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Jack Welch: His final transformation isn't pretty

Jack Welch

This is just a note of condolence to Jeff Immelt. I have no comment or thought on the business difficulties being faced by General Electric right now, beyond to say that it's a tough market, that everybody is in it, that nobody is feeling very good right now, and that I wish them long life and good future health as a shareholder.

Could they be doing something better? Maybe so and maybe not. There are certainly any number of brilliant, sagacious, perspicacious and audacious financial journalists sitting on their comfy fannies right now, pounding away on the poor multinational conglomerate, acute observers of the scene who are willing to offer their gaseous emissions on that subject, critics in the shadow of whose acumen I tremble.  So I'm going to let that be.

What I can tell you is how much tougher it makes it, when a company is in difficult circumstances, for a high-profile showboat former CEO to wade in and add to their troubles. You all know the story so far. GE (GE) fails to deliver its promised numbers, shocks the street, which is already in a state of mouth-breathing frenzy right now, shakes the foundations of global capitalism to the rafters, becomes the poster child for what-is-to-become-of-us thinking. That's bad.

I can assure you - and I don't know any of those guys personally over there - that nobody at that corporation was walking along whistling a happy tune as their particular crisis reared up and whacked them upside their organizational head.

Just as the most acute part of the media feeding frenzy was ebbing and the company was starting to get back down its knitting - here comes Jack Welch, the emblem of executive excellence and rigor for decades, a fine leader of that very company for a long, long time, and one of the most visible profiles in American business.

He jumps on the wounded animal's back and starts hitting it over the head with his own very personal whammy stick. He is sure, he tells a somber gloom-meister on the Company's proprietary cable network, that such a lapse in credibility and performance will never happen again... and that he would be prepared to take out a gun and shoot his hand-picked successor if it did. Waves of drool explode from the financial press and the news cycle starts again.

Ugh. I can tell you how that feels from the inside. It feels lousy. It feels like a guy you trusted and looked up to just put the last knife in to Caesar's body. It feels like: Thanks, Brutus.

Was Jack helping GE by doing this? Is there any objective, rational reason that such statement be made as the company is trying to fight its way out of a problem that we are ALL suffering from at this point?

In a word, NO. Jack gets back into the headlines. Jack reminds us all of what a great CEO he was. Jack distances himself from the Company whose hardships he has no desire to be associated with. And in so doing, I think, he makes the final morph from business person to pundit.

Not a winning transformation this time around, is it.

70 Comments Add Comment

Under immelt's guidance, GE has had no gains for the long term invester. Stock worth less than at the time of the 3:1 split under Welch. Immelt has failed for 7 years to maintain the value, much less grow the stock

Welch operated during a completely different time. He was able to manage earnings (something that if Wall Street truly understood at the time would have driven the stock close to $0), beat up his managers/employees and make himself hundreds of millions of $s along the way. A true leader ... hardly

Right ON!!!
Jack should keep on with his own post-GE personal problems for which he demonstrated dismal performance.

I agree with the writer.
Back off Jack!

Well, Jack wasn't always accurate on his financial forecasts, but never very far off. If there were big misses at the Division or Department levels ... bye, bye!!

Need to remember Jack's last ego trip, a 'merger' with Honeywell. Ever since that fiasco, the stock has pretty much moved sideways in spite of the efforts of a very talented organization.

If I were Jeff Immelt, I would first thank Jack for the wonderful shape he left the company in when I took over as his successor. I'd remind him of the profolio of business that were long past their primes and contributing little to the bottom line. We could then talk about the accounting gimmicks that kept the reported profits robust even while the underlying business were heading down. How I spent my first few years selling off his gems; only recently being able to get back to the kind of bottom line solid returns that are sustainable.

Jack Welsh was CEO of GE long after he deserved to hold that position, trading on past glory, just as he does now.

Jeff ought to just say to him, "Thanks for the words of encouragement, go away!!"

I'm a retired GE employee and shareholder. It's not just this latest miss, but the fact that Immelt has done nothing for the stock price in 7 years. I wish we could get Jack back to run the company again.


