ECONOMICS

Lights Out: Pride, Delusion, and the Fall of General Electric

Houghton Harcourt. Apr. 2020. 368p. ISBN 9780358250418. $28. BUS
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What went wrong with General Electric? That’s the question Wall Street Journal reporters Gryta and Mann attempt to answer. They start with a brief history of the company from its founding through its expansion under Jack Welch (1981–2001) into financial services (GE Capital) and broadcasting (NBC). Welch’s successor, Jeff Immelt (2001–17), explain the authors, faced a difficult economic climate and tougher accounting rules, making it hard to grow and manage earnings. After the 2008 financial crisis, with GE Capital in trouble, Immelt was forced to cut the dividend, sell off pieces such as NBC, and watch investor confidence wane. The authors detail his unfailing optimism, the company’s awkward structure as a conglomerate, and its use of “creative accounting” to meet fiscal goals. They also chronicle Immelt’s feverish attempts to shrink the company’s dependence on GE Capital, his failed bet on energy markets, and the discovery of a $15 billion long-term care insurance liability
VERDICT This revealing and accessible postmortem of GE’s downward spiral will be important reading for a wide audience, including customers, employees, former employees, and investors, as well as anyone interested in 21st-century corporate management.

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