General Electric Essay

The history of normal electric automobile unwrapy is a significant part of the history of applied science in the United States. General Electric (GE) has evolved from Thomas Edisons home laboratory into iodine of the largest companies in the world, following the evolution of galvanisingal technology from the simplest archaeozoic applications into the spirited-tech wizardry of the wee(a) 21st century.The bon ton has likewise evolved into a conglomerate, with an increasing shift from technology to serve, and with 11 main operating units GE mature Materials, a specialist in high-per stoolance engineered thermoplastics, silicon-based products, and fused quartz and ceramics used in a wide variety of industries GE Consumer & Industrial, which is one of the worlds leading appliance manufacturers, stands as a preeminent global maker of shorting products for consumer, commercial, and industrial customers, and alike provides compound industrial equipment, systems, and services GE Energy, one of the largest technology suppliers to the energy industry GE Equipment Services, which offers leases, loans, and former(a) services to medium and large jobes around the world to service them manage their blood line equipment GE Healthcare, a world leader in medical diagnostic and interventional imaging technology and services GE Infrastructure, which is compound in high-technology protective and productivity solutions in more than(prenominal) areas as water purification, facility safety, demonstrate automation, and automatic environmental fudges GE Transportation, the largest producer of sm any(a) and large jet engines for commercial and military aircraft in the world, as well as the number one maker of diesel freight locomotives in North America NBC Universal (80 part take ined by GE), a global media and entertainment giant with a wide range of assets, including the NBC and Telemundo television wage run aways, s ever soal cable channels, and the Universa l Pictures train studio GE Commercial Finance, which provides businesses, peculiarly in the mid-market segment, with an array of financial services and products, including loans, operating leases, and finance programs GE Consumer Finance, a leading financial services provider, serving consumers, retailers, and auto repugner in just about tiercesome dozen countries and GE Insurance, which is involved in much(prenominal) areas as life insurance, asset management, mortgage insurance, and reinsurance. The staggering size of GeneralElectric, which ranked ordinal in the Fortune 500 in 2003, becomes heretofore more than evident through the revelation that each of the smart sets 11 operating units, if listed give outly, would measure up as a Fortune 500 fellowship. GE operates in more than 100 countries worldwide and generates approximately 45 percent of its revenues outside the United States. everywhere the course of its 110-plus years of innovation, General Electric has a massed more than 67,500 patents, and the firms scientists have been awarded cardinal Nobel Prizes and numerous some other honors. Thomas Edison established himself in the 1870s as an inventor subsequent devising, at the age of 23, an improved stock ticker. He subsequently began investigate on an voltaic unmortgaged as a successor for petrol light, the standard method of illumi furthestming at the time. In 1876 Edison moved into a laboratory in Menlo Park, bracing Jersey. Two years upstartr, in 1878, Edison established, with the help of his friend Grosvenor Lowry, the Edison Electric Light Company with a capitalization of $300,000. Edison received half of the new(a) clubs shares on the agreement that he work on developing an incandescent lighting system. The major problem Edison and his team of specialists faced was finding an easy-to-produce filament that would resist the passage of electrical current in the bulb for a long time. He triumphed only a year after begin ning interrogation when he disc overed that common sewing thread, at one time carbonized, worked in the laboratory. For practical applications, however, he switched to carbonized bamboo. Developing an electrical lighting system for a whole community involved more than merely developing an electric bulb the devices that generated, transmitted, and controlled electric exponent similarly had to be invented. Accordingly, Edison organized look into into all of these areas and in 1879, the same year that he produced an electric bulb, he also constructed the setoff dynamo, or direct-current (DC) generator. The original application of electric lighting was on the steamship Columbia in 1880. In that same year, Edison constructed a three-mile-long trial electric railroad at his Menlo Park laboratory. The first individual system of electric lighting came in 1881, in a printing plant. But the first all-out public application of the Edison lighting system was actually made in London, at th e Holborn Viaduct. The first system in the United States came soon after when osseous tissue Street Station was opened in New York City. Components of the system were manufactured by different companies, some of which were organized by Edison lamps came from theparent company, dynamos from the Edison Machine Works, and switches from Bergmann & Company of New York. In 1886 the Edison Machine Works was moved from New Jersey to Schenectady, New York.While these developments unfolded at Edisons company, the Thomson-Houston Company was formed from the American Electric Company, founded by Elihu Thomson and Edwin Houston, who held several patents for their development of arc lighting. Some of their electrical systems differed from Edisons through the use