Jack was a great CEO but he also is one of the reasons GE stock is where it is today. Before he retired GE stock split 3:1 that should have never happen, 2 for 1 at the most. Yes he was CEO at a time when things were good. Immelt has done a very very good job and nobody wants to give him credit. Jack needs to shut-up..... I dont think he could weather the storms that Immelt has.

While it is true that GE stock price has gone nowhere under Immelt's tenure, he was handed a company that under Jack Welch's tenure had an absurdly high P/E based on hero-worship and rapid but unsustainable growth in financial income. Immelt has had to deal with some inherited imbalances and a rationalization of the GE P/E. These are multiyear problems, and it seems to me he's been working on them.

Santa Clara,

Are you really that blind? Let's take a look at the last 7 years: 9-11-01, War in Iraq/Afghanistan, slowing economy. Did Immelt have anything to do with that? He came in at a tough time. Welch got out at the right time, so he looks even better based on the uncontrollable circumstances.

Hey, no objective reason, but a reason exists: kick start the pump up on the price for stock options.

It was a rather tacky thing to do. Goes to show $ does not equal class.

GE's problems are a microcosm of America's troubles.

Thank you President Bush, for your marvelous management of the American econmy.

It will take generations, if ever, to undo the damage he and his minions have done to us.

Yes, Mr.Immelt should know about the missed earning. But back in Jack Welch time, he was the one transfomed the GE company into a "financial" house in term of revenue, profits, etc. All of these root cause problems date back to Mr. Welch's doing.

Jack Welsh is right. Frankly, a good public verbal whipping would be appropriate for many of today's corporate CEOs. A little humility and circumspection would do them all good.


Jack Welch is perhaps the most egotistical man in today's world. He should go back to writing another book and it could be titled "I, I, Me, Me". Jeff Immlet has his work cut out for him but he's a "class act". I have faith in him as a CEO and as a person of integrity, morals and principals. Not many other CEO'S I could apply those qualities upon other than Mr. Buffett.

Jack was never a very pretty picture in case you hadn't noticed. He happened to make some good decisions in a great business climate and gave no credit to those who did the heavy lifting.

We should not only allow Jack Welch & anyone else in this country to express freely his or her opinions, we should encourage it. We hardly ever hear the cold, hard truth anymore because this country has become overly sensitive, with the liberal press stirring the pot. Mr. Welch told the truth that it was a mistake to make a promise three weeks earlier, and then not deliver. Not only was it dumb, it may be cause for legal action in the wake of Sarbanes-Oxley. The "shoot" comment was just hyperbole; we all know he did not mean that literally. Let’s relax.

Welch's actions are similar, but worse, then Greenspan trying to upstage Bernanke. In the case of GE, Welch transformed a great manufacturing company into a bloated financial company and that is the source of much of their problems. Welch and Greenspan created the mess and now it's up to someone else to clean it up.

What people fail to realize is, under Jack, GE was valued as a "Honeywell" type company because he successfully hid the fact that most of GE income came from the finance arm of GE. Under Jeff, and post Enron, companies can no longer hide where their income comes from and since the street now knows it comes from finance they value the stock more like a "Bank of America" than a "Honeywell". Jeff's trying to grow the non-finance parts of the company but you can un-do what Jack did in a few years. I think the stock will move up but it will take time and Jack doesn't help it by promoting Jack.

I submit that Welch failed when he personally picked Immelt as his successor.

Why doesn't Welch flog himself for picking someone that has failed so miserably for shareholders?

Jacke W. who had written into his retirement pkg.
that GE will be paying for his dry cleaning and extra
apt. has just lost what little respect I had for him.
It is too easy to kick your 'ol company when they,
like the rest of the world, are hurting.

news shows must produce 'news', so it's no surprise that much is made of the hiccup. Maybe the timing of Welch on CNBC the morning of GE's announcement was just accidental, but it was a great chance to make a few headlines. Maybe it tasted a little like Welch's sour grape juice, but I didn't hear the ego ingredient as much as Stan, since the ego was already well known when you listen to Jack.

