Summary from World Class Business by Philip Mattera:

In 1879 Thomas Edison and his assistant Francis Jehl created the first long-lasting incandescent light bulb. The announcement of the device, which consisted of a carbon filament in a vacuum globe, made the stock market go wild. The shares of gas companies, which had dominated the energy business, plunged as investors flocked to the Edison Electric Light Company, a start-up firm financed by J.P. Morgan and Western Union president Hamilton Twombly.

Edison's vision of electricity transforming commerce and everyday life captured the imagination of the country. And Edison was determined to capture the market, both for light bulbs and for the energy needed to illuminate them. The wizard of Menlo Park set up the Edison Electric Illuminating Company to build the first central-station generating plant. He shrewdly chose as his initial service area a section of downtown Manhattan that included the financial district.

After the Pearl Street station successfully started operation in 1882, competitors rushed into the new business, both to generate electricity and to make light bulbs. Edison's poorly written patent application for the bulb was rejected, and the legal monopoly went to a rival. The rights to a refined version of that bulb were scooped up by an aggressive young inventor and entrepreneur named George Westinghouse, who also began producing generating equipment.

Despite the early setback, Edison's company made money expanding its service and licensing its equipment designs to others. Yet Edison the mechanical genius was less than brilliant as a manager. He missed a number of important opportunities and insisted on using direct current rather than alternating current. The latter, adopted by Westinghouse and other companies, allowed higher voltage power to be transmitted over much longer distances. Edison held to the belief that AC was too dangerous, and as a way of highlighting the point he urged New York State to use a Westinghouse AC generator in building the first electric chair.

The battle between DC and AC was only one of the many differences in standards among the various purveyors of electricity in any given city. The desire to resolve this problem and the quest for economies of scale prompted numerous generating companies to merge with one another. J.P. Morgan, the apostle of corporate consolidation, wanted to extend this to the manufacturing of electrical equipment. He gained control over Edison General Electric (formed in 1889 to consolidate the Edison holdings) and in 1892 combined it with another firm, Massachusetts-based Thomson-Houston, to form General Electric. Edison had no place in either the name of the new firm or its management. He went back to his laboratory, and GE, under the leadership of Charles A. Coffin, went on to become an industrial giant.

One of GE's major businesses was electric railways. Thomson-Houston had brought two such operations into the combined company, and the Edison side had included the Sprague Electric Railway and Motor Co., a pioneer in electric streetcar systems. GE gained a great deal of publicity by providing an elevated electric train line at the Chicago World's Fair in 1893.

Before long GE was dominating virtually all aspects of electrification in the United States--from generating and transmitting power to making the trolleys, motors (including large ones for industry), elevators, fans, and bulbs that used it. Around the turn of the century the company developed high-speed steam turbines, and in 1903 it acquired the Stanley Electric Manufacturing Co., whose founder, William Stanley, invented the transformer.

In 1900 GE established the country's first corporate research facility, which, among other things, improved on Edison's light bulb and devised the tungsten filament still in use today. In 1913 the lab developed the first X-ray tube, thus forming the basis of GE's medical equipment business. Later the research lab began doing early work on plastics as a result of its research on insulation for electric wiring.

Yet the company realized that electricity would have to be employed much more widely if its power generation and equipment operations were going to continue growing. Thus GE began to introduce new electric appliances, beginning with the toaster and iron in 1905. During the 1910s, GE came out with a waffle iron and an experimental household refrigerator. In 1918 the company merged with its two major competitors: Pacific Electric Heating Co., maker of the popular Hotpoint iron, and Hughes Electric Heating Co., which made an electric range. By the 1920s GE was selling an affordable household refrigerator and soon introduced vacuum cleaners, washing machines, and other electric devices for the home.

While GE's appliance business was blossoming, government concern about the company's market dominance was growing. In 1924 GE and Westinghouse were forced out of the power generating business, and a later antitrust action forced GE to make its light bulb patent available to competitors.

