For much of the 20th century, General Electric (GE) was the ultimate symbol of American innovation, stability, and corporate might. Founded in 1892 by Thomas Edison’s associates, GE was a pioneer in electricity, aviation, appliances, and industrial engineering. By the 1980s, under legendary CEO Jack Welch, GE transformed into a diversified global powerhouse — part manufacturer, part bank, part media empire.
Welch was the embodiment of shareholder capitalism. Under his watch (1981–2001), GE’s market value grew from $14 billion to over $600 billion, making it the most valuable company in the world by 2000. Its stock became a blue-chip staple. It was one of just 12 companies continuously on the Dow Jones Industrial Average from 1907 to 2018.
GE Capital, its financial services arm, quietly grew into one of the largest shadow banks in the world — providing loans, insurance, mortgages, and leasing services. At its peak, GE Capital accounted for over 40% of GE’s total profits. Few noticed how dependent the company had become on non-industrial revenue.
The company was sprawling — making light bulbs, jet engines, X-ray machines, wind turbines, TV content (through NBC), and even providing credit cards. It had become a metaphor for complexity disguised as strength.
The Turning Point: The Myth of Immortality
When Jeff Immelt took over from Welch in 2001, he inherited more than just a conglomerate — he inherited one of the most complicated companies on Earth. GE had over 300,000 employees, 11 major business divisions, and financial tentacles that reached into every sector of the global economy.
But the world was changing.
GE’s internal culture was slow to recognize just how much risk had been embedded in GE Capital. During the 2008 financial crisis, GE Capital’s exposure to commercial real estate, subprime loans, and short-term debt markets nearly brought down the entire company. Only a $139 billion government debt guarantee saved it from collapse. The company, once seen as safer than banks, had become “too big to fail” — and too fragile to function.
GE survived the crash, but its foundation had cracked. The stock, which had once peaked at $60 per share in 2000, dropped to $6 in 2009. It never fully recovered.
Missteps, Acquisitions, and a Declining Empire
Rather than simplify, GE doubled down on complexity. In the 2010s, under pressure to reignite growth, GE made a series of bold — and mostly disastrous — acquisitions:
🧨 The $10 Billion Alstom Deal (2015)
GE acquired the French energy giant’s power division to expand into gas turbines. The timing was catastrophic. Global demand for gas power plummeted, and Alstom’s assets underperformed massively. The deal became known as one of the worst acquisitions in GE’s history.
💸 Aggressive Share Buybacks
Between 2015 and 2017, GE spent over $40 billion buying back its own stock — often at prices above $30. Today, the stock trades under $10 (adjusted for the 1-for-8 reverse split in 2021). That capital could have funded R&D, paid down debt, or supported dividends.
🏦 The GE Capital Hangover
Even after the crisis, GE failed to unwind GE Capital fast enough. Regulatory scrutiny rose, especially after it was designated a SIFI (systemically important financial institution). It took nearly a decade to fully exit financial services.
🏭 Overpromising in Renewables & Power
GE overinvested in power assets just as the global shift toward renewables upended the traditional utility market. Demand shifted toward decentralized energy, but GE was still betting on large turbines and legacy grids.
The Collapse
By 2018, GE was in freefall.
- The stock had lost over 70% of its value in 2 years.
- The company slashed its dividend — once considered sacred — to just 1 cent.
- Longtime bondholders were stunned as GE lost its AAA credit rating.
- GE Power, once its profit engine, reported a $23 billion goodwill impairment — one of the largest write-downs in industrial history.
- The company was removed from the Dow Jones Industrial Average after 111 years.
CEO after CEO tried to stabilize the ship: Jeff Immelt (2001–2017), John Flannery (2017–2018), then Larry Culp (2018–2024), who launched a full-scale restructuring.
The Breakup
In 2021, GE announced what would’ve been unthinkable two decades earlier: it would split into three separate companies:
- GE Aerospace – Jet engines and aviation technology
- GE HealthCare – Imaging, diagnostics, and medical tech
- GE Vernova – Power, energy, and renewables
The breakup was finalized in 2024, marking the end of General Electric as a unified company.
The industrial titan that once made refrigerators, nuclear reactors, light bulbs, sitcoms, loans, and jet engines was now a memory. The name survives, but the era of GE as a global empire is over.
The Numbers Behind the Decline
| Year | Event | Key Numbers |
|---|---|---|
| 2000 | Peak value | $600B market cap, $60/share stock |
| 2008 | Financial crisis | $139B in debt guarantees |
| 2015 | Alstom acquisition | $10.6B deal |
| 2016 | Buybacks peak | $21B spent in 1 year |
| 2018 | Removed from Dow | End of 111-year run |
| 2021 | Breakup announced | 3 new companies |
| 2024 | Breakup complete | GE ceases to exist as unified entity |
Strategic Errors That Sealed Its Fate
- Diversified to Death: GE became so sprawling that no single leadership team could manage it effectively.
- Addicted to Financialization: GE Capital’s profits blinded executives to risk until it was too late.
- Overpaid for Failing Assets: Acquisitions like Alstom and Baker Hughes destroyed billions in shareholder value.
- Ignored Technological Change: In both energy and healthcare, GE lagged in digital transformation and innovation.
- Focused on Optics Over Substance: Stock buybacks and short-term earnings masked deep structural problems.
The Lessons Learned
- Conglomerates need constant reinvention. Big doesn’t mean resilient unless strategy evolves.
- Don’t let financial arms dominate industrial DNA. GE Capital nearly bankrupted the company it was supposed to support.
- Size can hide risk — not eliminate it. The illusion of safety in size often masks systemic fragility.
- Icons fall when leaders chase legacy instead of progress. GE didn’t just fail to see the future — it doubled down on the past.
GE’s fall wasn’t a crash — it was a slow unspooling. An empire built on invention, undone by inertia.
What began with Thomas Edison ended with a breakup. And somewhere in that century-long arc is every modern company’s cautionary tale