I aggree completely. Let Jeff do his job. He is undoubtedly on top of it and he explained the problem and what caused it. Now let him and his team continue with their winning ways even though it may take a few months to recover.

I sa the Welsh comment and he wasn't chastizing Immelt for GE's missing the number so badly (although seeing the stock's price performance over Jeff"s 7 year tenure, maybe he should have). His problem was Immelt's saying just 2 to 3 weeks prior to the earnings announcement that GE's earnings were on track! This is either a huge deliberate attempt to mislead the stockholders or incompetence. In either case Immelt does have a large credibility problem.

I guess Mr.Immelt should be very careful in attempting to take any big bonus for himself & his trusty co-horts, .AFter all he has NOT performed in his duty to keep the share holders happy. I believe in
"performance" bonuses.Do the job, share the wealth, otherwise, "you're outtahere!"

When there is a melt down of anysort, there is always the formatin of slag, which must be spooned off.

Commando's are taught to never look at a persons head, when they are sneaking up on them from behind.
Keep your eyes below shoulder level before you slip the knife in.

CEO's must have similar training.

April 16, 2008: Jack Welch publicly blasts Jeff. Says Immelt has `credibility issue'.

April 18, 2008: Oh never mind. Jack Welch defends GE's Immelt.

So who has a credibility issue now?

amen,if you own ge stock immelt has been a toatl dud

Jack Welch should take his Six Sigma, young wife, and his opinions and do you know what. Jack Welch's last year, if I remember correctly, and I do since I had a rather large stake in GE, started going to hell his last year. The company was going downhill before Jeff took over. Also, one might also criticize Sir Jack for having picked the wrong successor, certainly not my choice. So Jack: "shut up."

agree 100% no one likes a bully

Bing-o! His arrongance, egoism and lack of judgement is mind boggling.

Santa Clara - are you aware of what has happened in the last 7 years? 9/11, Iraq/Afg, subprime, etc. Welch rode the equity wave of the 1990s my friend. Immelt's business environment has been much tougher than Welch's by a long shot. We're still paying out the nose for the 90s exuberance and ultimate fallout.

All Jack Welch was saying was "the king isn't wearing clothing" and he'd better put the clothing on.

Why are you advocating that Jack Welch be hush-hush? I think he speaks for the small investors many have lost opportunities while waiting for Imelt to perform. Now Imelt tells the investors one thing and weeks later can't deliver.

Perhaps you would like to see Imelt be given a raise?

John, Olean, New York

A 5 year chart on GE has the stock moving from $29 a share to about $40
a share as of October 2007. Today, its about $32 share. The move since October would seem to be in line with much of the market.

GE's value is hidden. Split the firm up and you will have best of breed business segments that won't be dragged down by GE Capital that's probably getting hammered in subprime mess and the Airline problems as well. But Imelt should have known about the numbers...tsk, tsk!!

GE stock has been a huge disappointment since 2000 and would still be if Jack was still there. Jack needs to move on in his own life and get over his own ego. If you read any of his notes at the back end of Business Week and you didn't know his background you would think his comments and observations were from someone who had virtually no business experience. He simply can't step away.

Peter in Massachusetts

P.S. I am a GE stockholder... still

I'm actually not suggesting that Jack Welch just shut up. I agree with you guys when you say, hey, he's a person, he has a right to his opinion, etc. I'm just, as always, feeling what it's like to be inside a company, everybody working as hard as he or she can... and then getting a bullet between the eyes from the guy who you respect and admire most in the world, the guy who has shaped your career, who, if he had any finer feelings, might whip you in private, not in public. That's just the way I feel... beyond that, the portrayal of Jack Welch as the spokesman of the little man makes me smile just a teeny bit. Not that he isn't, mind you. It just makes me smile.

Welch has the management style of a "Neanderthal" and is an egotistical fool. What a jerk! If you have nothing to contribute but criticism, then stay away. An empty barrel makes the most noise...

I heard the CNBC interview with Mr Welch. Your article is BS.

