Photo above: President Ronald Reagan. Courtesy Department of Defense, Department of the Navy, Naval Photographic Center. Right: IBM PC circuitboard for the 5150. Courtesy Wikipedia Commons.
U.S. Timeline - The 1980s
The Reagan Revolution
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1985 - Detail
December 11, 1985 - General Electric Corporation agrees to buy RCA Corporation for $6.28 billion in the largest corporate merger ever outside the oil industry.
It was a merger of huge proportions outside the oil industry, but actually a reconnection. Radio Corporation of America had originally been part of General Electric as a wholly owned subsidiary when founded in 1919, pushed into formation after World War I by a Navy that wanted an American company, not the current foreign owned American Marconi, to control radio communication. However, when an antitrust suit was brought against the parent company in 1932, they divested itself of RCA and it was made an independent company with headquarters in Camden, New Jersey. And what an independent company it became.
Prior to the independence, Radio Corporation of America had already established itself as a progressive electronics company with its radio division growing throughout the 1920's to the point that the first radio broadcasting network, NBC, was established by RCA in 1926. They pioneered the advancement and development of television throughout the 1930's, (with first introduction at the New York World's Fair in 1939) and beyond, occupying the landmark building in Rockefeller Center, 30 Rockefeller Center, that became known as the RCA Building in 1933. In 1953, its system for an all-electronic color television became the standard in the United States. RCA remained at the forefront of the electronics industry until the 1970's when they failed to successfully diversify in the computer and video industry, instead moving into areas outside electronics; Hertz Rental Cars, Banquet Frozen Foods, Random House Publishing. This new direction caused financial struggles and falling profts. RCA also became a casualty, in some respects, to the growing dependence on Asian manufacturing of electronics as most components were now built outside the United States.
The Merger Itself
RCA had become a weakened giant as 1985 began and by October 3, 1985, it announced that it was closing its Broadcast Systems Division. On December 11, 1985, the offer from General Electric to repurchase its former subsidiary of $66.50 per share, that $6.28 billion in cash, was accepted. It was thought that General Electric wanted to enter the broadcast business and talks about takeovers had been going on for months. General Electric was the 9th largest corporation at the time with sales of $27.9 billion per year in 1984. RCA was one third that size with sales of $10.1 billion in 1984. However, part of the reason a sale seemed to make sense to General Electric was that RCA was rich in cash, $2 billion, bouyed by a recent sale of Hertz to the parent company of United Airlines for $587 million, and had no debt. Some estimates also indicated that a sell-off value was worth $77 per share and that General Electric got a bargain.
After the culmination of the agreement of sale in June 1986, General Electric was not kind to its former Radio Corporation of America; it began to sell off its parts, choosing the sell off strategy versus pure incorporation of RCA into its fold. It sold its fifty percent interest in RCA Records to what would become BMG Music (now part of Sony). It sold, in 1987, its Global Communications Division (these roots stemmed back to the RCA founding) to MCI. The vision to manufacture RCA and GE televisions was sold in 1988 to Thomson Consumer Electronics of France. Today, NBC is owned by Comcast. What did it keep? Its Government Services Division.
Today, the history of Radio Corporation of America is preserved, with six thousand items, at the RCA Heritage Program Museum on the campus of Rowan University in New Jersey. For more on the General Electric side of the story, you can visit the Museum of Innovation and Science, the former Hall of Electrical History, in Schenectady, New York.
How Did GE Initially Get Its Logo
Way back in 1892 when Edison General Electric Company merged with Thomson Houston Electric Company, they created a logo, i.e. GE, from the G of General of the first company, and the E from the Electric of the second. It was originally used to market electric fans.
Photo above: Former General Electric Headquarters Building in Schenectady, New York, 2018, Carol M. Highsmith. Courtesy Library of Congress. Below: Former Building 17 of the RCA Victor Plant in Camden, New Jersey, 2017, Carol M. Highsmith. Courtesy Library of Congress. Info source: RCA Heritage Museum; Library of Congress; GE.com; Museum of Innovation and Science; Engineering and Technology Wiki; "General Electric Will Buy RCA for $6.28 billion," 1985, Los Angeles Times; Wikipedia Commons.
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