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FC/OT: General Electric no longer a member of the Dow Jones Industrial Average

BobPSU92

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May 6, 2015
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See the link below. From the article:

"For the first time in 110 years, General Electric will not be a member of the elite Dow Jones Industrial Average.

S&P Dow Jones Indices announced on Tuesday that the iconic maker of light bulbs and jet engines will be replaced in the 30-stock index by Walgreens Boots Alliance.

GE (GE) was an original member of the Dow in 1896 and has been in it continuously since November 7, 1907.

Being ousted from the Dow is the latest indignity for GE, which is dealing with a serious cash crisis caused by years of bad deals. GE has replaced its CEO, slashed thousands of jobs and cut its coveted stock dividend in half.

Last year, GE was the worst-performing stock in the Dow, losing almost half of its value. GE is down by another 25% this year."


http://money.cnn.com/2018/06/19/investing/ge-dow-jones-walgreens/index.html

This is not Jack Welch's GE.
 
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It's amazing, sad, and pathetic to see what has become of GE.

On a brighter note, I saw Ford purchased and will transform iconic (and currently dilapidated) Michigan Station as part of a mixed use, downtown development in West Detroit. Well done guys!

---

Trying to sum up the significance of Ford’s plans for the Michigan Central Station, a quote by Winston Churchill seems apt.

“Now, this is not the end,” Churchill said of an early Allied victory in World War II. “It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

That’s what Ford taking on the old train station means for Detroit. Years of hard work lie ahead for the city to truly come back. But Ford’s act of faith in Detroit’s future with the enormous investment it will bring signals a new era.

Victory no longer seems so remote. The issue is no longer in doubt.

Let’s take a moment to be clear about what Ford’s historic move won’t do. It doesn’t, by itself, solve Detroit’s underlying challenges of race and poverty. It will not, by itself, do anything for still-lagging neighborhoods far from Corktown. Indeed, the prosperity heading Corktown’s way seems probable, at least for a time, to exacerbate complaints of gentrification in the city.


636646139987333885-depot-031504-viewwest-kk.JPG


Buy Photo
Michigan Central Station in March 2004. (Photo: J. Kyle Keener, Detroit Free Press)

But even admitting all that, Ford’s purchase of the train station shines as a turnaround of miraculous dimensions. There’s no other way to say it: This Ford deal for the train station is the Big One. The one event in the city's comeback story that outranks all that has gone before.

636646030270280059-061318-michigan-centra-44-.JPG
 
I know squat about Michigan short of its hideous fb fans (with some exceptions @Anison) and generalized collapse of its economy.

I do recall reading in a hunting mag some years ago about a whole section of old Detroit that was abandoned and grown up in goldenrod. There were so many pheasants that a guy leased some land and was training champion retrievers there. Pictures showed him working the dogs, flushing pheasants with huge city buildings in the background.
 
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Dem, remember the days when pheasant hunting was big in PA? Even in Western PA. I have fond memories of pheasant hunting with my father in those days. Developments and the loss of small farms changed all that, I guess.
They used to stock em where i lived in Warren County. Seems hard to believe. God, we had fun. Used to hunt before school.
 
They used to stock em where i lived in Warren County. Seems hard to believe. God, we had fun. Used to hunt before school.
Stocked them where I grew up in Wash Co. also. The stocked birds simply outran you. The native ones (which were rare) would fly if you stood motionless near their “nest” long enough.

The grouse would also fly if you waited them out, but, they would scare the crap out of you with the noise when they “skidaddled” and it was very hard to then get a clean shot on them.
 
Stocked them where I grew up in Wash Co. also. The stocked birds simply outran you. The native ones (which were rare) would fly if you stood motionless near their “nest” long enough.

The grouse would also fly if you waited them out, but, they would scare the crap out of you with the noise when they “skidaddled” and it was very hard to then get a clean shot on them.
We had an English setter/springer spaniel cross named Toby. They did not outrun him. Sometimes you had to sprint to keep up with him, but if you could hit em, he would fetch em.
 
We had an English setter/springer spaniel cross named Toby. They did not outrun him. Sometimes you had to sprint to keep up with him, but if you could hit em, he would fetch em.
Awesome! When I was lucky enough to hunt with a friend with a good bird dog, I felt lucky and most always came home with game. I also had friends with “so-so” dogs. I would rather go on my own than with those dogs. It is easy to understand the attachment between a good dog and his human friend.
 
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Stocked them where I grew up in Wash Co. also. The stocked birds simply outran you. The native ones (which were rare) would fly if you stood motionless near their “nest” long enough.

The grouse would also fly if you waited them out, but, they would scare the crap out of you with the noise when they “skidaddled” and it was very hard to then get a clean shot on them.
I wasn't a very good hunter, but still proud of actually getting a grouse when I was 15 years old. And yes, the sound could startle the heck out of you. Great memories, guys. Guess we sort of hijacked this thread!
 
I am involved with a number of redevelopment projects in urban area in NJ.

There are a lot of thoughts on the politics involved and every stakeholder group has its say. But leaving the blighted areas as they are serves no purpose for anyone.

I commend FoMoCo for taking this step for Detroit. Hopefully more to follow.
 
I lived through three rebuilds or Youngstown and three of Toledo. Somebody with great intentions decides to drop millions on revitalizing downtown. The problem is that the same old problems lead to the same old results. In another 20 years, someone will lead the charge to do it again.

I spent a ton of time in downtown Detroit. I learned my wife was pregnant at a pay phone in a hotel across from GM's WHQ. I admire what these people are trying to do but if they don't fix the underlying problems of Detroit, it will be for not.

Wasn't there a great quote about two world leaders talking about the best generals. And the foreign would leader said the best generals were general motors, general electric and one other...can't remember the third. I guess in the case of Electric and Motors, that is no longer true.
 
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I lived through three rebuilds or Youngstown and three of Toledo. Somebody with great intentions decides to drop millions on revitalizing downtown. The problem is that the same old problems lead to the same old results. In another 20 years, someone will lead the charge to do it again.

I spent a ton of time in downtown Detroit. I learned my wife was pregnant at a pay phone in a hotel across from GM's WHQ. I admire what these people are trying to do but if they don't fix the underlying problems of Detroit, it will be for not.

Wasn't there a great quote about two world leaders talking about the best generals. And the foreign would leader said the best generals were general motors, general electric and one other...can't remember the third. I guess in the case of Electric and Motors, that is no longer true.

There are things that money cannot fix. I agree. And there is no guarantee that these places become Main Street USA in Disney World. But, I stand by my statement that ignoring these areas does no one any good.
 
I lived through three rebuilds or Youngstown and three of Toledo. Somebody with great intentions decides to drop millions on revitalizing downtown. The problem is that the same old problems lead to the same old results. In another 20 years, someone will lead the charge to do it again.

I spent a ton of time in downtown Detroit. I learned my wife was pregnant at a pay phone in a hotel across from GM's WHQ. I admire what these people are trying to do but if they don't fix the underlying problems of Detroit, it will be for not.

Wasn't there a great quote about two world leaders talking about the best generals. And the foreign would leader said the best generals were general motors, general electric and one other...can't remember the third. I guess in the case of Electric and Motors, that is no longer true.

The thing is, people want to live in cities now rather than suburbs, so the demand will be there if they build it right.

I also saw Asbury Park go through two rebuilds but the last one stuck. Asbury is thriving now. Streets that were abandoned for 30 years are now lined with shops.

It is hard work but you can turn the corner. Detroit would be the hardest work of them all.

Similarly Newark NJ is doing the same. So far it seems with mixed results.
 
The thing is, people want to live in cities now rather than suburbs, so the demand will be there if they build it right.

I also saw Asbury Park go through two rebuilds but the last one stuck. Asbury is thriving now. Streets that were abandoned for 30 years are now lined with shops.

It is hard work but you can turn the corner. Detroit would be the hardest work of them all.

Similarly Newark NJ is doing the same. So far it seems with mixed results.
Agree that places like Detroit and North Jersey are different than Youngstown. The jobs, schools, and security need to be in place first. Catch 22.
 
Actually Jack Welch (and the Harvard Business School) deserve most of the blame for wrecking GE. He was the leader of a class of CEOs who focused only on margins and short-term returns and thought engineering and manufacturing were passe.

Instead of growing businesses, Welch and his successor Jeffrey Immeldt spent 25 years squeezing all their businesses for short term profit (or selling them off when they didn't deliver the 25% margins they wanted) and investing the money in Wall Street schemes that performed great on quarterly reports but long-term were risky and became disastrous when the recession hit. GE lost $4 or $5 billion on subprime lending alone. Their total loss on financial services (GE Capital) is over $20 billion and counting.

Meanwhile, starved for capital, GE's remaining manufacturing businesses lost ground. GE laid off North American employees (including design and engineering) and outsourced everything to the Third World. Which made tons of money short-term but long-term the GE brand came to mean very little. In category after category, there's no reason to buy a GE product because it is just their brand slapped on the same Chinese technology that you can usually buy cheaper under another brand.

