Coca-Cola, Home Depot, UPS and Delta Air Lines sit atop the pedestal of Atlanta corporate giants for the jobs, revenue and prestige they bring to the region.
Curiously absent is General Electric, which has two of its five divisions headquartered in Cobb County. Revenues from these businesses dwarf any other Georgia corporation.
And, after a rough decade during which GE’s stock fell 90 percent, dividends went unpaid and executives traveled hat in hand to Washington for financial support, the Atlanta divisions continue to perform solidly and could lead the company from its recessionary funk.
So why isn’t GE —which practically invented the modern, globe-spanning conglomerate and transformed Thomas Edison and Jack Welch into household names — more recognizable in Atlanta?
“It’s because we’re not a consumer-oriented business,” Dan Heintzelman, a top GE Energy executive in Atlanta, said in an interview last week. “We support utilities and industries all over the world, and that’s not necessarily in front of the public every day. We’ve got a big employee base here in the state, so it would be great if we were better known.”
That is likely to happen if, as expected, the Atlanta divisions grow and make up a greater share of GE’s overall business. Earlier this year the company transferred its electrical operations unit from Louisville, Ky., to Atlanta.
The corporate restructuring won’t bring new jobs to Atlanta just yet, but it does boost GE Energy’s size and prestige. The move shifted 17,000 employees under Heintzelman’s leadership.
GE counts 323,000 employees in 160 countries. Revenues reached $157 billion in 2009. The multifarious multinational makes everything: dishwashers, refrigerators, turbines, locomotives, aircraft engines, X-ray machines, circuit breakers, substations, TV sitcoms and Hollywood movies.
Its financial arm deals in real estate loans, credit cards and home mortgages. GE has embraced renewable energy and health care. Forbes magazine labeled GE, headquartered in Fairfield, Conn., the world’s biggest company last year.
Who can forget the company’s ubiquitous slogans: “ Progress is our most important product,” “We bring good things to life” and the ongoing “Imagination at work.”
It was the lowly light bulb, though, that emblazoned GE (and Edison) into the nation’s psyche. In 1890, the Edison General Electric Company began making incandescent electric lamps.
The company’s scientific prowess was matched by an aura of corporate excellence embodied by Welch, the no-nonsense CEO (1981-2001) who redefined managerial leadership. Welch decreed that GE should rank first or second in any industry or get out of it.
GE bought NBC in 1986. Welch further shifted GE’s focus in the 1990s from manufacturing to financial services. Both moves would later haunt the company.
In March 1998, GE Power Systems (GE Energy today) transferred 450 jobs from Schenectady, N.Y. to the Wildwood office park off Powers Ferry Road. GE cited the usual relocation reasons: accessible metro airport, tax breaks, engineering graduates and quality of life. The division’s headquarters officially arrived two and a half years later.
In July 2008, GE established its technology infrastructure headquarters in Atlanta with John Rice in charge. John Krenicki Jr., GE Energy’s chief, and Rice are two of GE’s four vice chairmen.
At the 2001 annual meeting, held in Atlanta, GE’s board tapped Jeffrey Immelt to succeed Welch. Robert Nardelli, who also was in line to replace Welch, had departed a few months earlier to run Home Depot.
During Welch’s tenure GE revenues quintupled to $130 billion. Its stock traded around $50 when he stepped aside.
On Friday, it closed at $15.55.
“Their total business has been clobbered,” said Ken Bern hardt, Georgia State University marketing professor. “GE Capital, like most financial institutions, has experienced significant losses. Television ad revenues are down. Most people postpone buying appliances. Lighting has gone down with commercial construction.”
GE profits dropped 19 percent last quarter and Immelt predicted earnings would remain flat in 2010, then climb again in 2011. No division was spared the pain.
Earnings at GE Capital, mired in the same recessionary mess as most banks and financial institutions — bad loans, credit card delinquencies and still-floundering commercial real estate — dropped 67 percent from the previous quarter.
NBC Universal’s troubles began before the Jay Leno imbroglio went public with DVD sales and poorly received movies dragging profits down 30 percent.
It was a mixed bag for GE’s industrial, Atlanta-based divisions with sales of aircraft engines and locomotives dipping. Yet hospital equipment revenues rose nicely. Signs abound that Atlanta will play an important role as GE looks to rebound.
In December, for example, GE Energy landed a $1.4 billion contract to supply giant turbines for an Oregon wind farm. Saudi Arabia, Iraq and other countries continue to place orders for gas turbines.
GE has a $175 billion industrial backlog, primarily in the developing world. GE earns 60 percent of its money overseas with China, India, the Middle East and Brazil offering the most promising markets.
“The United States is still important, but the emerging markets in the rest of the world are clearly growing faster,” said Heintzelman, 52, CEO of the energy services unit. “There’s explosive growth in those countries and the demand for energy is growing.”
Analyst Nicholas Heymann, however, isn’t convinced GE is well-positioned to ride the global momentum. He noted that GE lags behind competitors, such as Siemens and ABB, in a variety of fields including high-voltage transmission wires and LED lights.
GE’s “businesses that were hard hit in 2009 will come back in 2010, but not nearly as fast as their competitors,” said Heymann, of Sterne, Agee and Leach in New York. “It’s an unusual predicament for GE to be in so many big, emerging markets where they don’t have the leading edge. They’ll have to reinvent the business.”
Heintzelman, like Immelt, says they’re doing just that. GE is paring finance and embracing clean tech, which includes energy efficient utilities and homes, and health care. It’s trying to sell a majority stake in NBC to Comcast. A return to its core industrial businesses — the things done well in Atlanta — is paramount.
“And that does bode well for Atlanta,” Georgia State’s Bernhardt said.
“There may not be a lot of jobs moving here, but they’re high-paid jobs that over time could bring other jobs here. And John Rice, with a lot of clout in the corporation, is a really critical factor. The more revenue the Atlanta divisions bring, they can support the community to a greater degree.”
Rice, who chaired the Metro Atlanta Chamber in 2004, engineered a $22 million GE grant for the Atlanta school system to boost students’ math and science skills.
Heintzelman says GE’s Atlanta presence, both civic and commercial, will only grow.
“This is a great place to build a busines he said.
