It was essentially a too-big-to-fail bank, inside a company that makes power plants and MRI machines. To meet that goal, a phase-out of coal-fired powered generation is required in the developed nations of the OECD and the European Union by 2030, in China by 2040, and in the rest of the world by 2050. One of the chief responsibilities of the CEO is deciding where to deploy cash. GE, still a staple in investment portfolios, has plummeted 42% this year. Related: GE is breaking up with the light bulb. "It's hard for them to understand how this thing fell apart so quickly. GE, according to the IEEFA report, nearly doubled its fleet of coal-fired power generation in the acquisition and placed a huge bet on the future of natural gas-fired power generation. GE's accounting remains controversial. "It's gone on for many years," said Deutsche Bank's Inch. Don't fight it with acquisitions," said Damodaran. In its calculations leading up to the Alstom acquisition, GE failed to account properly for the rapid decline in the cost of wind and solar generation. 1. Consider GE's $9.5 billion acquisition of Alstom's power business, which makes coal-fueled turbines used by power plants. Yet, as the IEEFA study notes, the long-standing link between the demand for power and U.S. gross domestic product had been well and truly broken. GE reached an agreement with Alstom in 2014 to purchase Alstom’s power and grid businesses for €12.35 billion. Not surprisingly, GE admitted this week that Alstom has been a major disappointment, and that its power business is in shambles. For this next chapter in the GE story, the company is planning to shrink itself by selling its transportation, light bulb and other businesses. Flannery has downplayed accounting concerns, telling CNBC, "There is no accounting issue. Management spent much of 2016 lowering its organic revenue guidance. New CEO Larry Culp even overhauled the power segment and brought in new leadership. He expressed optimism about that challenge, citing GE's long history of remaking itself. Some $20 trillion in stranded assets are at risk from the effects of climate change, according to Bank of England Governor Mark Carney. Buying and maintaining immensely costly power turbines in the face of declining demand was a nonstarter. In 2018 wind’s LCOE had dropped to $42 and solar’s to $43. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All Rights Reserved. In 2016 the number of gas-fired turbines with a generating capacity greater than 100 megawatts sold by all manufacturers totaled 181 worldwide. The failure was serious enough that Exelon said it shut down the power plant -- and as a precaution it also shut another plant that runs on the same GE turbine.. But Flannery has warned that rail faces a "protracted slowdown" in North America, suggesting that buyers will not exactly be lining up. First, the sums involved are huge: Alstom faced a $772m fine, among the largest ever in a … All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2019 and/or its affiliates. In 2018, GE was forced to write down $23 billion in goodwill for its power segment, more than it had paid for the Alstom business just three years earlier. For the latest business news and markets data, please visit CNN ... joined GE through our acquisition of Alstom. They couldn't let it go. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. Inch called the Alstom deal a "disaster" that supports GE's reputation for "buying high and selling low.". 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