Now the tables have turned, manufacturing is cool again in CEO circles. GE and Ford kept making cars, Boeing kept making planes and -- lo and behold -- they are making tons of money today. But so much of GE's portfolio of great manufacturing businesses that Jack Welch inherited -- those businesses are gone.

Still, it's a shock to see that GE has lost HALF of its value in the last year. That is a meteoric fall.
 
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Actually Jack Welch (and the Harvard Business School) deserve most of the blame for wrecking GE. He was the leader of a class of CEOs who focused only on margins and short-term returns and thought engineering and manufacturing were passe.

Instead of growing businesses, Welch and his successor Jeffrey Immeldt spent 25 years squeezing all their businesses for short term profit (or selling them off when they didn't deliver the 25% margins they wanted) and investing the money in Wall Street schemes that performed great on quarterly reports but long-term were risky and became disastrous when the recession hit. GE lost $4 or $5 billion on subprime lending alone.

Meanwhile, starved for capital, GE's remaining manufacturing businesses lost ground. GE laid off North American employees (including design and engineering) and outsourced everything to the Third World. Which made tons of money short-term but long-term the GE brand came to mean very little. In category after category, there's no reason to buy a GE product because it is just their brand slapped on the same Chinese technology that you can usually buy cheaper under another brand.

Now the tables have turned, manufacturing is cool again in CEO circles. GE and Ford kept making cars, Boeing kept making planes and -- lo and behold -- they are making tons of money today. But so much of GE's portfolio of great businesses that Jack Welch inherited -- those businesses are gone.

I remember reading Welch's first book where he stated he wanted GE to be #1 or #2 in any business line. The only way to do that was to buy businesses who performed in the short run, then cut them loose when they started to underperform.
 
When I was finishing up my PhD, I interviewed with GE, this was about 15 years ago. The whole thing left such a bad taste in my mouth that I hated GE afterwards. I would go out of my way to buy Philips light bulbs instead of GE.

They had an information session with all the candidates they were interviewing, there was about 20 of us. They talked about their policy of firing 10% of their workforce every year, to clear out the dead weight. It seemed like such a draconian and arbitrary policy and I thought there is no way I want to be working there. Then they made it clear that they were really only interested in Chinese students since they were opening up a 1000 person research facility in China and were closing down facilities in the US.

I had a one-on-one interview and it was clear that I had no chance. I really thought the guy was there to interview chinese students to take his own job.

They are no longer an American company as far as I am concerned and I don't care if they are struggling.
 
Government action by itself cannot bring cities back.

There has to be underlying economic and or population growth. But good government working effectively with the private sector during a time of favorable demographic trends and cities can thrive -- lots of examples of this. Cincinnati's a good one.

There are things that money cannot fix. I agree. And there is no guarantee that these places become Main Street USA in Disney World. But, I stand by my statement that ignoring these areas does no one any good.
 
Agree that places like Detroit and North Jersey are different than Youngstown. The jobs, schools, and security need to be in place first. Catch 22.

Don't know much about the Youngstown area, but the advantage that places like Detroit, South and North Jersey have is that they can build the workspaces, and then have people come there to work, even if they live elsewhere. That is the start. Get the businesses in place first, generating some tax revenue, etc. Everything can fall into place after that.
 
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There's a good logic to that, but what Welch wasn't willing to do was invest in those business so that they could stay at #1 or #2. Instead he demanded huge returns and de-invested in the businesses until they fell to #3 at which point GE sold them off. So today they really have very few businesses in a strong marketplace position today -- jet engines is one that has survived somehow.

I remember reading Welch's first book where he stated he wanted GE to be #1 or #2 in any business line. The only way to do that was to buy businesses who performed in the short run, then cut them loose when they started to underperform.
 
Government action by itself cannot bring cities back.

There has to be underlying economic and or population growth. But good government working effectively with the private sector during a time of favorable demographic trends and cities can thrive -- lots of examples of this. Cincinnati's a good one.
Agree, although I don't know much about Cincy. Except for the turkeys that fall out of helicopters.
 
Aircraft engines is GE's last great business and it is doing very well.

An engineering, R&D-centered manufacturing business with American employees.

Go figure.

They are no longer an American company as far as I am concerned and I don't care if they are struggling.
 
They talked about their policy of firing 10% of their workforce every year, to clear out the dead weight. It seemed like such a draconian and arbitrary policy and I thought there is no way I want to be working there.

