The largest part of the $22 billion write-down was related to the Alstom acquisition. It amounts to a declaration by G.E.âs new management team that it will never generate the earnings the earlier management team had projected.
âAlstom was the biggest bet, but it was symptomatic,â said Deane Dray, an analyst for RBC Capital Markets.
There is a debate among former G.E. managers over whether the company was slow to respond to the market turn or, as the largest producer in the market, was destined to be hit hardest.
But the G.E. power unit still has outstanding technology and a long roster of customers, analysts say. The key to a comeback, they say, is quickly addressing the basics of the business. Cutting costs will be part of the formula. But, they say, so will more closely catering to customers, and retaining experienced midlevel managers and skilled engineers.
All of G.E.âs industrial businesses have been through severe setbacks in the past, including industry cycles and quality issues. But each time, the company has stayed the course and emerged.
In the longer term, natural gas is predicted to be one of the winners in the energy market, plentiful and relatively clean, unlike coal or nuclear.
âRight now, G.E. is in a real trough, and it looks like the business is collapsing,â said Richard Keck, president of the Keck Group International, a power plant consultant. âBut if they donât panic, it will come back.â
âBy 2022,â he added, âwhoever is leading the G.E. power business might well be a hero.â