Thomas Edison, one of the world’s most acclaimed inventors, brought to life the world’s first commercially practical light bulb. Innovation and technologies were the primary drives in his life and by the time of his death he had hundreds of patents under his name. Edison was not only a scientist at heart but also a successful business man. In his lifetime, he founded several companies and yet only one achieved world renowned status. He was one of the founders of General Electric Corporation (GE).
Edison’s love for innovation allowed GE to be viewed as a company that pioneered research, development and technological evolution. Consumers soon came to count on GE for its productive and durable products that worked to simplify everyday life. This evolution happened during Edison’s lifetime, but now Edison has long been gone and times have changed.
GE eventually created a unit called GE Capital. It is the financial services unit of General Electric and provides up to 37% of GE’s revenue. It had become GE’s bread and butter. It was a feasible and profitable unit for GE until the mortgage crisis came about. GE held so many residential and commercial mortgages, as well as loans given to consumers, that the conglomerate almost collapsed during the crisis. Its investor ran for the hills and left the company in the dust, and its shares are currently trading for less than a share of JPMorgan Chase (JPM) or Bank of America (BAC).
The company has since then recognized that its salvation lies on its reinvention. GE will no longer rely on its financial unit for the majority of its profits. The company is scaling back the unit so that it will now only provide less than 30% of its revenue. The company is also going back to its roots and doing what it does best: creating and providing innovative products.
GE is investing more money in its medical division and lowering the prices for it medical technology. This is part of its plan to increase its presence in the healthcare IT sector over the next couple of years. The company has also announced that it is building a new research center in Michigan. It will be called “The Advanced Manufacturing and Software Technology Center” and will create 1,100 new jobs. Here, researchers will work to create new technologies in the Energy sector, IT sector, as well new gas turbines, and engines.
There is much more work to be done within the company in order to turn it around, but the initiative has been set and has begun. It would be a disservice to Thomas Edison and the GE brand if the company were to neglect the severe trouble it has found itself in. Edison was an innovator first and a business man second. Wealth was just a byproduct of his incredible inventions; it was never his goal. GE was founded to enrich and simplify consumer’s everyday lives. Great Products were first, profits second. It’s the reason the company became one of the world’s largest brands.
GE was founded on Thomas Edison’s passion: “We bring good things to life”.