Back in the day, GE stock did more splits than a battalion of ballerinas. On paper, it became the highest value American corporation, a giant among lesser giants. Since its peak, that stock has been steadily declining to the horror of people whose job it is to keep the money circulating so the boom continues. It hasn’t worked, so now comes more of a reality based split.
The company will break up into three separate corporations,
another way to boost value, at least in the hope chest of the corporate ballerinas.
So, the company founded in 1892, the love child of Thomas Edison and J.P.
Morgan, will split off health care in 2023 and its energy division a year
later.
The company sold its financial business and NBC in recent
years. Earlier it got out of the nuke business. So you might be asking what
will be left after the spinning and splitting this time? They still make
lightbulbs. Somewhere. They still license their name. Home appliances.
Software. Water systems.
As chief executive, the late Jack Welch quintupled the
company’s net worth, at least on paper. He picked a successor who couldn’t
possibly continue that trend and didn’t. Fortunes turned around almost at once.
The slide continued with an added kick from the 2008 financial mess that
affected everyone.
That slimmed headcount began to rise again. New
competitors were dogs that caught the cars they were chasing. The Dow Jones
Industrial averages kicked them off the list -- the last of Dow’s original 30
industrials to survive.
They moved their headquarters from Connecticut to
Massachusetts. That was a physical move, but essentially meaningless. The
real headquarters was in Welch’s hat and Welch had retired.
It wasn’t entirely the fault of inept management and the
financial crisis that felled the uber-giant. This is not Sears or
Ling-Temco, or the original Standard Oil or the Pennsylvania Railroad which
succumbed to either government demands or bad leadership. Some smaller giants
went on diets since their high points.
It wasn’t a stand-alone company that either failed or shrank
from absent or wrong-headed innovation like IBM, Xerox, Kodak or J.C.
Penney. And it wasn’t and isn’t crooked like Enron.
This is a company that was everywhere. One of GE’s
post-Jack-Welch CEOs said the era of the giant conglomerate is over. It
certainly is. At least for this one.
SHRAPNEL:
--Speaking of former GE divisions, one time colleague Brian
Williams says he’s leaving NBC News after 28 years. An occasional teller of
tall tales who survived one of them, Williams IMHO is the best anchor on the
air anywhere at the moment. Did he jump or was he pushed?
I’m Wes Richards. My opinions are my own but you’re welcome
to them. ®
Any Questions? wesrichards@gmail.com
© WR 2021
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