You could make some good
bucks betting on Jack Welch when he was head of General Electric, which he
turned into The Last Real Conglomerate. Welch, 84, died of kidney failure
at his Manhattan apartment. He’d been
out of the corporate culture since 2001.
And lately, his management style was out of fashion.
You bet on Jack by
buying his stock which kept splitting and rising and splitting and rising
endlessly in proportion to his opening, closing, buying and selling businesses
and at the same time cutting the number of workers in half. Four hundred
thousand people dwindled down to about 200-thousand.
That’s where the Neutron
Jack thing came from. The neutron bomb kills people but leaves buildings more
or less intact. Handy, because a few thousand years after the blast, you can
start to decontaminate the irradiated building and the land it sits on, and
maybe build a highrise. Call it Gamma Ray Acres.
He bought RCA. The
rationale was RCA owned so many juicy patents, it could stop making anything
and live on the royalties. Along with that came NBC. Welch put this Hempstead, Long Island boy
lad, Bob Wright, a GE
lawyer in charge. What Wright knew about broadcasting at the time you
could put on the quick start guide for your TV set. Maybe a matchbook.
But he learned. And fast. And he turned NBC around from an also ran to
a ratings and revenue powerhouse. (Lopping off heads along the way. Less is
more? Wright is no hippie or new ager, but since his retirement has been busy
in Autism awareness.)
One of the business
magazines called Welch the CEO of the century. Maybe stock tout of the
late 20th century would have been truer.
He was a genial
fellow. Smallish. A ready smile
and handshake when not surrounded by linebacker-grade “assistants.”
Today, GE is a shadow of
its Welch-era importance. Blame part of that on market conditions over
the years following his retirement in 2001. But probably without knowing
it, Welch was sowing the seeds of that decline even in his prime.
Some people spotted
those seeds (ahem!) but no one paid any attention. Here’s a fine example:
In one of his jillion speeches, he called GE “an information company.”
Wrong, Jack. It is a big company that lends
tons of money at good rates, builds things no one can lift and which make
horribly loud noises if dropped from the tops of buildings or aircraft flying
at almost any altitude.
If that’s what he really
thought, he was getting out of touch. Here’s a long term look at the stock
price:
Other than that silly
description -- “a communication company” -- and some missteps (selling the NBC
Radio Network and letting the acquiring company keep the name; naming his own
successor at GE, someone who couldn’t or wouldn’t keep the company on track,)
he was the template for his era.
That’s a description,
not a compliment. And it raises questions about “his era.” Maybe it
and not Welch was the neutron bomb.
I’m Wes
Richards. My opinions are my own but you’re welcome to them. ®
Any questions? Wesrichards@gmail.com
© WJR 2020
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