What caused GE's downfall?
General Electric (GE), once one of the most valuable and revered industrial conglomerates in global corporate history, experienced a dramatic downfall driven by a combination of massive strategic missteps, excessive financial leverage, and overexpansion in non-core financial services. The heavy reliance on its GE Capital division exposed the entire corporation to devastating liquidity risks during the financial crisis, requiring emergency lifelines. Simultaneously, high-profile multi-billion-dollar acquisitions—such as the ill-timed purchase of Alstom’s power business right as global energy markets shifted away from fossil fuels—saddled the company with severe debt, declining operating cash flows, complex accounting liabilities, and a loss of investor confidence that eventually forced a corporate breakup.
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