of alternating-current (AC) equipment, which can transmit over longer distances than DC systems. By the early 1890s the spread of electrification was threatened by the conflict between the ii technologies and by patent deadlocks, which prevented further developments because of patent-infringement problems. By 1889, Edison had consolidated all of his companies under the evoke of Edison General Electric Company. Three years newr, in 1892, this company was merged with the Thomson-Houston Electric Company to form the General Electric Company. Although this merger was the turning storey in the electrification of the United States, it resulted in Edisons resignation from GE. He had been appointed to the board of directors but he attended only one board meeting, and sell all of his shares in 1894, though he remained a consultant to General Electric and continued to collect royalties on his patents. The chairwoman of the new company was Charles A. Coffin, a former shoe manufacturer who had been the leading figure at Thomson-Houston. Coffin remained president of General Electric until 1913, and was chairman thereafter until 1922. Meanwhile, also in 1892, GEs stock began trading on the New York Stock Exchange. In 1884 Fr ank Julian Sprague, an engineer who had worked on electric systems with Edison, resigned and formed the Sprague Electric railway line and Motor Company, which built the first large-scale electric streetcar system in the United States, in Richmond, Virginia. In 1889 Spragues company was purchased by Edisons. In the meantime, the two other major electric-railway companies in the United States had merged with Thomson-Houston, so that by the time General Electric was formed, it was the major supplier of electrified railway systems in the United States. One year after the formation of General Electric, the company won a bid for the construction of large AC motors in a textile mill in South Carolina. The motors were the largest manufactured by General Electric at the time and were so successful that regularises soon beganto flow in from other industries such as cement, paper, and steel. In that same year, General Electric began its first prat into the field of fountain transmission wi th the opening of the Redlands-Mill Creek power line in California, and in 1894 the company constructed a massive power-transmission line at Niagara Falls. Meanwhile the companys electric-railroad ventures produced an elevated electric train contact the fairgrounds of the Chicago Worlds Fair in 1893. Electrification of existing rail lines began two years later.By the turn of the century General Electric was manufacturing everything involved in the electrification of the United States generators to produce electricity, transmission equipment to carry power, industrial electric motors, electric light bulbs, and electric locomotives. It is important to any understanding of the evolution of GE to realize that though it was diverse from the beginning, all of its enterprises centered on the electrification program. It is also worth noning that it operated in the virtual absence of competition. General Electric and the Westinghouse Electric Company had been competitors, but the companies entered into a patent pool in 1896. In 1900 GE established the first industrial laboratory in the United States. Up to that point, research had been carried out in universities or in private laboratories similar to Edisons Menlo Park laboratory. Initially, the lab was set up in a barn back the house of one of the researchers, but the lab was moved in 1900 to Schenectady, New York, after it was destroyed in a fire. The interrogative sentence of the research division was a professor from the Massachusetts Institute of Technology. The importance of research at General Electric cannot be underestimated, for GE has been awarded more patents over the years than any other company in the United States. During the early ten-spots of the 20th century General Electric made further come on in its established fields and also made its first major diversification. In 1903 General Electric bought the Stanley Electric Manufacturing Company of Pittsfield, Massachusetts, a manufacturer of transfo rmers. Its founder, William Stanley, was the developer of the transformer. By this time GEs first light bulbs were in obvious need of improvement. Edisons bamboo filament was replaced in 1904 by metalized carbon developed by the companys research lab. That filament, in turn, was replaced several years later by a tungsten-filament light bulb when William Coolidge, a GE researcher, discovered a process to render thedurable metal more pliable. This light bulb was so rugged and well suited for use in automobiles, railroad cars, and street cars that it was still employed in the early 2000s. In 1913, two other innovations came out of the GE labs Irving Langmuir discovered that waste-filled bulbs were more efficient and reduced bulb blackening. To this day virtually all bulbs over 40 watts are swash-filled.The first high-vacuum, hot-cathode X-ray tube, known as the Coolidge tube, was also developed in 1913. Coolidges research into tungsten had played an important role in the development of the X-ray tube. The device, which combined a vacuum with a heated tungsten filament and tungsten target, has been the foundation of virtually all X-ray tubes produced ever since, and its development laid the foundation for medical technology trading operations at General Electric. Perhaps GEs most important development in the early part of this century was its participation in the development of the high-speed steam turbine in conjunction with English, Swedish, and other inventors. Until