I really agree with the Brutus analogy. Jeff is just reaping what Jack sewed, and Jack is pummelling him for it. Jack did a great job on pulping out the company to maximize short term profits for himselF so that he could exercise his stock options and invest the proceeds in Tax-free municipal bonds. GE was making most of it's money on credit. GE should have been called a bank or investment firm not a manufacturing conglomerate. Not that lending is not a profitable, GE is suffering. Jeffrey Immelt is just left holding the bag.

It's the GE way to rip you in public and terminate the bottom 10% every year. They call it "good management practice." GE produces good professional managers but that does not necessarily equal good leaders. There is a significant difference.

I saw the whole CNBC show that morning. To be quite honest, I was shocked when I saw the articles later that day. Welch didn't appear negative to me over the whole show. This appears to be an instance of twisting words. Albeit, I was getting ready for work and CNBC was on in the background; but, I did not get a negative vibe from Welch. Though, Joe and Jack were getting "fresh" with one another at a point. My two thoughts.


GE does business with Iran. If that doesn't show poor judgement on so many levels, I don't know what does. Don't cut Immelt a break.

You know? I hear what some of you are saying now... that Jack Welch did NOT attack GE on that broadcast... which I did NOT see and only read about. You know what? I believe you, and hereby offer my apologies to Jack for believing what I read in the papers. I should know better. I was once at a breakfast when an executive I know was asked about a statement from a competitor about his company. "Well," said the executive, "I don't know. I think it's just a little bit unfair..." Then he went on to explain rationally why he felt that way. Within five minutes, the wires moved a story saying that the guy had "BLASTED" his competitor. I was there. He didn't BLAST anybody. But that's what journalists do these days. They want clicks. They want to move to the head of the electronic stack. So they exaggerate. And then everybody gets mad and a huge news cycle develops and then jerks like me pile on and get all irate and ruin Jack's lunch. Sorry, Jack. But it's been a great discussion, hasn't it? And also... one last thought... knowing what we know about the media and how it deals with things, shouldn't we all be very, very careful when we say stuff that's intended by funny and irreverent?

Can Jack sit back and take care of Jack. Who does he think he is God? His successful tenure at GE was made possible by the economic conditions at the time, not his Sigma-Six ass at the controls. If he thought he could help GE now why grandstand, just write a letter and sign it.....

Watching you sink my boat,


P.S. I never wanted to leave.

Is there - has there EVER been - a corporate CEO, President of the US, Leader of a movement, yadda, yada who has NOT had a disporpotionately high EGO? Methinks not. 'nuff said about Mr. Welch.

Apparently you didnt see the piece on CNBC. He wasnt bashing Immelt or GE.He was just acting like a frustrated father who was disappointed by his son. He bleeds GE and is a stand up guy.That was shown when he came on the air this morning to explain himself after the media distorted what he said.
Get your facts straight before you you do exactly what you were bashing Jack Welch for.


This cult of the CEO is sad. Jack is the very character of this cesspool of greed and self aggrandizement. GE with Jack at its helm was and is the poster child of "cut throat" business. No morals, just like his affair.

Jack is just like the rest of us, he owns stock in GE (far more then most of us) and is maybe a little put-out that it has dropped in value. Like Jack I 'll still get my pension check (a lot smaller then his) so supporting GE is our only goal.

Jack Welch is THE man!!

He had evry right to call Jeff Immelt out in public. Jack is only saying what other shareholders want to say. The company is losing money and that is not good. Jeff's feelings, character, and even his life are not of importance when money is at stake!

It doesn't matter if a company has 99 consecutive quarters of growth. If that 100th quarter produces dismal results, shareholders are going to call for someone's head. The CEO is always the first to take the blame. People shouldn't become CEOs to be praised or admired.

But Jeff shouldn't worry. All he has to do is come up with some generic plan to change things and go play golf. It doesn't matter if the company makes or loses money. All Jeff has to do is act likes he cares in public. If he gets canned, he will walk away with millions. Get fired and get paid; that is a win-win situation.

Remember The Golden Rule of Work: "The money made from the job is more important than the job itself." - © Yadgyu

Through the years comedians have used a phrase: "Don't touch me, I'm a star".

