One of many challenges for the new GE CEO: U.S. government contracts
Elon Musk’s hijinks may place Tesla’s ($NASDAQ:TSLA) shaky fortunes at the top of the business press every day, but in the annals of beleaguered companies, General Electric ($NYSE:GE) is truly above the fold.
In June, the company was dropped from the Dow Jones Industrial Average after a century on the index. It's a fall from grace that was once unimaginable to executives of the company that invented the power grid and has sold us our light bulbs since they became commercially available.
Two CEOs later, the issues with GE have become clearer. Primarily, GE is simply too complex, a labyrinthine-like agglomeration of companies that no one can understand in its totality, least of all analysts.
But what they can glean is what’s happening inside the black box. Some of GE's subsidiaries, such as GE Capital, have been failing underneath the giant corporate umbrella. It lost $2 billion in the first half of this year, and its employees are not confident in the financial service unit's future.
Meanwhile, GE stock is down about 62% from a recent high in December 2016, but the company’s market cap is not the only thing that has dipped. According to federal data tracked by Thinknum, General Electric has received fewer and fewer federal dollars since 2007, when federal deals brought the company more than $3 billion. By 2017, that source of revenue fell to about $1.6 billion.
(Note: Each year is marked by January 1 of that year)
Through the first quarter of 2018, it only had $32.27 million in money obligated to them through government contracts. However, there initial reports that it won a $15 billion contract for power stations in Iraq thanks to the U.S. government, and if this is true, then it would prove to be a massive victory for the struggling power company. It also has won a few defense contracts already this year after the first quarter, which could help turn around this engative trend.
Still, sentiment at the company overall has also continued to decline since we looked at it a few weeks ago.
According to Glassdoor reviews, employees are pessimistic, untrusting of the executives that have come in and out of GE over the past two years. They are the least confident in General Electric's business outlook since Thinknum started tracking Glassdoor data, and giving it the highest percentage of 1-star ratings — the lowest a company can receive — as of today.
But a light glimmers towards the end; the company’s business outlook scores at least aren’t sitting precisely at their low-points. Perhaps employees are hopeful that the check from Iraq will clear, and that the third time’s the charm with a new executive at the helm, who we will track as Glassdoor resets the new CEO’s approval rating.