Does General Electric Know What It Is Doing?

April 2, 2019 By Norman Rogers

General Electric, a giant company with 280,000 employees and $120 billion in revenue, has run into extreme problems during the last few years. The price of its stock has crashed and the dividend has been reduced to practically nothing. This is, I think, the result of very bad management in previous years. Of its major divisions, Aviation (jet engines) and Healthcare (equipment) seem to be doing well. Renewable Energy and Power are more problematic. Both these divisions support the delivery of electricity. Renewable Energy makes wind turbines and Power makes gas and steam turbines.

Together these two divisions lost about $500 million on $36 billion sales in 2018.

In GE’s 2018 10-K report, the poor performance of the Power segment is blamed on “renewable energy penetration.” The implication is that GE is unable to sell as many gas and steam turbines because these are being replaced by renewable energy, meaning wind or solar power. But wind and solar power require backup plants that provide power when the erratic wind or solar is sleeping. Those plants almost always require gas or steam turbines.

Wind and solar can’t displace fossil fuel plants, because those plants are needed to carry the full load when wind or solar is not generating electricity.

In the 10-K report, GE claims that “Renewable energy is in a rapid transition period and is on track to become a fully commercialized, unsubsidized source of energy, successfully competing in the marketplace against conventional energy sources.” This claim is hilariously ignorant. GE is repeating the propaganda of the wind and solar industries. GE is part of the wind industry, but it should not substitute propaganda for facts in its 10-K. ............Read more