this invention, all electricity (except hydroelectric) had been produced by generators that sullen at no more than 100 rpm, which limited the amount of electricity a single unit could produce. An independent inventor had come up with a design for a very-high-speed steam turbine before the turn of the century, but it took five years of research before GE could construct a working model. By 1901, however, a 500-kilowatt, 1,200-rpm turbine generator was operating. Orders for the turbines followed almost immediately, and by 1903 a 5,000-kilowatt turbine was in use at Chicagos Commonwealth Edison power company. Such rapid get along led to rapid obsolescence as well, and the Chicago units were replaced in spite of appearance six years. As a result, GE shops in Schenectady were soon overflowing with business. By 1910 the volume of the companys trade in turbine generators had tripled and GE had sold almost one million kilowatts of power capacity. At the same time, General Electric scientists were also researching the gas turbine. Their investigations eventually resulted in the first flight of an airplane equipped with a turbine-powered supercharger. In the early days of electric power, electricity was produced only during evening hours, because electric lighting was not needed during the day and there were no other products to use electricity. GE, as the producer of both(prenominal) electricity-generating equipment and electricity-consuming devices, naturally sought to expand both ends of its markets. The first majorexpansion of the General Electric product line was made in the first decade of the 20th century. Before the turn of the century, light bulbs and electric fans were GEs only consumer product.One of the first household appliances GE began to market was a toaster in 1905. The following year the company attempted to market an electric range. The unwieldy device consisted of a wooden table top equipped with electric griddles, pans, toasters, waffle irons, pots, and a coffeemaker, each with its own retractable cord to go into any one of 30 plugs. The range was followed by a commercial electric refrigerator in 1911 and by an data-based household refrigerator six years later. At the same time two other companies in the United States were producing electric devices for the home. The Pacific Electric heat Company produced the first electric appliance to be readily accepted by the public the Hotpoint iron. The Hughes Electric Heating Company produced and marketed an electric range. In 1918 all three companies were prospering, but to avoid competition with one another, they agree upon a merger. The new company combined GEs heating-device section with Hughes and Pacific to form the Edison Electric Appliance Company, whose products bore either the GE or the Hotpoint label. GEs first diversification outside electricity came with its establishment of a research staff to investigate plastics. This occurred primarily at the prompting of Charles P. Steinmetz, a brilliant mathematician who had been with the company since the 1890s. All of the initial work by this group was devoted to coatings, varnishes, insulation, and other products colligate to electrical wiring, so that even this diversification was tied in to electrification. A more radical branching of GEs activities occurred in 1912, when Ernst Alexanderson, a GE employee, was approached by a radio pioneer looking for a way to expand the range of wireless sets into higher frequen cies. Alexanderson worked for almost a decade on the project before he succeeded in creating electromagnetic waves that could span continents, instead of the short distances to which radios had been limited. In 1922, General Electric introduced its own radio station, WGY, in Schenectady. In 1919, at the request of the government, GE formed, in partnership with AT&T and Westinghouse, the radio set Corporation of America (RCA) to develop radio technology. GE withdrew from the venture in 1930, when just considerations came to the fore. General Electric also operated two experimental shortwave stations that had a global range.Other developments at General Electric contributed to the progress of the radio. Irving Langmuir had developed the electron tube. This tube, necessary for amplifying the signals in Alexandersons radio unit, was capable of operating at very high power. Other important developments by scientists at General Electric include the worlds first practical loudspeaker and a method for recording complex sound on film that is still in use today. Developments continued apace at GE in the electric motor field. In 1913 the U.S. navy commissioned General Electric to build the first ship to be powered by turbine motors rather than steam. In 1915 the first turbine-propelled battleship sailed forth, and within a few years, all of the Navys large ships were equipped with electric power.General Electric also owned several utility companies that generated electrical power, but in 1924 GE left over(p) the utilities business when the federal government brought antitrust action against the company. During the Great Depression the company introduced a variety of consumer items such as mixers, vacuum cleaners, air conditioners, and wash machines. GE also introduced the first affordable electric refrigerator in the late 1920s. It was designed by a Danish toolmaker, Christian Steenstrup, who later administrate mechanical research at the GE plant in Schenectady. In addition, GE introduced its first electric dishwasher in 1932, the same year that consumer financing of personal appliances was introduced. Also in 1932 the first Nobel Prize ever awarded to a scientist not affiliated with a university