The connotation implies that some stars really believe that "bull****".

"Jack Welch" like "Lee Iococa" was in the right place at the right time--neither ever expressed any gratitude to their supporting staff; they want to be looked upon as industrial deities.

Keep the work-horses in the barn out of sight out of mind; because, "the show must go on". "Don't touch me, I'm a super star and I command big bucks".

Meanwhile, corporate coolies are stuck with cleaning up their mess.

"There's no ego like show ego I know". "The bigger you are the harder you fall"; and that my friends also makes good box office take!!!

Someone needs to whip someone. GE has a moral obilgation to be honest and on top of the information they give the world. I did not see that happening. GE stockholder

So... was Jack personally long or short GE? Long, eh?

Didn't sound like Mr. Welch "meglomaniac" to me.

Sounded like Mr. Welch "disgruntled shareholder." perhaps a bit justly irate at the disappearance of value in the part of the company he owns?

A disgruntled shareholder who... whether you like him or not... many believe was responsible once upon a time for sagely helping GE get things right?

Well. OK. Right... From a shareholder perspective.

Think anyone will listen to him? In the long run, I really hope so. Thomas Edison founded a great company.

But my bet is... not just yet.

I have long believed it was only a matter of time as to when GE would come under some scrutiny rather than being such a darling of the press and Wall Street. This company has become one of the largest non-bank banks in America, and our government has totally failed to recognize its role. And the press should be taken to task for not calling it on its "managing earnings" game which it is now finding tougher to play.

Watched him on both CNBC & Fox/wCavuto. Two different statements, which must mean two different people. Certainly says something for credibility! BH

You seem to miss the point. Two weeks before the end of the quarter he, Immelt, was reassuring the analysts about the quarter AND the year. You mean to tell me that Keith Sherin and Mike Neal did not know that the credit markets were tough until the end of March. If none of them knew this, they should ALL be fired for incompetence! If they did know, they should be fired for lack of integrity.
A lot of time is being spent in the BS of ecoimagination and marketing and the right spin and not enough on running the company. We need a strong operations CEO...a Bob Nardelli or a John Rice.

GE under Welsch was an impressive company by any standards. Mr Immelt is operating in a horrible financial environment. My only concern is did GE get involved in the subprime mess? If the answer is 'Yes' the investments could suddenly "like overnight" become worthless without Mr. Immelt's knowledge. After all it happened to
Merrill Lynch, Citygroup and Bear Stearns among others.

I have long believed it was only a matter of time as to when GE would come under some scrutiny rather than being such a darling of the press and Wall Street. This company has become one of the largest non-bank banks in America, and our government has totally failed to recognize its role. And the press should be taken to task for not calling it on its “managing earnings” game which it is now finding tougher to play.

Posted By Linda, Stamford, CT :

When it comes to Wall Street believe half of what you see and none of what you hear.

Press Hype is only the echo of what CEO's say. They unfortuantely are as trustworthy as used car salesmen.

G.E. didn't let you down, you let G.E. let you down.

Moral of the story: Jack was good for Jack:

and there are many similar stories to come before this recession is over.


I do not see it as a transformation. I think Jack Welch has finally shown his true colors.

jack, shut up!

Should split up GE into smaller companies..

GE made a profit of more then 4 billion while many companies are going under...I am holding onto my stock for the long run. They are still a great company.

I don't know Jack.

The way people are speaking you act like GE is Bears Stern. For the fact finders stating Welch road the wave of the 90's, Welch was with the company for over 40 years and was at the top CEO/Chairman I believe starting in 1984 (yeah those were good times!). I love the fact that people also bash him for his ego, but that is one of the things that helped make him so great at his job. He axed thousands of jobs because HIS JOB was to make GE as profitable as possible. It was not top make nice nice with the factory worker in podunk. He is one of the best CEO's ever because he made the hard decisions and did what he was supposed to do. And that was to make GE the most profitable company he could! That is why so many of you own GE stock. As well you can't hold him responsible for Immelt's actions for ever. His job to name his successor (that had to be approved by the rest of the board as well) was to give his opinion of who he thinks would do the best job. At the end of the day Jack got Jeff the shot to be CEO. what he does with it is on Jeff. This is such a hiccup in the big scheme of things for GE. As for the comment that GE does business with Iran, big deal so does the USA. We just don't hear about it. Do you really think that the US doesn't speak with Iran, N. Korea, etc? Don't kid yourself. If their is money to be made capitalists will be there! Including the biggest capitalists of all, the USA. Am i happy about it being a American? No, but i am a realist as well.