That 10% thing was a Jack Welch thing, it's long gone. They even abolished annual performance reviews last year. In this economy, given GE's loss of prestige, skilled employees are really hard to hire so you don't want anything that puts you at a further disadvantage. It's not like GE can offer a lucrative stock incentive program -- not with their stock losing 50% of its value.
 
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diversified way too much into places that were not core business. then whenever any business made a profit, they took all that profit out and paid in bonuses to upper management. Not unlike a lot of big, old once great companies. then in subsequent years in a 'down' year, gotta borrow money to stay afloat as just don't have the reserve. Can only do that for so long until the creditors keep demanding more and more and eventually that ponzi type scheme just cannot keep up.
Actually Jack Welch (and the Harvard Business School) deserve most of the blame for wrecking GE. He was the leader of a class of CEOs who focused only on margins and short-term returns and thought engineering and manufacturing were passe.

Instead of growing businesses, Welch and his successor Jeffrey Immeldt spent 25 years squeezing all their businesses for short term profit (or selling them off when they didn't deliver the 25% margins they wanted) and investing the money in Wall Street schemes that performed great on quarterly reports but long-term were risky and became disastrous when the recession hit. GE lost $4 or $5 billion on subprime lending alone. Their total loss on financial services (GE Capital) is over $20 billion and counting.

Meanwhile, starved for capital, GE's remaining manufacturing businesses lost ground. GE laid off North American employees (including design and engineering) and outsourced everything to the Third World. Which made tons of money short-term but long-term the GE brand came to mean very little. In category after category, there's no reason to buy a GE product because it is just their brand slapped on the same Chinese technology that you can usually buy cheaper under another brand.

Now the tables have turned, manufacturing is cool again in CEO circles. GE and Ford kept making cars, Boeing kept making planes and -- lo and behold -- they are making tons of money today. But so much of GE's portfolio of great businesses that Jack Welch inherited -- those businesses are gone.

Still, it's a shock to see that GE has lost HALF of its value in the last year. That is a meteoric fall.

Excellent summary. And not GE alone that did this and suffered. Look at Dupont and Dow, two other great american companies that are suffering. You cannot get 25% returns all over the place without taking tremendous risk and cooking some books. And that only leads to short term thinking and gains and long term issues. Now coming home to roost for a lot of once great American companies. I would add that a lot of this was done by these CEO's and top management to show a great year or two, take their $100+ million dollar retirement packages and walk away. Money was paid out in outrageous bonuses that should have been kept for a rainy day or put back into R&D and other projects.
 
GE needs Jack Donaghy and a strong microwave division.

I'm reading Jim Collins' book "Good to Great" at the moment. Collins wrote an article discussing his 10 greatest CEOs of all-time and didn't include Welch. The reason? "Great CEOs build organizations that thrive long after they're gone." Collins also said that history will likely judge Welch as a great CEO, and while textbooks certainly do that.....tboyer makes a lot of good points about Welch's "leadership."

That said, "Good to Great" has an interesting set of companies to discuss, including Circuit City.
 
When I was finishing up my PhD, I interviewed with GE, this was about 15 years ago. The whole thing left such a bad taste in my mouth that I hated GE afterwards. I would go out of my way to buy Philips light bulbs instead of GE.

They had an information session with all the candidates they were interviewing, there was about 20 of us. They talked about their policy of firing 10% of their workforce every year, to clear out the dead weight. It seemed like such a draconian and arbitrary policy and I thought there is no way I want to be working there. Then they made it clear that they were really only interested in Chinese students since they were opening up a 1000 person research facility in China and were closing down facilities in the US.

I had a one-on-one interview and it was clear that I had no chance. I really thought the guy was there to interview chinese students to take his own job.

They are no longer an American company as far as I am concerned and I don't care if they are struggling.


This isn't just GE. Similar situation at my former company and many other companies.

All those plans work quite well when you're at the top and your stock is going up. What happens is that it collapses quite quickly when the stock goes down and you are somewhere in the middle.

This is the 30k foot problem. The people making the decisions and drinking the Flavor Aid are not connected with the people on "the line".

Not to say that Immelt wasn't a disaster. He was. Terrible.

It is one of the things that makes the corporate model so good. All corporations, in a competitive environment, eventually fail.

LdN
 
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My first job out of Penn State was with the lamp division in 1968. It was their richest at that time. It taught fabulous business and self auditing skills. My six years there set the foundation for a good career in customer service and distribution manager. I worked fir an alcoholic in Boston and rank the place after lunch. I was young and made mistakes but learned much more than I would have.
 
