Good Bye GE

[LowRyter]

GE has been taken from the Dow Jones Industrial Average.  It's stock is down 80% from the high.

GE was founded by Thomas Edison and was in the Dow from the beginning and continuously for 110 years.  In the '90s it's CEO, "Neutron" Jack Welch, was considered one of the greats. GE has many high tech and consumer businesses, like appliances, electrical generation, and jet engines. He acquired many other businesses, like NBC, to made it an even bigger conglomerate. 

I wasn't paying attention and was shocked when I heard the news last week.  GE will be replaced by Walgreens.

A sign of the times?

http://money.cnn.com/2018/06/19/investing/ge-dow-jones-walgreens/index.html





You might recall, this is one of the reasons that Leno got the tonight show.  https://youtu.be/sOEBgSBfko0

[Dilliw]

I have been watching this for a while and it was obvious that it was just a matter of time..pitty.

I wonder who is going to support all those jet engines..a big deal as I have 1000s' of hours of having them push me around the planet.

:-(

I've been working in Schenectady for the past year and you can really see the draw down of young engineers from the Power campuses.  Bad timing as Schenectady has done a lot in economic development over the past few years to attract young professionals and now they are losing their "anchor tenant." 

[Lannis]

Very few companies last as long as GE did.   

Once AT&T couldn't make $2 a month from each of 100,000,000 subscribers by renting telephones to them, they went downhill and off the radar .... Once Sears & Roebuck failed to anticipate on-line purchasing and failed to use their already-in-place position to forestall Amazon, they were hosed ...

These big companies aren't all run by geniuses.   Jack Welch's philosophy of firing what he considered to be his bottom 10% performing employees every year and hiring new ones eventually got him.

Just like the old railroads.    If anyone asked the Big Money railroad magnates of the early 20th century what their job was, they'd say "We're running a Railroad!"    Actually, their job was providing transportation, and because they paid no attention to trucks and airplanes (because trucks and airplanes weren't railroads) and they ALL went TU ....

Lannis

[Gliderjohn]

I find it amazing how short sighted some company leadership can have. Sears, Pennys and Wards were almost automatically set to go into the internet sales thing but none of them seemed to see that or want to go that direction instead sticking with the old mail order format that had used for decades.
Don't really know how GE got to where they are now but maybe to much diversity to quickly instead of focusing on fewer products. As Kirby pointed out the jet engine thing is huge, will be interesting watch.
GliderJohn

[Sheepdog]

I applied for a job with GE’s aircraft engine division back in the mid-eighties. At the end of the interview, I withdrew my application. I was not impressed with their management approach...

[RinkRat II]

   This just makes good headlines for the stock analyst talking heads. Much ado about nothing. GE will still be here to support it's profitable divisions, selling off divisions it had no business being in. The errors were made between Welch's regime and now. Flannery's in now and has the daunting task of sell off and clean up. They'll be back, besides the Dow is not really a realistic picture of the economy, S&P is.  Adjusted for inflation my $ .0075

        Paul B

[mjptexas]

Great article in Fortune about what happened.  Net, net: a number of really bad decisions by the outgoing CEO.  GE was managed into oblivion, in a very short time.


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[pmillar]

As a GE Capital Employee up to the point Wells Fargo bought us 2 years ago (frying pan to the fire, you say?) I'll throw this out there. GE management used much of the billions received from the sale of various business units to fund stock purchases. Well, the stock price kept plummeting and the underfunded pensions fell deeper into the hole.

Seems to me, reinvesting into the company or paying down liabilities might have been a better use of funds (unless your bonus was tied to stock prices maybe... which didn't work out too well anyhow.)

Regarding Wells Fargo (off topic), all their skeletons started to come out of the closet about three months after they bought us.  Fun.

[LowRyter]

   This just makes good headlines for the stock analyst talking heads. Much ado about nothing. GE will still be here to support it's profitable divisions, selling off divisions it had no business being in. The errors were made between Welch's regime and now. Flannery's in now and has the daunting task of sell off and clean up. They'll be back, besides the Dow is not really a realistic picture of the economy, S&P is.  Adjusted for inflation my $ .0075

        Paul B

Great point but what is GE once it's broken up? Stoves?  Jet engines?  Power plants?  Light bulbs?   

We know what GE is from its manufacturing legacy, but what will it be known for going on?

BTW-  I still get a kick out of the Letterman bit.  GE bought NBC in '86 and sold it in '09. 

[RinkRat II]

#1 Aviation
 #2 Power and power distribution
  #3  Industrial turbines.
  GE Healthcare will be a stand alone company as will it's ties to Baker Hughes Services

    Paul B

[Nic in Western NYS]

Very few companies last as long as GE did.   

The reports of GE's death are greatly exaggerated.  It's just coming off the DJ, not going out of business!  (And its stock went up 7% today.)