went to Irving Langmuir for his work at GE on step forward chemistry, research that had grown out of his earlier work on electron tubes. The years that followed witnessed a steady stream of innovation in electronics from the GE labs. These include the photoelectric-relay principle, rectifier tubes that eliminated batteries from home receivers, the cathode-ray tube, and glass-to-metal seals for vacuum tubes. Many of these developments in electronics were crucial to the harvest-festival of radio broadcasting. The broadcasting division of General Electric achieved a breakthrough in the late 1930s. The company had been developing a mode of transmission known as frequency modulation (FM) as an alternative to the prevailing amplitude modulation (AM). In 1 939 a demonstration conducted for the Federal Communications Commission proved that FM had less static and noise. GE began broadcasting in FM the following year. Of course, the light bulb was not forgotten in this broadening ofresearch activity at General Electric. The worlds first mercury-vapor lamp was introduced in 1934, followed four years later by the fluorescent lamp. The latter produced light using half the power of incandescent bulbs, with about twice the lifespan. Less than a year after the introduction of the fluorescent light, General Electric introduced the sealed-beam automotive headlight. Even though production of convenience items for the consumer halted during World War II, the war proved juicy for General Electric, whose revenues quadrupled during the war.The president of General Electric at the time, Charles Wilson, joined the War Production Board in 1942. GE produced more than 50 different types of radar for the arm forces and over 1,500 marine power plants for t he Navy and merchant marine. The company, using technology developed by the Englishman Frank Whittle, also conducted research on jet engines for aircraft. The chime XP-59, the first U.S. jet aircraft, flew in 1942 powered by General Electric engines. By the end of the war this technology helped General Electric develop the nations first turboprop engine. When production of consumer goods resumed immediately after the war, GE promptly found itself in another antitrust battle. The government discovered that GE controlled 85 percent of the light bulb industry55 percent through its own output and the other 30 percent through licensees. In 1949 the court forced GE to release its patents to other companies. In this period the first true product diversifications came out of GEs research labs. In the 1940s a GE scientist discovered a way to produce large quantities of silicone, a material GE had been investigating for a long time. In 1947 GE opened a plant to produce silicones, which allow ed the introduction of many products using silicone as a sealant or lubricant. Meanwhile, as research innovation blossomed and postwar business boomed, the company began an employee relations policy known as Boulwarism, from Lemuel Boulware, the manager who established the policy. The policy, which eliminated much of the bargaining involved in labor-management relations, included the extension by GE to union leaders of a nonnegotiable contract offer. During the late 1940s General Electric embarked on a study of thermonuclear power and constructed a laboratory specifically for the task. Company scientists involved in an earlier attempt to separate U-235 from natural uranium were developing nuclear power plants for naval propulsion by 1946. In 1955 the Navy launched the submarineSeawolf, the worlds first nuclear-powered vessel, with a reactor developed by General Electric.In 1957 the company received a license from the Atomic Energy Commission to operate a nuclear-power reactor, the first license granted in the United States for a in private owned generating station. That same year GEs consumer appliance operations got a big boost when an enormous manufacturing site, Appliance Park, in Louisville, Kentucky, was immaculate. The flow of new GE productshair dryers, skillets, electronic ovens, self-cleaning ovens, electric knivescontinued. Other innovations to come from GE labs during the fifties included an automatic pilot for jet aircraft, Lexan polycarbonate resin, the first all-transistor radio, jet turbine engines, gas turbines for electrical power generation, and a technique for fabricating diamonds. Antitrust problems continued to vex the company throughout the postwar years. In 1961 the Justice Department indicted 29 companies, of which GE was the biggest, for price fixing on electrical equipment. All the defendants pleaded guilty. GEs fine was almost half a million dollars, damages it stipendiary to utilities who had purchased price-fixed equipment came to at least $50 million, and three GE managers received jail sentences and several others were forced to leave the company. During the 1960s and 1970s GE grew in all fields.In 1961 it opened a research center for aerospace projects, and by the end of the decade had more than 6,000 employees involved in 37 projects related to the moon landing. In the 1950s General Electric entered the figurer business. This venture, however, proved to be such a drain on the companys profits that GE sold its computer business to Honeywell in 1971. By the late 1960s, GEs management began to feel that the company had become too large for its existing structures to accommodate. Accordingly, the company instituted a massive organizational restructuring. Under this restructuring program, the number of distinct operating units within the company was cut from more than 200 to 43. Each new section operated in a particular market and was headed by a manager who reported