Meanwhile, GE was boldly entering new lines of business, most notably the young field of broadcasting. Following the achievement of the first wireless voice transmission in 1906, the radio business was being developed by the Marconi Wireless Co. of America; GE was also working on the technology. In 1919 the federal government was alarmed at the attempt of American Marconi, as the subsidiary of a foreign firm (British Marconi), to purchase certain essential patents owned by GE. As an alternative the Wilson administration worked with GE to create a new company called Radio Corporation of America (RCA), which absorbed the assets of American Marconi.

RCA, essentially a subsidiary of GE with a large minority interest owned by AT&T, was the vehicle by which a small group of companies attempted to dominate the new industry through the pooling of patents--so much so that soon after Westinghouse Electric entered the arena, it was invited to join the combine, as was United Fruit, which made use of radio to communicate with its banana boats going to and from Central America.

Westinghouse went on to create the first commercial broadcasting station in 1920, and soon radio stations were popping up everywhere and people were clamoring for listening devices. Tensions among the partners in RCA over who could do what led to a 1922 agreement that gave the phone company the exclusive right to produce and sell radio transmission equipment, while receiving apparatuses would be manufactured by GE and Westinghouse and marketed by RCA. In 1926 AT&T decided to quit broadcasting in exchange for a monopoly on wire connections between stations. That same year a new entity called National Broadcasting Company (NBC) was formed to operate AT&T's former stations and RCA's outlets. It was agreed that NBC--50 percent owned by RCA, 30 percent by GE and 20 percent by Westinghouse--would pay AT&T generous rates for guaranteed access to land-line connections.

NBC began its network broadcasting with a November 1926 gala production originating at the old Waldorf-Astoria Hotel in New York City and at other sites. By early 1927 NBC had two radio networks: NBC-Red and NBC-Blue. Although a competing operation called the Columbia Broadcasting System (CBS) was formed in 1927, the federal government felt that NBC was too dominant in the industry. In 1930 the Justice Department brought antitrust charges against RCA, GE and Westinghouse.

The industry was stunned but worked out a consent decree they could live with. The final deal was for GE and Westinghouse to give up their ownership interests in RCA. The latter was allowed to keep its radio manufacturing facilities, and GE and Westinghouse would be allowed to compete in that business after a 30-month interval.

GE kept up its stream of new products--including electric dishwashers and fluorescent lighting--during the Depression, but with the onset of the Second World War, the company shifted its focus to military needs. GE produced radar systems and power plants for ships while also building some of the first jet engines for airplanes.

After the war GE resumed production of its consumer goods, but also branched into new areas. Among these were silicone-based sealants and lubricants and, on a much bigger scale, nuclear power. GE produced the first nuclear reactors for submarines and, after the federal government opened up atomic energy to civilian purposes, nuclear reactors for power plants. Although orders slowed down after the last American nuclear facility was licensed in the 1970s, the company continued to manufacture Boiling Water Reactors (BWR) for sale abroad.

During the 1950s the company was a fount of innovations: among them were turbine engines for jet aircraft, gas turbines for electric power generation, synthetic diamonds, and self-cleaning ovens. GE's promoted the slogan "Progress is Our Most Important Product" and sent Ronald Reagan around the country as a good-will ambassador.

Yet the old bugaboo of the company--antitrust--returned to torment it. In 1961 the Justice Department indicted several dozen companies, GE among them, for criminal price fixing in the electrical equipment business. A couple of years before the indictments Senator Estes Kefauver had conducted an investigation that found that GE and its "competitors" were submitting identical bids to major customers like the Tennessee Valley Authority. All of the defendants decided to plead guilty to the charges. GE was fined $437,000 and ended up paying tens of millions of dollars in damages in civil suits brought by customers. Several company executives paid personal fines and received short jail sentences.

In the following years the company went through a massive reorganization, reducing the number of its operating units from some 200 to several dozen. GE also reassessed its position in the computer industry. The company had started making mainframes in 1956 and ended up as one of what were called the seven dwarfs trying to compete with industry giant IBM. In 1970 GE got tired of its losses in the business and sold out to Honeywell. GE later decided it needed a foothold in electronics and purchased semiconductor maker Intersil (though it was sold in 1988). As some of GE's core businesses--especially nuclear reactors--went into a slump in the 1970s, the company made a bold diversification move. It spent more than $2 billion in 1976 to acquire Utah International, a natural resources company involved in oil, uranium, copper, coal, and other minerals.