[rodekyll]

GE dropped incandescent lights a while ago, and just recently I read where they got a contract to power a bunch of new commercial airliners.  They've also got as many or powerplants in the air as anyone else, with the attendant maintenance and repair business.  "Not on the DOW" and "out of business" aren't the same thing.

 The flap over it is a bit overblown.  When I see this sort of unsubstantial story I always look around to see what they're trying to distract me from.  And I see Harley Davidson.

[Texas Turnip]

'My financial adviseers, Slickem & Stickem' told me to buy Tandy Stock, Toys R Us. Sears, etc. I bought Guzzis and lost money, but boy, Howdy, do I have memories.

Tex

[Lannis]

The reports of GE's death are greatly exaggerated.  It's just coming off the DJ, not going out of business!  (And its stock went up 7% today.)

That may very well be, but it's not what it was.   

Look at Westinghouse ... bet GE's sliding the same way.

But you're right about "off the Dow" Not Equal To "Out of Business".

Lannis

[LowRyter]

The reports of GE's death are greatly exaggerated.  It's just coming off the DJ, not going out of business!  (And its stock went up 7% today.)

I didn't want to imply that GE was broke or going out of business, just that this icon American business was being ousted from the Dow.

I was honestly taken by surprise by the news.  I was still living in the Jack Welsh world and didn't know the company has hit the skids in the derivative, too-big-to-fail, highly leveraged world.

I've learned quite a bit about it from the posts I've read here. 

[rschrum]

Jeff Immelt, certainly didn't help things.

[elvisboy77]

I didn't want to imply that GE was broke or going out of business, just that this icon American business was being ousted from the Dow.

I was honestly taken by surprise by the news.  I was still living in the Jack Welsh world and didn't know the company has hit the skids in the derivative, too-big-to-fail, highly leveraged world.

I've learned quite a bit about it from the posts I've read here.

I agree it is another step in the US's failing manufacturing sector decline.  I hate to say that but it seems to be coming true.

It does make one wonder when the Dow Jones Industrial Average will also become irrelevant.  My hope is never, but....

[Nic in Western NYS]

No stock market analyst here, but GE got in big trouble when they started earning more from their financial arm than from their core businesses.  That easy money from dealing credit dried up and they have a boatload of debt - selling assets to reduce debt by 25 billion.  I know a dollar isn't what it used to be but 25 billion is still a chunk of change.

[twowings]

Yeah, a billion here and a billion there and pretty soon it adds up to real money...

[Lannis]

Jeff Immelt, a socialist, certainly didn't help things.

You have only used the word once, but I do not think it means what you think it means .... 

[rocker59]

GE is huge in railroading.

[Shorty]

I never even felt it slide out of my portfolio.....

[Old Jock]

I worked for GE in the industrial turbine business for a bit over 10 years and it was a positive experience from my point of view

I agree with Nic when GE Capital started to become the be & end all with less emphasis on their core manufacturing arms, then it all went badly south.

I don't believe it's the end Welch turned them from a company in real deep trouble to a world beater, they can be resurrected, but leadership and direction is key

[chuck peterson]

K O D A K .......poof! Watched them completely miss the changing foto world...gone. Vanished. Erased. Nada. All that's left are two unopened boxes of Kodachrome.

[Two Checks]

Kodak is still around. They still make photographic paper and chemistry and professional photo printers and lithograhic printers. They thought they were Kodak and nobody could touch them. They found differently.


They ignored two competitors and the coming digital imaging and hung on to film. Film is still better than digital hut digital gives a pretty good result without the use of chemistry or silver recovery.

[twowheeladdict]

My Dad started his career with GE in the early 60s.  His goal was to climb the corporate ladder and with GE that meant being moved all over the world.  He decided he did not want to do that to his young family and left the company.  He still holds GE stock from when he was working for them and it is probably worth the same as when he got it almost 60 years ago. 

[Huzo]

I have been watching this for a while and it was obvious that it was just a matter of time..pitty.

I wonder who is going to support all those jet engines..a big deal as I have 1000s' of hours of having them push me around the planet.

:-(

Would some of them have been Rolls Royce..?

[Old Jock]

Engine business is alive & well I have quite a few mates who work in it

They have only dropped off the Dow they are not in receivership for goodness sake 

As for Rolls Royce they are hardly a shining example to follow given the RB 211 debacle, a very detailed book on that crisis by Phillip C Ruffles an RR engineer (it's very technical, geeky and dry reading) is pretty shocking.

[bad Chad]

GE is no longer an American company, at least not in the way many of us wax nostalgically about great old American companies.

GE, like so many former American companies has morphed into a multinational conglomerate.  They may in many cases still be headquartered in the US, but by my definition they are no longer, "Good ol' American companies."

[roadscum]

Change marches on and has since the beginning of time, nut'n to worry about unless your a GE stock holder and haven't been paying attention to it's demise. Bob got it right: https://www.youtube.com/watch?v=e7qQ6_RV4VQ


Paul