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What Happened to GE? (2021)

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Re: What Happened to GE? (2021)

#101

Post by swells34 »

wespiser_2018 wrote: post #19

I'd like to think karma. Nothing with spoil your perception of a company faster than a toxic waste dump of GE manufactured PCBs in your hometown. I'll never be able to understand the "Genius of Jack Welsh", but I don't suppose I'm really missing that much :)

Oh, the Genius of Jack Welch is simple. Lie to investors while dismantling the company you're in charge of. Use the profits from selling off the dismantled bits to cook the books so it looks like you're becoming more profitable, this will get you lots of bonuses and you'll become super rich, then just walk away before anyone figures out your bullshit. Sure you've destroyed hundreds of thousands of jobs, and ruined one of the most profitable companies in the world, but you're rich now, so fuck it. Pure genius.

Re: What Happened to GE? (2021)

#102

Post by farhanhubble »

neilv wrote: post #69

After suffering through a new (lemon) GE-branded fridge, I don't see myself ever buying a GE-branded thing again. Fool me once. I have some hope that Samsung will learn from GE, and decide not to fully discard its more recent-era reputation for quality and excellence.

I worked at Samsung for seven years. The culture at Samsung (mobile software division) was exactly as bad as GE. They had thousands of "engineers" fixing the same bugs over and over while the R&D was busy pushing absolute horseshit Powerpoints. I've owned Samsung ACs, TVs, phones, washers and dishwashers and most of them went kaput a year or two after installation.

Re: What Happened to GE? (2021)

#103

Post by farhanhubble »

swells34 wrote: post #101
wespiser_2018 wrote: post #19

I'd like to think karma. Nothing with spoil your perception of a company faster than a toxic waste dump of GE manufactured PCBs in your hometown. I'll never be able to understand the "Genius of Jack Welsh", but I don't suppose I'm really missing that much :)

Oh, the Genius of Jack Welch is simple. Lie to investors while dismantling the company you're in charge of. Use the profits from selling off the dismantled bits to cook the books so it looks like you're becoming more profitable, this will get you lots of bonuses and you'll become super rich, then just walk away before anyone figures out your bullshit. Sure you've destroyed hundreds of thousands of jobs, and ruined on…

Since Welch climbed the corporate ladder over the years, this says a lot about the rot predating him as well.

Re: What Happened to GE? (2021)

#104

Post by w10-1 »

If this is really Bill Gates talking about Jack Welch, we're in real trouble.

It's simplistic to think there was a single cause of failure. Sure, toadyism might delay bad news, but how exactly did they lose their market and product advantages in each of their businesses?

Partly I think it's just too easy to steal expertise once it can be packaged and processed, whether business or engineering or manufacturing. A lot of very expensive value probably just walked out the door. I suspect that has been the business strategy for most of the up-and-coming engineering and product companies today. I wonder if there's some way to quantify that hypothesis?

Re: What Happened to GE? (2021)

#105

Post by SOVIETIC-BOSS88 »

simula67 wrote: post #97
rgmerk wrote: post #79

Earlier quoted context omitted.

Aren’t the Japanese conglomerates perpetually underperforming businesses that get away with it because Japanese shareholders are toothless?

Berkshire Hathway is also a conglomerate, but it does perform fairly well.

BH is extremely delegated. Bufett is not in the business of managimg Fruit of the Loom for example.

Re: What Happened to GE? (2021)

#106

Post by piva00 »

hakfoo wrote: post #75
roenxi wrote: post #26

Earlier quoted context omitted.

Wasn't Welch the one who was using "sack 10% of the managers each year" as a strategy? That one was obviously long-term stupid; I can see it being healthy for maybe a cycle or 2, but after that it would just kill off all the intangibles of management. At some level, every company relies on a culture of people doing the right thing to thrive over the long term. Although I do think that it is a mistake to just pin blam…

The reason US manufacturing excellence doesn't make sense is because we let it rot. We don't have cities like Shenzhen, where everything you need to get a product to market is within same-day courier range. I understand this was a feature of the old "hardware-centric" Silicon Valley, and it made fast iterations on new products a lot more viable. I wonder if we could even build a hub like that today, with property spe…

The US seems to have transitioned to a fully financial economy. Nixon and Reagan left to you a legacy that eventually will be America's downfall, just look how the Southern Strategy has eroded USA's democracy, Reagan's economic policies propping up the whole finance sector.

