3. General Electric History
● In the Dow from 1907-2018 continuously
● Periodically largest company in the world 2000 - 2005 and much of the 90s
● Stock down around 78% since the recession and 70% since April 2016
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4. GE Capital- Before 2008
● Financial Arm of GE at its peak it was 60% percent of profits
● Around the size of Morgan Stanley or the 7th largest bank in the US with $864
billion in assets ($637 billion in GE Capital)
● Provided business loans, retail loans, insurance, and credit cards
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5. The Customers
● At its height it served practically anyone who wanted a loan
● Today it is much more focused in providing financing to customers for its
aviation and energy businesses
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6. Why it was big
● GE capital had a cost of capital of 7.3%
● Morgan Stanley: 10.6%, Citigroup: 8.4%, Berkshire Hathaway: 8%
● GE was cheap because they were not regulated and were a lot more leveraged
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7. How it came apart … The Recession
● Required huge bail out: $139 billion and $12 billion
● 2013: Deemed systemically important financial institution and regulated like a
bank
● 2015: No longer that profitably and GE decided to break it up
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8. GE Power
● Sells turbines and equipment to power plants
● Main Competitors are Mitsubishi and Siemens
● GE’s power plants generate one-third of the world’s electricity
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9. Betting big on fossils
● 2007-2014 $14 billion in oil and gas companies.
● 2014 $10.3 billion purchase of French group Alstom’s power business
● Goal to make Alstom have profit margins similar to GE
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10. Further Fallout
● Oil and Gas profits fell 92% percent and spun-off
● May 2017: Outlook positive. Profits down 97%
● Declared $22 billion loss
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