in becoming a writer...

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