General Electric (GE) was the foundational industrial institution of the American Century. Formed in 1892 through the merger of Thomas Edison's Edison General Electric Company and the Thomson-Houston Electric Company (orchestrated by the well-known financier J.P. Morgan), GE essentially electrified the United States. For a century, the company operated as a sprawling, powerful conglomerate. If a product required electricity, from a toaster to a power plant turbine to a diesel locomotive, GE manufactured it. It was the core, gold standard of American corporate management, famously operating the prominent Crotonville leadership academy to train the nation's top executives.
The Jack Welch Era and GE Capital
The financial trajectory of GE was permanently altered during the well-known, controversial two-decade tenure of then-CEO Jack Welch (1981-2001). Welch was famously obsessed with generating extensive, predictable quarterly earnings growth to appease Wall Street. To achieve this, he expanded GE Capital. Originally designed simply to provide loans to consumers buying GE refrigerators, GE Capital morphed into a major, unregulated "shadow bank." It bought commercial real estate, leased airplanes, and issued large amounts of complex debt. Because GE possessed a pristine AAA credit rating, it could borrow money cheaply and lend it out at an extensive profit. By the end of Welch's tenure, this risky financial engineering engine generated over half of the entire extensive conglomerate's profit.
The Immelt Era and The Alstom Disaster
The prominent, leveraged house of cards built by Welch violently collapsed during the 2008 financial crisis under his successor, Jeff Immelt. GE Capital, exposed to toxic debt, was nearly destroyed, requiring a government bailout to survive. Immelt was forced to dismantle the significant banking division. Desperate to pivot GE back to its "industrial roots," Immelt executed an extensive, catastrophic acquisition in 2015, paying $10.6 billion for the power division of the French conglomerate Alstom. Immelt bet on the future of natural gas turbines, failing to foresee the, global explosion in cheap renewable energy (solar and wind). The Alstom deal resulted in large, multi-billion-dollar write-downs and essentially destroyed GE's balance sheet.
The Culp Turnaround and the Breakup
In 2018, facing imminent bankruptcy and having been humiliatingly kicked out of the Dow Jones Industrial Average, the board hired Larry Culp (the first outsider CEO in GE history). Culp executed a severe, agonizing corporate triage. He slashed the dividend to a penny, sold off the biopharma and locomotive divisions to pay down the heavy debt, and instituted, disciplined operational controls. In 2021, Culp announced the unthinkable: the complete, primary dissolution of the 130-year-old conglomerate. GE would split into three independent, publicly traded companies: GE HealthCare, GE Vernova (power and wind), and GE Aerospace.
The Surviving Titan: GE Aerospace
Today, the corporate entity that retains the "GE" ticker symbol is essentially just GE Aerospace. Stripped of the, toxic baggage of the conglomerate structure, GE Aerospace is a focused, profitable leader of the commercial aviation industry. It operates a lucrative "razor and blades" business model. It sells prominent, complex jet engines (like the LEAP engine, built in a considerable joint venture with Safran) to Boeing and Airbus. The true profit, however, is generated by the "aftermarket", signing airlines to lucrative, multi-decade maintenance and spare parts contracts, ensuring that the legacy of Thomas Edison survives as an efficient, pure-play aviation giant.