to management just beneath the corporat e policy board. The sections were classified into one of three categoriesgrowth, stability, or no-growthto facilitate divestment of unprofitable units. When this reorganization was complete, General Electric made what was at the time the largest corporate purchase ever. In December 1976 GE paid $2.2 one thousand million for Utah International, a major coal, copper, uranium, and ironminer and a producer of natural gas and oil. The company did 80 percent of its business in foreign countries. inside a year Utah International was contributing 18 percent of GEs total profit. In the meantime, GE scientist Ivar Giaever was a corecipient of the 1973 Nobel Prize in Physics for his discoveries in the area of superconductive tunneling. Giaever became the second GE employee to be honored with a Nobel Prize. The divestiture of its computer business had left GE without any capacity for manufacturing integrated circuits and the high-technology products in which they are used. In 1975 a study of the companys status concluded that GE, one of the first U.S. electrical companies, had fallen far undersurface in electronics. As a result, GE spent some $385 million to take on Intersil, a semiconductor manufacturer Calma, a producer of computer graphics equipment and four software producers. The company also spent more than $100 million to expand its microelectronics facilities. Other fields in which GE excelled were in difficulty by the mid-1970s, most notably nuclear power. As plant construction costs skyrocketed and environmental concerns grew, the companys nuclear power division began to fall behind money. GEs management, however, was convinced that the problem was temporary and that sales would pick up in the future. When by 1980 General Electric had received no new orders for plants in five years, nuclear power began to look more and more like a prime candidate for divestment. GE eventually pulled out of all aspects of the nuclear power business except for providing serv ice and fuel to existing plants and conducting research on nuclear energy.Though General Electrics growth was tremendous during the 1970s and earnings tripled between 1971 and 1981, the companys stock performance was mediocre. GE had become so large and was involved in so many activities that some regarded its fortunes as capable only of following the fortunes of the country as a whole. GEs economical problems were mirrored by its managerial reshuffling. When John F. (Jack) Welch, Jr., became chairman and CEO in 1981, General Electric entered a period of radical change. Over the next several years, GE bought 338 businesses and product lines for $11.1 gazillion and sold 232 for $5.9 one thousand million. But Welchs first order of business was to return much of the control of the company to the periphery. Although he decentralized management, he retained predecessor Reginald Joness system of classifying divisions according to their performance. His goal was to make GE number oneor two in every field of operation. One branch of GEs operations that came into its own during this period was the General Electric Credit Corporation, founded in 1943. Between 1979 and 1984, its assets doubled, to $16 zillion, primarily because of expansion into such markets as the leasing and selling of life-threatening industrial goods, inventories, real estate, and insurance. In addition, the leasing operations provided the parent company with tax shelters from accelerated depreciation on equipment developed by GE and then undertake by the credit corporation. Factory automation became a major activity at GE during the early 1980s. GEs acquisitions of Calma and Intersil were essential to this program. In addition, GE entered into an agreement with Japans Hitachi, Ltd. to manufacture and market Hitachis industrial robots in the United States. GE itself spent $300 million to robotize its locomotive plant in Erie, Pennsylvania. Two years later GEs aircraft engine business also part icipated in an air force plant-modernization program and GE later manufactured the engines for the controversial B-1B bomber. In 1986 General Electric made several extremely important purchases. The largestin fact, the largest for the company to that datewas the $6.4 one thousand million purchase of the Radio Corporation of American (RCA), the company GE had helped to found in 1919. RCAs National Broadcasting Company (NBC), the leading U.S. television network, brought GE into the broadcasting business in full force. Although both RCA and GE were heavily involved in consumer electronics, the match was regarded by industry analysts as beneficial, because GE had been shifting from manufacturing into service and high technology. After the merger, almost 80 percent of GEs earnings came from services and high technology, compared to 50 percent six years earlier.GE divested itself of RCAs famous David Sarnoff Research Center, because GEs labs made it unnecessary. In 1987 GE also sold its own and RCAs television manufacturing businesses to the French company Thomson in exchange for Thomsons medical diagnostics business. GE justified the merger by citing the need for size to compete effectively with large Japanese conglomerates. Critics, however, claimed that GE was running from foreign competition by increasing its defense contracts (to almost 20 percent of its total business) and its service business, both of which were insulated from foreign competition. In 1986 GE also purchased the Employers Reinsurance Corporation, a financial services company, from Texaco, for $1.1 billion,and an 80 percent interest in Kidder Peabody and Company, an investment banking firm, for $600 million, greatly broadening its financial services division. Although Employers Reinsurance contributed steady to GEs bottom line following its purchase, Kidder Peabody lost $48 million in 1987, in part because of the settlement of insider trading charges. Kidder Peabody did come back in 1988 to co ntribute $46 million in earnings, but the acquisition still troubled some analysts. GE owned 100 percent of Kidder Peabody by 1990. General Electrics operations were divided into three business groups in the early 1990s technology, service, and manufacturing. Its manufacturing operations, traditionally the core of the company, accounted for roughly one-third of the companys earnings. Still, GE continued to pour more than $1 billion annually into research and development of manufactured goods. Much of that investment was directed at energy conservationmore efficient light bulbs, jet engines, and electrical power transmission methods, for example. In 1992 GE signaled its intent to step up overseas activity with the purchase of 50 percent of the European appliance business of Britains General Electric Company (GEC). The two companies also made agreements related to their medical, power systems, and electrical distribution businesses. Welch said that his aim was to make GE the nations largest company. To that end, General Electric continued to restructure its existing operations in an effort to become more competitive in all of its businesses. Most importantly, the company launched an aggressive campaign to become dominant in the festering financial services sector. GEs aggressive initiatives related to financial services reflected the fact that the service sector represented more than three-quarters of the U.S. economy acquittance into the mid-1990s. Furthermore, several service industries, including financial, were growing rapidly. GEs revenues from its giant NBC and GE cap divisions, for example, rose more than 12 percent annually from about $14.3 billion in 1988 to more than $25 billion in 1994. Encouraged by those gains, GEs merger and acquisition activity intensified. For example, in 1994 the company offered a $2.2 billion bid for Kemper Corp., a diversified insurance and financial services company (it retracted the bid in 1995). GEs sales from services as a percentage of total revenues increased from 30 percent in 1988 to nearly 45 percent in 1994, and neared 60 percent by 1996.The troubled Kidder Peabody unitremained a drag on GEs services operations, leading to the companys late 1994 decision to liquidate the unit. As part of the liquidation, GE sold some Kidder Peabody assets and operations to Paine Webber Group Inc. for $657 million. In contrast to its service businesses, GEs total manufacturing receipts remained stagnant at about $35 billion. Nevertheless, restructuring was wageing off in the form of fat profit margins in many of its major product divisions. Importantly, GE made significant strides with its Aircraft locomotive engine Group. Sales fell from $8 billion in 1991 to less than $6 billion in 1995, but profit margins rose past 18 percent after dipping to just 12 percent in 1993. Reflective of restructuring efforts in other GE divisions, the company accomplished the profit growth by slash the engineering workforce f rom 10,000 to 4,000 and reducing its overall Aircraft Engine Group payroll by about 50 percent, among other cost-cutting moves. Despite a global economic downturn in the early 1990s, GE managed to keep aggregate sales from its technology, service, and manufacturing operations stable at about $60 billion annually. More importantly, net income surged steadily from $3.9 billion in 1989 to $5.9 billion in 1994, excluding losses in the latter year from Kidder Peabody operations. In 1994, in fact, General Electric was the most profitable of the largest 900 U.S. corporations, and was trailed by General Motors, Ford, and Exxon. Revenues reached $70 billion by 1995, the same year that the companys market value exceeded $100 billion for the first time. The late 1990s saw General Electric reach a number of milestones. In 1996 the company celebrated its 100th year as part of the Dow Jones business leader GE was the only company remaining from the original list. That year, NBC joined with Micro soft Corporation in launching MSNBC, a 24-hour cable television news channel and network news service.Overall revenues exceeded the $100 billion mark for the first time in 1998, while the continuing stellar growth at GE peachy led that unit to generate nearly half of GEs revenues by the end of the decade. Acquisitions in the late 1990s centered on two of the companys growth initiatives services and globalization. In 1996 the GE Appliances division acquired a 73 percent interest in DAKO S.A., the leading manufacturer of gas ranges in Brazil. GE Capital Services expanded in Japan through the 1996 purchase of an 80 percent stake in Marubeni Car dodge Co., an auto leasing firm the 1998 acquisitions of Koei Credit and the consumer finance business of LakeCorporation and the 1998 formation of GE Edison vitality following the purchase of the sales operations of Toho Mutual Life Insurance, which made GE Capital the first foreign company involved in the Japanese life insurance market. In early 1999 GE Capital made its largest deal in Japan to date with the purchase of the leasing business of Japan Leasing Corporation, a business with $7 billion in leasing assets. Then in late 1999 GE Capital agreed to purchase the remaining assets of Toho Mutual for 240 billion ($2.33 billion) Toho had collapsed during 1999 after suffering huge losses from the thousands of old, unprofitable policies in its portfolio, and