GE was the biggest company in the world. What happened?
Listen to the story (Filipino accent)
General Electric (GE), once a giant company that did almost everything for American families, is no longer the same.
It used to make TV shows, light bulbs, appliances, and even provided electricity and home loans. But recently, the remaining businesses of GE split into two companies.
Thomas Edison founded GE in 1892. It grew to be the world’s biggest company under CEO Jack Welch. But in the 2000s, it had too much debt.
Instead of fixing its problems, GE spent a lot of money trying to keep its stock price high. This didn’t work. In 2018, GE was removed from the Dow Jones Industrial Average, a list of America’s most important companies.
In 2018, Larry Culp became the CEO of GE. He started selling off parts of the company to reduce its debt. GE had already sold its share of NBC in 2013 and its appliance business to China’s Haier in 2016. Under Culp, GE sold more parts of the company, including its light bulb business in 2020.
GE also sold its aircraft leasing business and finance unit, GE Capital. This unit caused GE to lose its top credit rating in 2009 during the Great Recession.
In November 2021, GE announced it would split into three companies: GE Healthcare, GE Aerospace, and GE Vernova. GE Healthcare became a separate company last year. GE Aerospace and GE Vernova completed their split on April 2.
Thanks to Culp’s actions, GE’s stock price, which had fallen a lot in 2017 and 2018, nearly doubled in 2023 and rose another 37% this year. Culp will remain CEO of GE Aerospace.
Vocabulary35 words
- Once
- at a specific moment; when; at a time in the past
- Giant
- very large; huge; massive
- No longer
- in the past but not now; stopped; not anymore
- Light bulb
- A thing that gives light when it’s turned on; ?
- Appliance
- a machine like toaster, oven, microwave, washing machine, dishwasher, etc
- Even
- also; used to show that something is surprising, unusual, unexpected, or extreme
- Provide
- to give or supply something that is needed or requested
- Electricity
- power; current; energy used to operate lights, TVs, etc.; ⚡?
- Loan
- Money that is borrowed from someone or a bank and needs to be paid back with interest
- Remain
- To stay the same; to continue; to “keep”;
- Split
- to divide into two or more parts; break something into several parts
- Found
- To start or create something like a company or organization
- CEO (Chief Executive officer)
- the top person in a large company; president; boss
- Debt
- Money that you owe to someone; money that you have to pay back
- Instead of
- rather than; in place of; “not that, but something else”; substitute; alternative
- Stock
- the money a company has from selling shares (parts of the company) on the stock market
- Remove
- to take out; to take away from; take off;
- List
- A collection of things written down; A group of items written down
- Sell off
- To get rid of something by selling it; Sell something that you don’t want anymore
- Part
- a piece of something; a section of a whole thing; not the whole thing
- Reduce
- to make less; make smaller; decrease; bring down; shrink
- Share
- portion; part; stake; a part of something that has been divided between several people
- Under
- controlled, managed, or governed by; during the rule of; while someone is in control/power
- Including
- together with; as well as; part of a group or many; plus
- Aircraft
- airplane
- Lease
- To rent something for a long time; Pay to use something for a certain amount of time
- Finance
- The management of money;
- Unit
- A single thing that is part of a larger group;
- Cause
- make something (usually bad) happen; create
- Credit rating
- A score that shows how likely you are to pay back money; A score that shows how good you are at paying back money you borrow
- Announce
- share information openly; to tell the public; to make a statement; to report
- Thanks to
- because of; due to; as a result of
- Fall
- To go down; to decrease
- Double
- two times more; 2x; 100% more
- Rise
- to increase; to go up
Quiz
Answer key
1. Make appliances 2. Thomas Edison 3. False
Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
General Electric (GE), _____ a giant company that did almost everything for American _____, is no longer the same.
It used to make TV _____, light bulbs, appliances, and even provided electricity and _____ loans. But recently, the remaining _____ of GE split into two companies.
Thomas Edison _____ GE in 1892. It grew to be the world’s biggest company under _____ Jack Welch. But in the 2000s, it had too much _____.
Instead of fixing its problems, GE _____ a lot of money trying to keep its stock price high. This didn’t _____. In 2018, GE was removed from the Dow Jones Industrial Average, a _____ of America’s most important companies.
In _____, Larry Culp became the CEO of GE. He started _____ off parts of the company to reduce its debt. GE had _____ sold its share of NBC in 2013 and its appliance business to _____’s Haier in 2016. Under Culp, GE sold more parts of the company, _____ its light bulb business in 2020.
GE also sold its _____ leasing business and finance unit, GE Capital. _____ unit caused GE to lose its top credit rating in _____ during the Great Recession.
In November 2021, GE announced it _____ split into three companies: GE Healthcare, GE Aerospace, and GE Vernova. GE Healthcare _____ a separate company last year. GE Aerospace and GE Vernova completed their split on April _____.
Thanks to Culp’s actions, GE’s stock _____, which had fallen a lot in 2017 and 2018, nearly doubled in _____ and rose another 37% this year. Culp will _____ CEO of GE Aerospace.
Discussion questions
- Why do you think GE decided to sell off parts of its company?
- How do you think the removal of GE from the Dow Jones Industrial Average affected the company’s image?
- Do you think GE’s recent stock price increase is a good sign for the company’s future? Why or why not?
- Do you think big companies like GE should offer a wide range of products and services, or should they specialize in a few areas? Why?
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