The federal government, while actively opposed to many kinds of mergers and acquisitions, was pretty lax when it came to companies expanding into unrelated industries.
To many companies, the answer was simple: it was a way for them to get bigger and more profitable. "I remember that one of the first questions in the first finance exam that I took was: what is the business rationale for conglomerates?" says Lev, who recently retired after many years as a professor at NYU's Stern School of Business. In 1968, The Saturday Evening Post magazine declared in a headline, "It Is Theoretically Possible for the Entire United States to Become One Vast Conglomerate."īack when conglomerate mania was at its zenith, in the mid-to-late 1960s, Baruch Lev was a PhD student at the University of Chicago. Or Litton Industries, which began as an electronics company and defense contractor, but gobbled up Stouffer's frozen foods, a typewriter company, a manufacturer of household appliances, and various furniture makers. Or the LTV Corporation, which oversaw companies in aviation, consumer electronics, missile manufacturing, sporting goods, and meat packing. Take the ITT Corporation, which, through a frenzy of acquisitions, controlled companies like Sheraton Hotels, Avis car rentals, Hartford Insurance, and the maker of Wonder Bread.
But are Techglomerates really different? Or will the same forces lead to their demise? When Conglomerates Were Groovyīack in the late 1960s, conglomerates were all the rage. Investors treat old-school conglomerates like they're radioactive, but they're treating Techglomerates like they're Pete Davidson (who apparently everybody wants to hold these days). Companies like Google, Facebook, and Amazon have been acquiring companies and entering into industries they've traditionally had no involvement in. GE is just one of a few lumbering dinosaurs that survived the asteroid crash.īut while the old American conglomerates are going extinct, a new breed is evolving to take their place at the top of the food chain: Techglomerates. But, the truth is, that age ended decades ago in the United States. You might call this the end of the conglomerate age. Private equity firms are expected to further pick away at the dying conglomerate's carcass. That is, until earlier this month, when GE announced it was splitting into three separate companies, independently focused on aviation, healthcare, and energy.
Despite downsizing in the years since 30 Rock first aired (2006), GE remained the quintessential conglomerate. "I'm the new vice president of East Coast television and microwave oven programming."ģ0 Rock perfectly encapsulated the absurdity of conglomerates, behemoth corporations operating in a mishmash of unrelated industries. It combines radiant heat, convection, and microwave technology, allowing you to "cook a turkey in 22 minutes." His role in creating the oven is "why they sent me here to retool your show," Donaghy explains. "I'm Jack Donaghy, new VP of development for NBC-GE-Universal-Kmart."ĭonaghy explains GE has promoted him because of "his greatest triumph": the GE Trivection oven. Just then a man in a suit kicks down a wall and barges into the room. In the first scene of the first episode of the classic sitcom 30 Rock, television showrunners Liz Lemon and Pete Hornberger nervously walk into an office under renovation to meet their boss, Gary.