a large portion of its liabilities were to be covered by Japans life insurance association. Expansion also continued in Europe for GE Capital, highlighted by the 1997 acquisition of Woodchester, one of the largest financial services companies in Ireland. Overall, GE spent some $30 billion during the 1990s in completing more than 130 European acquisitions. Under Welchs leadership, General Electric in the late 1990s also adopted six sigma, a quality control and improvement initiative pioneered by Motorola, Inc. and AlliedSignal Inc. The program aimed to cut costs by reducing errors or defects. GE claimed that by 1998 six sigma was yielding $1 billion in annual savings. The company also continued to restructure as necessary, including taking a $2.3 billion charge in late 1997 to close redundant facilities and shift production to cheaper labor markets. During 1999 General Electric adopted a fourth growth initiative, e-business (globalization, services, and six sigma being the other three). Like many long companies, GE reacted cautiously when the Internet began its late 1990s explosion. But once he was convinced of the new mediums potential, Welch quickly adopted e-commerce as a key to the companys future growth. Among the early ventures was a plan to begin selling appliances through Home Depot, Inc.s web site, a move aimed at revitalizing lagging appliance sales. In late 1999 Welch announced that he planned to retire in April 2001, but he did not name a successor. At the time, General Electric was one of the worlds fastest growing and most profi table companies, and boasted a market capitalization of $505 billion, second only to Microsoft Corporation. Revenues for 1999 increased 11 percent to $111.63 billion while net income rose 15 percent to $10.72 billion.These figures also represented huge gains since Welch took over in 1981, when the company posted profits of $1.6 billion on sales of$27.2 billion. Welch was not done yet, however. In October 2000 he swooped in to break up a planned $40 billion merger of United Technologies Corporation and Honeywell International Inc. The Honeywell board accepted GEs $45 billion bid, which was set to be the largest acquisition in the companys history. Honeywell was coveted for its aerospace unit, a $9.9 billion business involved in flight-control systems, onboard environmental controls, and repair services. The addition of this unit was pass judgment to significantly boost the GE Aircraft Engines unit, creating a global aerospace giant. Welch agreed to stay on at General Electric throug h the end of 2001 in order to see the acquisition through to fruition. He did, however, name a successor soon after this deal was announced. In November 2000 Jeffrey R. Immelt won the succession battle and was named president and chairman-elect. Immelt, who joined GE in 1982, had most recently served as president and CEO of GE Medical Systems, a unit with revenues of $12 billion. Immelts two chief rivals in the race to become only the ninth CEO in GEs long history, W. James McNerney Jr., head of GE Aircraft Engines, and Robert L. Nardelli, head of GE Power Systems, soon left the company to become CEOs of 3M Company and Home Depot, respectively. Rather than serving as a capstone for a much admired reign of leadership, the Honeywell deal instead provided a sour ending for the Welch era. In the summer of 2001 the European Commission blocked the deal on antitrust grounds as 11th-hour negotiations between the European regulators and GE executives broke down. Welch finally retired soon th ereafter, with Immelt taking over as chairman and CEO in phratry 2001. Meanwhile, one last major deal was initiated prior to the leadership handover. In July 2001 General Electrics GE Capital unit agreed to pay $5.3 billion for Heller Financial Inc., a global commercial finance company based in Chicago that had total assets of about $19.5 billion.This deal, the second largest in GE history, behind only the 1986 deal for RCA, was consummated in October 2001. Also during 2001, GE illume had the largest product launch in its history when it introduced the GE promulgate line of light bulbs, which were touted as providing a cleaner, crisper light because the bulbs filtered out the duller yellow rays commonly produced by standard incandescent light bulbs. GE began feeling the cause of the economic downturn that year as revenues fell nearly 3 percent, to $125.68 billion profits nevertheless increased 7.5percent, reaching $13.68 billion, though that was a far cry from the yearly 13 to 1 5 percent increases that Wall Street came to expect from GE during the Welch era. Immelt began to place his imprint in earnest on GE in 2002 through major restructurings and several significant acquisitions. Midyear he launched a reorganization of GE Capital. The financial services unit was divided into four separate units to streamline management, increase oversight, and improve transparency.The new units were GE Commercial Finance, GE Consumer Finance, GE Equipment Management (involved in equipment leasing and loans), and GE Insurance. Also during 2002, the GE Appliances and GE Lighting units were combined into a new GE Consumer Products unit. On the acquisitions front, NBC widened its media holdings through the April 2002 acquisition of Hialeah, Florida-based Telemundo Communications Group Inc. for $2.7 billion and the $1.25 billion purchase of the Bravo cable network, completed in December of that year. Telemundo owned the second largest Spanish-language television network, as w ell as nine U.S. TV stations and the leading TV station in Puerto Rico. NBC hoped to tap into the growing Hispanic market via the deal. Bravo was