Power Failure: The Rise and Fall of General Electric

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Obviously there’s room for debate. Besides, details matter and Grewal is talking about missed opportunities to develop new stuff while Sonnenfeld may be talking about GE joining existing trends.

Bloomberg used revenue figures for each of the segments and its constituent sub-segments from the most recently available updated filing, unless that number factored in a unit bought or sold after the year in question, in which case the most appropriate filing was used. Segment revenue data became less detailed from 2003-2004 and 2006-2009, but enough historical data was supplied in re-filings or later filings that Bloomberg was able to use the most recent numbers for those years. His 2011 book, Money and Power How Goldman Sachs Came to Rule the World, examines the historical role and influence of Goldman Sachs. Meticulously researched . . . Cohan’s access to the major players bears significant fruit, and the resulting narrative is dramatic without being overblown, making for a gripping account of a corporate behemoth and the men who ran it. Business history buffs, take note.” The executive suite of General Electric’s Connecticut headquarters was known as “carpet land”. Persian rugs and dense wool carpet covered every floor, creating an atmosphere of hushed probity. For almost a century, GE had stamped its curling blue logo on just about everything, from wind turbines to submarine detectors, fridges, televisions, toasters and lightbulbs. The office was a monument to the baronial power of its CEO. Jeff Immelt, the final chief to occupy this floor, enjoyed the use of a shoeshine station, a pantry and dining room. His two assistants also had their own private bathroom. When Immelt travelled by private jet, as he often did, a second, empty jet would often trail behind him in case of mechanical failures on the first plane.In a masterful re-appraisal of a company that once claimed to “bring good things to life,” pre-eminent financial journalist William D. Cohan argues that the incredible story of GE’s rise and fall is not only a paragon, but also a prism through which we can better understand American capitalism. Beginning with its founding, innovations, and exponential growth through acquisitions and mergers, Cohan plumbs the depths of GE’s storied management culture, its pioneering doctrine of shareholder value, and its seemingly hidden blind spots, to reveal that GE wasn’t immune from the hubris and avoidable mistakes suffered by many other corporations. For example, the pace of change at the beginning of the 20th century was much more dramatic than at the end. One of the weaknesses in this very good book is Cohan’s focus on the horse race, important to Wall Street, but somehow America doesn’t appear much in the story. Welch later admitted to other GE executives that the choice was one of his biggest mistakes, according to Fox Business. Industrial, which includes lighting, transportation, rail transportation, consumer appliances, and home and business solutions

One of his most famous talents was to deliver a steady — some would say “managed” — stream of earnings. He gave the illusion that growth was a given even when he himself could see that business was cyclical. It’s true that CEOs need to have buy-in and loyalty from their team. Sitting in the executive chair watching riots break out around the table isn’t exactly good leadership. But Welch was reportedly much better at walking that tightrope of leadership and tolerating dissent than Immelt, and that could be seen in his results and decision-making. I also like the fact that rather than attaching all blames on Immelt, Cohan takes a more nuanced approach and cleverly gotten some knowledgeable inside and outside experts to give their views. I have a pet theory about what’s really wrong with these United States: too many banks. Or, more precisely, too many bankers at too many institutions that aren’t banks but act like banks, abandoning their core missions to concentrate on banking or banking-adjacent activities.American Airlines stinks on ice in part because it isn’t really an airline at all—it is a credit-card company that owns some airplanes. While those planes may fail to take off or land on time 19 times out of 20, you can be sure that 27 times out of 20 the flight crew will turn up the volume on the loudspeakers and try to sell passengers some credit cards. The U.S. government at its worst is indistinguishable from a bank, trying to pilot society by remote control through subsidized credit for everything from college tuition to so-called green energy. GE didn’t get “Great” by being great. In my opinion, it got great by being useful. To a lot of interests.

Although General Electric eventually came to resemble a complicated, symbiotic organism that took on a life of its own, a staggering sci-fi monster of finance, it was not always that way. The company evolved many times over the years as circumstances changed. GE fired a number of its executives after they were indicted on price fixing charges. Cordiner proclaimed his opposition to the corruption, although in Senate testimony he and other top leaders were implicated as knowing about it years before.This exhaustively researched and insightful history of General Electric from Air Mail Writer at Large William D. Cohan puts into enlightening context the company’s groundbreaking rise, its cult of financial leadership and success—once the envy of the world—and its unimaginable fall.”