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On a brighter note, I saw Ford purchased and will transform iconic (and currently dilapidated) Michigan Station as part of a mixed use, downtown development in West Detroit. Well done guys!
You can’t soar like an eagle when you roost with turkeys. The same useless politicians will still continue the dive to hell.

---

Trying to sum up the significance of Ford’s plans for the Michigan Central Station, a quote by Winston Churchill seems apt.

“Now, this is not the end,” Churchill said of an early Allied victory in World War II. “It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

That’s what Ford taking on the old train station means for Detroit. Years of hard work lie ahead for the city to truly come back. But Ford’s act of faith in Detroit’s future with the enormous investment it will bring signals a new era.

Victory no longer seems so remote. The issue is no longer in doubt.

Let’s take a moment to be clear about what Ford’s historic move won’t do. It doesn’t, by itself, solve Detroit’s underlying challenges of race and poverty. It will not, by itself, do anything for still-lagging neighborhoods far from Corktown. Indeed, the prosperity heading Corktown’s way seems probable, at least for a time, to exacerbate complaints of gentrification in the city.


636646139987333885-depot-031504-viewwest-kk.JPG


Buy Photo
Michigan Central Station in March 2004. (Photo: J. Kyle Keener, Detroit Free Press)

But even admitting all that, Ford’s purchase of the train station shines as a turnaround of miraculous dimensions. There’s no other way to say it: This Ford deal for the train station is the Big One. The one event in the city's comeback story that outranks all that has gone before.

636646030270280059-061318-michigan-centra-44-.JPG
 
This isn't just GE. Similar situation at my former company and many other companies.

Yeah we were in Seattle when Boeing fell under the sway of this philosophy -- and it almost killed them. They had a chairman (Phil Condit, who was actually a brilliant engineer) and a CEO (Harry Stonecipher, basically a bean counter) who became convinced that Boeing should get out of manufacturing and get into financial services. So they sold off manufacturing capacity, slashed R&D and put money into their aircraft leasing business. They actually believed manufacturing airplanes was not going to be Boeing's business model.

It really hurt Boeing, they lost ground to Airbus, they lost a couple billion on aircraft leasing which they weren't very good at.

Now Boeing is back and the philosophy has done a 180 -- Boeing is trying to outsource less and bring manufacturing back under its own roof because they've realized, like the German conglomerates -- it's actually the biggest profit center they have.

Today intellectual property is everything -- you don't want China buildling your aircraft wings because tomorrow China will steal the designs and build knockoff airplane wings and compete against you.

I think Jack Welch was the devil and most of what he stood for is discredited.

The only part of Jack Welch's legacy that's alive and well is the $100 million CEO salary, the huge annual bonuses even when the company underperforms, the multiple corporate jets and corporate apartments, $10 million birthday parties and $8 million bathrooms with solid gold bathtubs. That's the part of Jack Welch that lives on.
 
Government action by itself cannot bring cities back.

There has to be underlying economic and or population growth. But good government working effectively with the private sector during a time of favorable demographic trends and cities can thrive -- lots of examples of this. Cincinnati's a good one.

Detroit is a pretty remarkable story - survived it's bankruptcy, was able to keep it's massive and important art collection, and now Ford with a big investment in the city. Still, another example of one city's over-reliance on a single industry and how it lives and dies with said industry. I have colleagues who work in Windsor and do not leave their cars or hotels when they go to Detroit. Hopefully that changes soon.
 
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I know squat about Michigan short of its hideous fb fans (with some exceptions @Anison) and generalized collapse of its economy.

Correct. You do not know squat as regards Detroit and the great state of Michigan (and your numerous previous posts when you degraded both were emotionally based as opposed to logically based, and those posts were uninformed).
 
Don't know much about the Youngstown area, but the advantage that places like Detroit, South and North Jersey have is that they can build the workspaces, and then have people come there to work, even if they live elsewhere. That is the start. Get the businesses in place first, generating some tax revenue, etc. Everything can fall into place after that.
Agree.....but infrastructure has to come first. And by that, I mean public transportation, safety, reasonable food, schools, taxation etc. The problem for Detroit, is that everything you said about the cities, is now readily available in the near 'burbs. Unlike Jerzy, LA, Chicago....that ship has sailed. I hope I am wrong..but if you go to every mid-major city, the first exit outside the home county is almost always the best economy in the region.
 
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