known for its intelligent, arts-oriented programming such as Inside the Actors Studio, and it provided NBC with its first entertainment-oriented cable property. Also during 2002, GE differentiation Materials acquired BetzDearborn, a leading maker of water treatment chemicals, from Hercules Inc. for $1.8 billion. In addition, GE Industrial Systems spent about $777 million for Interlogix, Inc, an Austin, Texas-based manufacturer of electronic security products and systems for commercial, industrial, and residential use. All told, General Electric spent approximately $9 billion on industrial acquisitions alone during 2002. Concerns about whether the company could continue its stellar earnings performance and about its accounting practices sent GEs stock sharply lower in 2002. The stock ended the year trading at $24.35 per share, less than ha lf of the high price for 2001. Once again, profits rose modestly, to $14.12 billion, or about 3 percent. Taking advantage of the economic downturn to acquire desirable assets from distressed sellers, GEs deal-making appetite grew only larger in 2003. That year was the companys biggest acquisition year yet, with deals worth a collective $30 billion either completed or announced. In August the company agreed to buy Transamerica Finance Corporations commercial lending business from AegonN.V. of The Netherlands for $5.4 billion.The deal, which added about $8.5 billion in assets to the GE Commercial Finance unit, closed in January 2004. Also during the summer of 2003 GE sold three of its slower growing insurance businesses Financial Guaranty Insurance Co., Tokyo-based GE Edison Life Insurance Co., and GEs U.S.-based auto and homeowners insurance unit. About $4.5 billion was raised through these divestments. As part of its effort to shift emphasis to higher growth fields, General Electric completed two significant acquisitions in healthcare. In October 2003, Instrumentarium Corp. was acquired for $2.3 billion. Based in Finland, Instrumentarium was a major medical-equipment maker with a product line that featured devices for anesthesia, critical care, and patient monitoring.That same month, GE agreed to buy Amersham plc, a British firm specializing in diagnostics agents used during scans of the body for disease, gene-sequencing tools, and protein separation for high-tech drug development. Consummated in April 2004 and valued at about $9.5 billion, the purchase of Amersham stood, very briefly, as the largest acquisition in General Electric history. Following the Amersham acquisition, GE Medical Systems, now a $14 billion business, was renamed GE Healthcare. Based in the United Kingdomthe first GE unit to be headquartered outside the United StatesGE Healthcare was headed by Amershams former chief executive, William Castell Castell was also named a GE vice-chairman, the first outsider to be so named. Meanwhile, also in October 2003, General Electric announced an even larger deal, a $14 billion acquisition of Vivendi Universal Entertainment (VUE), the U.S. unit of the French group Vivendi Universal S.A. Among VUEs assets were the Universal Pictures movie studio, the curiosity film unit Focus Features, the Universal Television production outfit, cable channels USA Network and Sci-Fi Channel, and theme parks in California, Florida, Japan, and Spain. Upon completion of the deal in May 2004, NBC was merged with VUE to form NBC Universal, which was 80 percent owned by GE and 20 percent by Vivendi. This expansion into entertainment contented mimicked earlier combinations involving the ABC and CBS television networks. Continuing his transformative leadership, Immelt reorganized GEs 13 business units into 11 rivet on specific markets and customers. The reorganization, effective at the beginning of 2004, brought similar businesses together in an effort t o increase sales and cut costs. The most significant of the changes included combining the firms aircraftengines business and its rail-related operations in a new GE Transportation unit merging most of GE Industrial Systems with GE Consumer Products to form GE Consumer & Industrial, which focused on lighting products, appliances, and integrated industrial equipment, systems, and services and forming GE Infrastructure from certain operations of GE Industrial Systems and GE Specialty Materials. Also in January 2004, GE continued disposing of its insurance operations.That month, General Electric launched an initial public offering (IPO) of about one-third of the stock of the newly formed Genworth Financial, Inc., which consisted of the bulk of GEs life and mortgage insurance businesses. The IPO was planned for completion by mid-2004, after which GE planned to make Genworth fully independent within three years. What was left of GE Insurance was mainly its reinsurance business, which was long rumored to be another candidate for divestment. Overall, through the myriad moves engineered during just a few years in charge, Immelt was seeking to cut General Electrics reliance on financial services and mature industrial businesses in favor of such higher growth areas as healthcare and entertainment. He was also building operations in fast-growing economies such as Chinas. By 2005, GE was aiming to outsource $5 billion of parts and services from China and simultaneously grow sales in China to a like figure. Further divestments were also expected, and there had long been speculation that the slow-growing lighting and appliances businesses were prime candidates. Through initiatives such as these, Immelt hoped to return General Electric to double-digit earnings growth by 2005. check more http//www.answers.com/topic/general-electric-companyixzz1c6xpDIo9