General Electric (GE), once a symbol of America’s industrial might, is now in dire straits, its value having plummeted by over $100bn in a year. The company’s decline has been attributed to a range of factors, including a culture of complacency, a lack of innovation, and a failure to respond to changing market conditions.
Under former CEO, Jeffrey Immelt, GE diversified into too many areas, such as media and finance, thereby losing focus on its core industrial businesses. Immelt’s successor, John Flannery, has been tasked with the unenviable job of turning the company around. He has already cut dividends by half, the second such cut since the Great Depression, and is selling parts of the business to raise cash.
GE’s problems are compounded by a federal probe into its accounting practices and a potential shortfall in its insurance reserves. Despite these challenges, Flannery remains optimistic about GE’s future, believing that the company can regain its former glory by returning to its industrial roots.
Go to source article: https://www.bloomberg.com/news/features/2018-02-01/how-ge-went-from-american-icon-to-astonishing-mess