Thomas Alva Edison opened a laboratory in Menlo Park, New Jersey in 1876 where he was able to explore the possibilities of generator and other electrical devices that he had seen in the Exposition. From that laboratory, Edison came up with the greatest invention of the age – a successful radiant electric lamp. Edison brought his various businesses together in 1890 and established the Edison General Electric Company.
In 1892, a merger of Edison General Electric Company and Thomson-Houston Electric Company created General Electric Company.
Before the creation of General Electric, a series of mergers in the late 1880s created three giant corporations. The several Edison companies and the Sprague Electric Railway Company merged, incorporating officially in January 1889, to become Edison General Electric.
George Westinghouse’s inroads into the industry in the mid 1880s with the alternate current (AC) system challenged and eventually replaced the DC system. Arc lighting, for open spaces, and incandescent lighting, for internal use, complemented each other, and together, they challenged gas lighting. In addition, the industry diversified into electric motors and traction.
Another company is the Thompson-Houston Electric Company. Elihu Thomson was the improvement-innovator who together with Edwin Houston gave rise to the Thomson-Houston Electric Company. After a few years of work, by the end of 1881, Thomson felt he had finally built an arc-lighting system, which was technically superior to any other in the market. In the middle of 1882 a group of Lynn businessmen, including Charles A. Coffin, became interested in Thomson’s system and Thompson-Houston Electric Company was founded in 1883 to exploit arc-lighting patents of Elihu Thomson and Edwin Houston.
Thompson-Houston Electric Company of Lynn, Massachusetts, acquired seven competitors between 1888 and 1890 and emerged with the majority of the arc lighting business, a clutch of key patents, and a large pool of skilled personnel. The Thomson-Houston Company led by Charles A. Coffin the salesman and organizer, and became the Edison General Electric Company’s competitor.
Thus in 1890 there were three large corporations in the electrical industry: Edison General Electric, Westinghouse and Thompson-Houston.
After many mergers of the late 1880s the patent positions of the three corporations remained extremely confused in many respects. In particular the Thompson-Houston Company held weak patents in incandescent lighting, and Edison General Electric had few patents in the alternating current field.
Equally important problems bedeviled the electric street railway business, where each had some patents; similar conflicts prevailed through every products line in the industry. Merger promised an end to these potential conflicts; competition virtually ensured many legal expenses and price wars, not to mention the possibility of exclusion from new markets.
All three competitors considered mergers with each other two before the Edison General Electric Company and the Thompson-Houston Company joined in 1892.
They became General Electric. With their merger the entire electrical industry was reduced from fifteen competitors to a duopoly in just five years. Westinghouse and General Electric completed this rationalization in 1895 by signing a patent sharing agreement, effectively removing the last barrier to market control.
Many of the Edison's early business contributions are still part of GE today. Some of these contributions include lighting, transportation, industrial products, power transmission, and medical equipment. Earlier of 1890s, GE produced its first appliances electric fans at the Ft. Wayne electric works while a full line of heating and cooking devices were settled in 1907.
Historical development of General Electric
