By: Jesse Comeau, Mariana Gonzalez, David Loffredo, and Michael Czerwinski

History throughout the years -By 1890, Edison established the Edison General Electric Company by bringing his various businesses together -During that period, a competitor emerged. The Thomson-Houston Company became a dominant electrical innovation company through a series of mergers led by Charles A. Coffin, in 1892 the two companies combined. They called the new organization the General Electric Company. -While its consumer products are most visible to the general public, they account for a minority of the company's annual sales. A substantial portion of the company's sales are to the US Department of Defense's. GE’s Business groups in the early 21st century were in the areas of commercial finance, consumer finance, infrastructural, consumer and industrial technologies, healthcare and media entertainment through NBCUniversal. -In 2011 GE sold a majority stake in NBCUniversal to Comcast, which acquired the remaining shares two years later. -In 2016 GE moved its headquarters from Fairfield, Connecticut, to Boston -GE is now one of the largest and most diversified corporations in the world.

GE Divisions Appliances and Lighting Aviation Capital Energy Management Healthcare Oil & Gas Power and Water Transportation

Geographical Divisions GE has operations in 170 countries United States Europe Asia Americas Middle East and Africa

Political Risk Majority of suppliers are based within the United States GE also has a number of suppliers in: United Kingdom Sweden China India

5 events shaping political risk GE faces -GE reported 5 risk factors that are shaping political risk, from climate change to conflict. Patterns that occurs consistently, but are trending negatively; ultimately leading to crisis. Singular long term events that hit with tremendous force Patterns that bring greater and greater impact Sudden events that happen so infrequently they are are considered patterns, until one transpire. Patterns that are speeding up, eventually happening so frequently that there is little chance to prepare for or react to them

Political Risk - United Kingdom Strengths -Hydrocarbon production meeting three-quarters of energy needs -Advanced sectors (airspace, automotives, pharmaceuticals) -Low corporate taxes Weaknesses -Uncertainties about the implementation and impact of the decision to leave the EU -Economies dependence of financial services -High level of public debt -Sizable private debt ( especially property debt being 125% of disposable household income)

Political Risk- Sweden Strengths -Open, diversified, and competitive economy -Specialization in high tech products and green economy -Sound public finances -Increasingly dynamic demographics Weaknesses -Highly concentrated banking sector -Tensions on the real estate market -Significant household debt

Political Risk - China Country Risk Rating: B (Acceptable Risk) Business Climate Rating: B (Acceptable Risk) Strengths: Reduced risk of external over indebtedness due to high level of FX reserves and the maintenance of account surplus Sovereign risk contained: public debt mainly domestic and denominated in local currency Development of services and infrastructure Weaknesses High volatility in the strong market Social tensions (rising inequalities) Share of consumption in GDP remains weak Aging population and gradual drying up of abundant/ cheap labor Fragile Chinese banks (rapid increase in credit and deterioration in asset quality)

Political Risk - India Country Risk Rating: A4 (low risk ---> Acceptable risk) Business Climate Rating: B (Acceptable Risk) Strengths Diversified Growth Drivers Solid Fundamentals: High levels of savings and investment Effective private sector in services Moderate external debt and satisfactory FX Weaknesses Lack of infrastructures Cumbersome bureaucracy and president political deadlocks Net importer of energy resources Rising debt of private companies Weak public finances

Financial Risk - United Kingdom Lowest financial risk level (CRT-1, AMB) World’s 5th largest economy Real GDP grew 1.8% in 2016 and UK has current inflation level of 3% - the highest since 2012 Vote to leave the EU in June, 2016 creates economic uncertainty in the country GDP has grown by .4% in the third quarter of 2017, expected to grow another .48% by the end of the year, despite economic concerns regarding the EU

Financial Risk - Sweden Lowest financial risk level (CRT-1, AMB) 26th largest economy in the world GDP grew by 3.3% in 2016, and has currently grown 2.9% from Jan. to Oct. in 2017 Unemployment and inflation rates are at 6.3% and 1.7%, respectively Concern following U.K.’s vote to leave EU due to the volume of exports shipped to the U.K

Financial Risk - China Moderate level of financial risk (CRT-3, AMB) Second largest economy in the world (behind the United States) Recently experienced rapid economic expansion, but is expected to slow down GDP grew by 6.7% in 2016 and is currently grew 6.8% from Jan. to Oct. in 2017 Credit growth has been primary driver of economy, but concerns rise with excessive levels of lending, making China more susceptible to shocks

Financial Risk - India Moderate level of financial risk (CRT-3, AMB) World’s sixth largest economy One of the fastest growing markets, GDP grew 6.8% in 2016 and is expected to grow by 7.2% by the end of 2017 Banking sector is vulnerable due to a rise in the amount of non-performing assets

GE sells their Industrial Solutions division GE announces plans to sell division in December, 2016 . Swiss engineering firm ABB announces their intent to acquire - September, 2017 Agreed to purchase for $2.6 Billion Hopes to solidify their position as the number 2 global electrical supplier Will continue to supply GE with a long-term contact Industrial Solutions: Produces: circuit breakers, switchgear, and power supply equipment Employs about 13,500 people worldwide Accounted for about $3.7 billion in revenue last year GE’s operating income is about 6%, ABB’s is about 15% About 50% of sales are done internationally

Discussion GE sold the division in an attempt to refocus on core businesses Over the past decade, GE has sold off multiple business segments, often to foreign entities What are the risks ABB will be undertaking? Political Financial

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Works Cited http://fortune.com/2017/09/25/ge-industrial-solutions-abb-sale/ http://www3.ambest.com/ratings/cr/crisk.aspx https://tradingeconomics.com/sweden/gdp-growth/forecast https://tradingeconomics.com/united-kingdom/gdp-growth/forecast https://tradingeconomics.com/china/gdp-growth-annual/forecast https://tradingeconomics.com/india/gdp-growth-annual/forecast