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Last Updated: Sunday, 20 March, 2005, 17:09 GMT
GE sees light in the developing world
By Alex Ritson
BBC World Service business reporter

A Vietnamese woman passes signs for a GE store in Hanoi
GE has operations in more than 100 countries across the world

Not many companies can say they were praised on prime time TV every Sunday evening by a future American president.

But that is what Ronald Reagan spent most of the 1950s doing for the giant American group General Electric Company, or GE.

As the host of the General Electric Theater show, he was the prominent public face of GE - the company founded by light bulb inventor Thomas Edison.

GE was for many years the biggest company in the world by stock market valuation, and was only recently overtaken by the US oil firm Exxon Mobil.

Through the 1980s and 1990s, under the leadership of chief executive Jack Welch, GE transformed itself from a simple maker of electrical appliances to a giant conglomerate with interests in sectors from aircraft engines and power generation to financial services, medical imaging, TV programmes and plastics.

These days, GE's scientists are searching for - among other things - a device to replace the internal combustion engine.

Dot-com crash

The company's value soared during Mr Welch's reign - from $11bn in 1981 to almost half a trillion dollars at the very peak of the market in the year 2000.

The market is in China, the market is in India, the market is in the Middle East
Ferdinando Beccalli-Falco, GE International

But since the dot-com crash, GE's share price has dropped back by almost a third.

"GE was the last company you'd look upon as a dot-com giant, and it wasn't. But it was involved in the structure and infrastructure behind the dot-coms in terms of capacity and facility," says Justin Urquart Stewart, of Seven Investment Management.

"Then, of course, there was concern about its executives and how much they were being paid."

Mr Welch negotiated a multi-million dollar retirement package, which even included the free use of GE corporate airliners.

"Jack Welch, in the corporate world, was seen as an individual who was almost close to God," says Mr Urquart Stewart. "He could do no wrong in how his business was growing."

Iran criticism

GE operates in more than 100 countries and employs around 300,000 people worldwide.

In recent years, it has made great play of its record as a good corporate citizen - for example, auditing its suppliers in the developing world over their labour, environmental, health and employee safety standards.

GE jet engines
GE's giant jet engines are used on planes across the world

"Performance continues to be one of the top priorities that we have, but we do realise very well that there are other values that come into the picture in order to be a good company," says Ferdinando Beccalli-Falco, president and chief executive of GE International, the company's global arm.

GE has faced criticism in some corners for doing business in Iran - one of the countries President George W Bush famously described as a member of an 'axis of evil'.

"We do supply in Iran. We are honouring all our contracts, but we are holding on taking on new orders," says Mr Beccalli-Falco. "We will be ready to take new orders as soon as we have some signs of stabilisation in the country and normal conditions."

Tough decisions

GE is simply seeking opportunities by following new markets, he says.

"Growth in the western world is growth that is somewhat limited. Nowadays, the market is in so-called developing countries. The market is in China, the market is in India, the market is in the Middle East.

"We do go where there is a need for infrastructure creation because GE is an infrastructure company. We supply power generating equipment, we supply locomotives, we supply aircraft engines. We even supply consumer credit. All of these are elemental to helping a developing country grow."

But does the prevailing US political view in any way influence GE's policies?

"We are a business, we are not a political institution," says Mr Beccalli-Falco. "If we take a decision we stand behind our decision, we defend our decision - even if in some situations it might be a decision which is tough to take."

Ferdinando Beccalli-Falco, GE International
"The market is in so-called developing countries."

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