Boston, 2019
THE LOGO IS one of the most identifiable in the world: a circle, white on a bed of blue, with four subtle, scalloped winglets, suggesting the blades of a midcentury tabletop fan. In the center, in a typeface that has been altered only slightly over the decades, are two entwined cursive letters: GE.
At General Electric, the corporate logo is officially known as the Monogram. The old-timers have a more affectionate name for it. They call it “the meatball.”
For more than a century, the conglomerate has stamped its distinctive logo on a dizzying range of objects that reflect the businesses that it has pioneered, acquired, or briefly dabbled in. The meatball can be found on jet engines, ultrasound scanners, wind turbines, televisions, commercial loan agreements, clock radios, toasters, nuclear reactors, lightbulbs, security systems, tubes of silicone caulk, wing-mounted rotary cannons, locomotives, and washing machines. One estimate pegged the value of the GE brand represented by the Monogram at nearly $30 billion.
Since its founding in 1892, General Electric has been more than a corporation. It has been an American institution. For decades, it was a winning lottery ticket for its hundreds of thousands of employees and a safe bet for shareholders. For its executives, it was an elite business education, and for some a path to enormous riches. GE electrified America, powered its biggest machines, and became integrated into American society as few companies ever did. It was so large that it was given the same brand of financial credit and trust as the US government itself. GE melded Thomas Edison’s workbench with J. P. Morgan’s financial might to create a juggernaut that, in powering the nation’s middle class, its military might, and its explosion of financial wealth, marched in step with the rise of modern America.
GE grew as the nation grew, managed to evolve with the times, and entered the twenty-first century stronger than ever. At its peak in 2000, General Electric was the most valuable company in America, worth almost $600 billion, and had business lines that sprawled across boundaries to touch vast swaths of life in the developed world.
GE’s industrial machinery and consumer goods electrified the power grid and lit American homes and kitchens. Its engines kept aloft American fighter jets, commercial airliners around the planet, and even Air Force One. Its lenders propped up new owners of McDonald’s franchises and leased out railcars carrying oil, grain, and lumber across North America. Its sonograms beamed images to expectant parents, its X-rays revealed broken bones, and its MRI machines scanned organs searching for cancers. Americans dashed to its refrigerators for snacks, then back to their couches to watch episodes of Seinfeld and Friends—also made by GE. General Electric was an industrial company, yet it seemed to sell everything.
Fewer than two decades later, the meatball can still be seen everywhere, but that GE is gone, if not unimaginable.
While still a massive operation with hundreds of facilities, GE’s stock is a mere fraction of its peak value. The company is no longer a media darling or an analyst favorite, its shares are no longer counted in the Dow Jones Industrial Average, and the once-generous dividend is virtually gone. A share of GE stock was once an essential component of the beginner investor’s portfolio, but is now perceived as a speculative bet; a generation ago, such a view would have bordered on market heresy.
GE’s fall was fast when measured in dollars and cents and people employed. Pensioners and retirees watched money evaporate at a time in their lives when they had no way of replacing it. Thousands of employees lost their jobs, and those who remained were left with an uncertain future. Many who weren’t laid off at first found themselves working outside the very company they had always known after GE sold off pieces of its storied history in exchange for the cash it needed just to keep itself afloat. The end of GE as we knew it, however, was set in motion long before the cards finally fell.
In one important respect, GE’s demise is more profound than can be conveyed by numbers on a stock ticker or even the deeply felt pain and disappointment of individual workers and executives and their families. The collapse of a company that taught generations of American businesses what it meant to manage well raises a major question, one that is still unresolved. Just how much of the success of the many other companies that have chased and emulated GE was real? How much was a product of their imagination—and perhaps of our own?
In company lore, indestructible General Electric carries the torch of Thomas Edison, the legendarily prolific inventor. It is a connection that instantly validates the company’s place in America’s proud history of lucrative ingenuity. It is also, as it happens, a beneficial association for a company that sells lightbulbs.
