Features - Firm Guidance
AUGUST 7, 2000
General Electric
BY JOE SAWARD
General Electric may only be a small sponsor on the rear wing of the Ferrari but it is a vast conglomerate which builds everything from aircraft engines to light bulbs, nuclear power plants to railway locomotives not to mention advanced plastics and medical equipment. It owns a huge financial services company and the NBC television network. The Fairfield, Connecticut-based company supplies Ferrari with technological information from its research into advanced plastics and ceramics.
The company was established in New York City in 1892 in a merger between Thomson-Houston and the Edison company. Thomas Edison was one of the original directors although he left the company after only two years. The firm concentrated on developing new products and so invested heavily in research into all manner of machinery which was sold under the GR and Hotpoint labels. The development of new appliances led to an investment in radio in the 1920s when it joined forces with Westinghouse and AT&T to establish RCA, the Radio Corporation of America. GE later sold its shares in RCA because of the threat of anti-trust action from the US government. The company boomed during World War II and the prosperous 1950s and invested in the computer business as early as 1956, although this business was later sold off to Honeywell in the 1970s. The product range continued to expand into nuclear reactors, jet engines, advanced plastics and in the 1980s the company had built up annual revenues of $25bn, but the 1980s saw GE selling off some of its less profitable divisions to concentrate on electronics, plastics and financial services. It repurchased RCA in 1986 for $6.4bn and in the early 1990s began to expand globally, a process which is continuing today.