Utah added substantially to GE's earnings, but the larger company was still in something of a rut when Jack Welch took over as chief executive in 1981. The go-getter Welch set out to do something about that, vowing to retain only those businesses in which GE was number one or two. Over the next decade he sold and bought scores of operations. In the course of this shake-up Welch eliminated some 100,000 jobs, earning him the nickname "Neutron Jack." Among those businesses divested was Utah International, which (except for its Ladd Petroleum unit in the United States) was sold in 1984 to Australia's Broken Hill Proprietary. The houseware division (toasters, irons, etc.) went to Black & Decker. On the acquisition side, Welch made several dramatic moves. In 1985, amid a merger wave in the media, he agreed to spend $6.3 billion to purchase RCA and its subsidiary NBC, one of the big three television networks.

After GE had given up its interest in RCA in the 1930s the company, under the leadership of "General" David Sarnoff, played an important role in the development of television technology and became a leading military and civilian electronics producer, though like GE it abandoned the computer business. In the period before the GE buyout it was suffering from instability in its top ranks. Its NBC subsidiary, which in the 1940s was pressured by the federal government to sell one of its two radio networks (giving rise to the third network, ABC), moved aggressively into television in the 1950s, though it was later overshadowed in that medium by CBS. It was not until the 1980s, when the legendary programmer Grant Tinker took over, that the network was able to rise toward the top in the ratings war.

In addition to taking on RCA, GE got more heavily involved in financial services. The General Electric Credit Corp., founded decades earlier in order to help consumers finance the purchase of GE refrigerators, had come into its own in the 1980s by plunging into areas such as leasing. To this GE first added Employers Reinsurance Corp., bought from Texaco for more than $1 billion in 1984. Two years later GE went Wall Street by purchasing 80 percent of the investment banking firm Kidder, Peabody & Co. for $600 million. During the early 1980s Kidder, founded in the mid-19th Century, was propelled to the top ranks of the mergers & acquisitions game by hot-shot Martin Siegel, yet in the overall securities business it ranked only number 15.

Welch also resumed some of his housecleaning, extending the process of the assets of RCA. In 1987 he sold the combined GE-RCA business in consumer electronics (televisions, VCRs, etc.) to the French firm Thomson SA for cash (somewhere between $500 million and $1 billion) plus that company's medical diagnostic operations, adding to GE's existing strong position in that business. Thomson arranged to go on using the GE brand name.

Since the 1986 GE has had to contend with a boycott of its products launched by the organization INFACT to protest the company's involvement in nuclear weapons production. INFACT later extended its boycott to GE's medical products and succeeded in getting several major institutions to cancel orders for expensive diagnostic equipment.

In 1989 GE added a new dimension to one of its oldest businesses by agreeing to purchase 50 percent (later increased to 75 percent) of the Hungarian lighting company Tungsram for $150 million. Two years later GE took another step in Europe by acquiring the light bulb business of Thorn EMI for $360 million.

While Welch was admired for massively increasing GE's market capitalization (the value of GE’s shares grew from about $12 billion when he took over in 1981 to just under $500 billion twenty years later), he was also criticized for his ruthless management style.

During Welch's tenure, the shape of the corporate conglomerate also changed. By 2001 GE Capital -- a wholly owned subsidiary and financial arm of the company, involved in more than a dozen finance businesses including insurance, commercial lending, real estate, etc. -- was the world’s largest finance operation. GE Capital is the largest owner of aircraft, and manage more credit cards than American Express. GE Capital grew in importance from 8 percent of the company’s total earnings when Welch took over in 1981 to about 50 percent around the time of his retirement. The wider profit margins stimulated the company's shift from manufacturing to finance.

Author Thomas O'Boyle says that "until 1986 GE was the number one patentee of inventions every year in the twentieth century among all U.S. corporations, every year from 1900 to 1986. Now they’re not even in the top 20."