But GE’s birth, like its life, was more about money than about invention. Edison had very little to do with GE, which was the result of financial titans rolling up multiple early players in the electrical industry, as the technology’s development required grand scale and, more importantly, mountains of capital.
The father of the General Electric Company proper was not Thomas Edison but J. P. Morgan, who arranged the merger of dueling rivals for just this reason. The lagging financial condition of Edison’s old companies had left the great inventor with no choice but to see his former firms acquired in the deal, and with no role for himself except as a figurehead on the first GE board of directors—and a useful avatar for company public relations. But he would serve only briefly on the company’s board. Edison sold his last GE shares within years of the company’s formation, missing out on its meteoric growth, to finance failed mining experiments.
Besides frequent appearances in its marketing, the inventor’s legacy nevertheless survived in GE research culture, which institutionalized problem-solving and made invention a team pursuit. Edison’s personal presence was not nearly as critical as the inspiration he represented, which was a hugely important factor in the company’s success and its broader renown. From GE’s labs flowed decades of pathbreaking research, patents, and Nobel Prizes. From its example flowed a broader heyday of private-sector research and development in the United States as other companies sought to match the success that GE had found in funding laboratories, paying scientists, and parlaying the fruits of their research into marketable goods and machines.
The company also taught its peers about the power of public relations, influence-peddling, and mythmaking. The archly rendered city of Ilium in the novels and stories of Kurt Vonnegut was a stand-in for real-life Schenectady, New York, the incorporated home of GE, which Vonnegut knew, perhaps too well, from his days spent writing copy for internal corporate communications. Vonnegut’s brother was a GE scientist in Schenectady who successfully worked on developing methods to induce clouds to begin raining. Thwarted on antitrust grounds from participating in the dawn of the great American radio networks, GE nonetheless found its way into pop culture as a sponsor of live television in TV’s golden age. It hired celebrity pitchmen—in particular, a film actor whose career was on the wane named Ronald Reagan—to entice consumers to buy its home goods and fire up workers with enthusiasm about the world-changing innovations being driven by GE’s work. It’s a truism of modern-day Silicon Valley that every startup promises that its business aims to change the world; GE beat them all to that line by at least three-quarters of a century.
GE also led its peers into a harsher and more successful battle against organized labor and in defense of the preeminence of investors, whose demand, foremost among all other concerns, was the protection of the company share price and the dividend. It was GE’s vice president of labor and community relations, Lemuel Boulware, who instituted the company’s aggressive posture in negotiations with its blue-collar manufacturing workforce. The company’s first offer was its offer, take it or leave it. Such intransigence was so associated with GE that it became known as “Boulwarism.” And Boulware’s tutelage is widely credited, among those who knew him, with engineering the transformation of the company pitchman, Reagan, from a run-of-the-mill Hollywood back-lot Democrat into the first nationally electable politician of the American right. GE remembers, with pride, its role in creating Reagan.
The company surfed the fads of the American twentieth century, including the rise of the essential postwar form of American capitalism, the industrial conglomerate. The tentacles of the GE conglomerate branched into a seemingly unlimited number of areas of commerce, investment, communications, and influence. Investing in a share of GE was an obvious smart move to the mom-and-pop investors of twentieth-century America. The company was as trusted as a government bond, tied to a proud national inheritance of innovation, and paid a reliable dividend that had been cut only once, in the Great Depression. Indeed, the company was a sort of proxy for the American economy as a whole because, in addition to hiring brilliant engineers and managers, it employed hundreds of thousands of skilled tradesmen. If one sector stumbled, another industrial segment of GE could sustain the larger body of the company. It was conservative. It unapologetically made money. Its collapse was unimaginable.
To many investors, GE was just the right amount of boring: dependable as a utility, unlikely to skyrocket in price, and predictable.
The first signs of trouble were barely visible during the period of General Electric’s greatest, wildest success, under the leadership of the man widely seen then as the greatest business executive of his generation. He was a tough Irishman from Massachusetts. His name was Jack Welch.