No need to feel sorry for Jeff. That's why they pay him the big bucks whether he performs or not. As a former employee of GE, it is no surprise that this day would come. A 6% SURPRISE!

Here’s a thought, maybe some brilliant GE HR person did their “Six Sigma” project pertaining to employees with between 15 & 20 years of service. Maybe there would be a cost savings in benefits to GE Corp. by getting rid or forcing out employees in this range. Not saying it happened; however, I’m still pondering the fact that nearly all of my prior performance reviews were EXCELLENT, but my two best sales years occurred in a slowed economy while being given my two worst performance reviews. Oh by the way, I had almost 18 years of “loyal” service in with GE. No one at GE stepped in on my behalf to say, “that’s okay, it’s a tough market.” Quite the contrary, the result of top talent leaving or being terminated has hurt GE over time and is no surprise to me. Running GE businesses into the ground and then selling them off hasn’t been working!

GE use to “Bring Good Things to Life,” and use to be the #1 Most Admired Company. GE can put whatever spin they want on this, and they always do, but they still turned in A 6% SURPRISE and also dropped down to the #3 Most Admired Company. During my GE days, I was a part of a regime that never seen such a surprise for over 100 straight quarters and again was #1. In my opinion, Immelt needs to step aside or put his real “IMAGINATION AT WORK” and start delivering on the GE stock!

as a GE employee, Jack's words sound valid to me as those of a concerned shareholder - fair but opinionated - he's clearly still a great GE fan, but you don't have Jack Welch on your show to toe the line and be bland.

To be at GE is to be accountable for your results - credit market morass and all...Jeff likely heard worse from Jack when he reported to him.

Also, it's clear Jeff has great communications counsel - no response seems the best response here - Bing, what would you have told Jeff to do/say here? Smile and nod?

Reiterating an earlier opinion... for GE, this may be prove the best thing that’s happened to the company in a long time. One has to wonder if a Tyco-style break-up can be resisted much longer and whether that wouldn't in fact be in the best interest of shareholders. So why not create a smaller industrial GE that would be among the best in class in most of the industries in which it competes with the likes of UTC, HON, Siemens?
Maintaining the AAA credit rating does not seem like a good enough reason to keep the company as one super-big, under-performing "bancoglomerate" with industrial holdings. Don't you think the shareholders of those competitors have been faring better in the last 6-7 years?
It sure seems like the edge GE used to enjoy has quickly turned into a liability in times of financial crisis, one that will require much change and re-calibrating of the portfolio, not just tweaks, to turn around.

The irony of the whole episode with Welch is that if Immelt had not wound down the insurance and other financial services businesses (which is what Welch really rode to glory, despite all the 6 sigma, etc., hype) GE could very well have reported a loss, given all the mark-to-market requirements in effect at the end of the quarter. My guess is that Immelt was counting on - supported by his lieutenants - the usual GE asset trading that goes on at quarter-end to deliver his by now famous forecast. Unfortunately for that whole crowd, the markets seized up in the last 2 weeks of the quarter and they had no seat when the music stopped! Actually, Immelt strikes me as a very decent sort of CEO whom I suspect many GE'ers are happy to be working for. Welch, on the other hand, fits with a long line of overrated GE CEOs who almost always had something "dirty" happen on their watch - whether it was price fixing equipment sales with Westinghouse to utilities in the 60s, cheating on expense reports turned in to the Defense Department, dumping mercury in the Hudson River (Welch really managed that one well, didn't he?) or any number of smaller infractions that they could always "smooth over" with some amazing reserve that got freed up or wondrous asset sale. That's one of the real advantages of being a big conglomerate.