Nothing else matters more than finance, and it's shareholder value above everything else (consumer value, employees' well being, return to society be damned) is the ideology Welch instilled in generations of MBAs that went to control most corporations.

When everything is judged on a single metric it ends up eaten by Goodhart's Law, the corporate game is to manipulate the books well enough to increase share value, the finance market does not care if layoffs will impact the company's competitiveness in 5-10 years, the finance market does not care if the company is eroding their customers trust (e.g.: Google killing off products willy-nilly), if the books look good and costs are down while revenue is up then share price go up.

It will crumble, it's not sustainable, the main issue is when will it crumble and how destructive it will be for normal people.

Re: What Happened to GE? (2021)

#107

Post by lostlogin »

skywal_l wrote: post #92

An interesting datapoint: comparison between GE HealthCare and its competitor [0]. To sum it up, here are the propotion of revenues reinvested in R&D: Philips: 12% Siemens: 8% GE: 5% [0]: https://www.linkedin.com/posts/rezazahiri_revenue-valuation-...

> R&D: Philips: 12% Siemens: 8% GE: 5%

Having used equipment from all 3, it feels like Siemens 50%, Philips 5% and GE stole some shit and glued it together as a joke someone paid them to perform.

I use MRI scanners and a huge part of my experience could be a local issue with service and application support.

Re: What Happened to GE? (2021)

#108

Post by rTX5CMRXIfFG »

simula67 wrote: post #97
rgmerk wrote: post #79

Earlier quoted context omitted.

Aren’t the Japanese conglomerates perpetually underperforming businesses that get away with it because Japanese shareholders are toothless?

Berkshire Hathway is also a conglomerate, but it does perform fairly well.

But it is a holdings company, and their business model is to make returns on equity (and possibly loaning out capital to their subsidiaries) instead of directly managing their subsidiaries' operations and generating revenue.

Re: What Happened to GE? (2021)

#109

Post by concordDance »

piva00 wrote: post #106
hakfoo wrote: post #75

Earlier quoted context omitted.

The reason US manufacturing excellence doesn't make sense is because we let it rot. We don't have cities like Shenzhen, where everything you need to get a product to market is within same-day courier range. I understand this was a feature of the old "hardware-centric" Silicon Valley, and it made fast iterations on new products a lot more viable. I wonder if we could even build a hub like that today, with property spe…

The US seems to have transitioned to a fully financial economy. Nixon and Reagan left to you a legacy that eventually will be America's downfall, just look how the Southern Strategy has eroded USA's democracy, Reagan's economic policies propping up the whole finance sector. Nothing else matters more than finance, and it's shareholder value above everything else (consumer value, employees' well being, return to societ…

> the finance market does not care if layoffs will impact the company's competitiveness in 5-10 years

This doesn't make sense to me. Are there no 5-10 year derivatives?

Re: What Happened to GE? (2021)

#110

Post by piva00 »

concordDance wrote: post #109
piva00 wrote: post #106

Earlier quoted context omitted.

The US seems to have transitioned to a fully financial economy. Nixon and Reagan left to you a legacy that eventually will be America's downfall, just look how the Southern Strategy has eroded USA's democracy, Reagan's economic policies propping up the whole finance sector. Nothing else matters more than finance, and it's shareholder value above everything else (consumer value, employees' well being, return to societ…

> the finance market does not care if layoffs will impact the company's competitiveness in 5-10 years This doesn't make sense to me. Are there no 5-10 year derivatives?

Aren't all of them quantitative instead of qualitative? Every trader I know in Big Finance is basically creating/using statistical models based on books' numbers vs other books, not analysing a company's products and labour potential on a human level.
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