Former GE CEO Jeff Immelt: 'The GE story is a complicated story'

·3 min read

As the former CEO of General Electric (GE), Jeff Immelt had a front row seat to the rapid decline of one of America's iconic corporate giants. 

Immelt, who has written a new book about his years at the company, shared how that process unfolded and defended his tenure during the tumultuous period at GE.

"I wrote the book really for two reasons. One is that the GE story is a complicated story," Immelt, author of "Hot Seat: What I Learned Leading a Great American Company," told Yahoo Finance's Julie Hyman at the All Markets Summit conference on Monday. "And I think when you have a complicated story, you have to tell it fully and completely. And I didn't feel like that was happening in the context of GE."

Under Immelt's leadership — from September 7, 2001 to July 31, 2017 — the company's stock dropped precipitously. In his view, there was one key problem for GE. 

"We won in our markets. We experienced globalization and digitization, but the market cap didn't grow," Immelt explained. "And all of us carry that as a burden as we go forward."

The 'mythic' rise and fall of GE

GE was born out of a merger between Thomas Edison’s Edison Electric Company and the Thomson-Houston Electric Company in 1892, which was arranged by financier J.P. Morgan

For the next century, the company grew along with the economy.

At its zenith, the company was a sprawling global empire. In 2000, GE was generating almost $130 billion in revenue. At that point, the global giant was a lender, an appliance maker, a media giant (with NBCUniversal), and a health care business.

But GE's path took a sharp U-turn soon after, just as Immelt took over in 2001.

The company faced a multitude of problems, from accounting mishaps to acquisitions that did not pay off to external shocks like the September 11 attacks and the Global Financial Crisis. 

General Electric Co Chief Executive Jeff Immelt listens during a news conference to discuss the company's plan to move its headquarters to the city of Boston in Boston, Massachusetts, April 4, 2016. REUTERS/Brian Snyder
General Electric Co Chief Executive Jeff Immelt listens during a news conference to discuss the company's plan to move its headquarters to the city of Boston in Boston, Massachusetts, April 4, 2016. REUTERS/Brian Snyder

The 2008 financial crisis hit GE particularly hard — particularly its financial services division, GE Capital, which was hammered with losses.

The entire fiasco continued for over a decade resulting not only in Immelt stepping down in 2017, but also in the company getting kicked off the Dow Jones Industrial Average (DJI) in 2018. (GE was a founding member of the Dow in 1896.) More recently, GE has been selling itself part by part. 

Immelt said his new book revealed what went behind the scenes during those many years in the red.

"I wanted to tell the story, a complicated story, more completely," he said. "I also think in this generation, all leadership is crisis leadership. And from 9/11 through the financial crisis and COVID and Fukushima, my team and I experienced lots of volatility. And I thought some of the storytelling and some of the lessons would be valuable to other leaders."

General Electric CEO Larry Culp smiles before a crowd
General Electric CEO Larry Culp smiles as GE unveils the world's largest offshore wind turbine blade at a wind testing facility in the Charlestown neighborhood of Boston on Nov. 5, 2019. (Photo by John Tlumacki/The Boston Globe via Getty Images)

The company's since hired Larry Culp to turn the company around. And whatever comes next, GE's wild ride serves as a cautionary tale for many investors and business leaders.

"GE is a mythic corporation. It was at one time the largest, most powerful company in the world," Microsoft Co-Founder Bill Gates wrote in a blog post in June 2021. "It turns out that the word 'mythic' is the perfect word for GE. The corporation has come crashing to Earth in one of the greatest downfalls in business history."

Gates added that GE is "a textbook case of mismanagement of an overly complex business."

 Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting