Jack Welch, the GE boss who became a superstar, died
BOSTON: Jack welch who transformed General Energy Co. in a highly profitable multinational conglomerate and turned its legendary business acumen into a retirement career as a corporate leadership guru, has died. He was 84 years old.
His death was confirmed Monday by GE. The cause of death was kidney failure, his wife Suzy told the New York Times.
Welch became one of the nation's best known and most prestigious corporate leaders during his two decades as president and chief executive officer of GE, from 1981 to 2001. He personified the so-called CEO cult during the late boom of the decade of 1990, when the rise in the price of GE shares made it the most valuable company in the world.
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A trained chemical engineer, Welch transformed the manufacturer of household appliances and light bulbs into a power of industrial and financial services. During his tenure, GE's revenues grew almost five times and the company's market capitalization increased 30 times.
Welch's results-oriented management approach and practical style were credited with helping GE take a financial turn, although part of the success came at the expense of thousands of employees who lost their jobs in Welch's tireless efforts to reduce costs and rid GE of profitability. Business
Commercial success and openness gave him great fame.
In 1999, Fortune magazine named Welch as its Manager of the century.
For his first book, Jack: Straight From the Gut, Welch received an advance of $ 7.1 million. Although launched the same morning of the attacks of September 11, 2001, the book became a bestseller and resulted in frequent talks in which he took his sincerity on stage.
From the day I joined GE until the day they appointed me CEO, 20 years later, my bosses warned me about my candor, Welch wrote in 'Straight from the Gut'. They labeled me as abrasive and I constantly warned that my openness would soon get in the way of my career ... and I tell them that it was openness that helped it work.
Welch did not slow down after leaving GE.
He became a senior advisor with private equity firm Clayton, Dubilier & Rice in 2001. He also taught a course on business leadership at MIT's Sloan School of Management in 2006. In 2009, Welch founded the Jack welch Management Institute, an online MBA program that is now part of Strayer University.
While Welch was known for being hypercompetitive, he also emphasized giving everyone a good shake.
In the 2005 book, Winning, Welch wrote that he would like to be remembered as a great defender of openness and meritocracy, and believing that everyone deserves a chance. And I would like to be remembered for trying to defend the case that you can never let yourself be a victim.
Along with Welch's fame came greater scrutiny. Welch found himself defending his retirement compensation. Amid a wave of corporate scandals, details of Welch's GE benefits emerged in court documents during his 2002 divorce from his 13-year-old wife, Jane Beasley. He received millions of dollars in benefits, including unlimited personal use of GE's airplanes, office space and financial services.
After the advantages were made public, Welch reimbursed the company for many of them and paid for the use of airplanes and other services.
Her first marriage, with Carolyn, ended amicably in divorce after 28 years in 1987. Plans for her second divorce were revealed shortly after Harvard Business Review editor Suzy Wetlaufer revealed that she had been romantically involved with Welch while I worked on a story about him.
Welch did not blame the media for the attention generated by the matter.
Christ, if he were a journalist, would write a scandalous story, Welch told CBS 60 Minutes in an interview in 2005. I mean, it's a good story, but I don't care. I fell in love.
Wetlaufer resigned from the Harvard publishing position in 2002 due to a furor caused by his relationship with Welch. In a January 2012 interview with Piers Morgan of CNN, when asked how he convinced Wetlaufer to marry him, Welch replied: My charm and probably my wallet.
We had a little scandal at the beginning, he continued. And they have been the 10 greatest years of our lives.
The couple wrote a regular column, called The Welch Way, in Business Week magazine for four years. They also wrote management books, including Win in 2005.
The Welches continued to write a regular column in 2012, this time for Reuters. They used the column to distribute advice for business and political figures, including Facebook CEO Mark Zuckerberg, and Republican presidential candidate Mitt Romney, whom they supported.
Welch was also active on Twitter, where he thought about everything from politics to business and sports, and had 1.4 million followers.
Some of those opinions generated controversy.
He questioned a monthly employment report in October 2012 that showed that the unemployment rate had fallen below 8% for the first time in three and a half years. The report came two days after President Barack Obama had performed poorly in his first debate with Romney and a month before the election.
Incredible work figures, he tweeted. These Chicago boys will do anything ... they can't debate to change the numbers.
Obama came from Chicago. While some Republican members of Congress echoed his views, his criticism was mostly ridiculed by economists and former Bush Administration Labor Department officials, who confirmed the accuracy of the data.
In his writings and speeches, Welch shared the wisdom he acquired in a GE career that began just after leaving graduate school. He quickly rose in rank and became the youngest president and CEO of the company in 1981, at age 45. Welch quickly shook GE, laying off tens of thousands of employees in its first five years. That earned him the unwanted nickname Neutron Jack, after the nuclear weapon that kills people but leaves the buildings largely intact. Welch bristled at the name and insisted that successful companies should be agile. Welch also stripped GE of billions of dollars in businesses that were not up to its mantra that they were numbers 1 or 2 in their markets. The first movements dismantled GE's bureaucracy and eliminated many layers of report relationships.
It's fast on the trigger, sometimes too fast, said Noel Tichy, author of a 1993 book on Welch and former leader of GE's training programs, in 2001. He will make sharp judgments. He is a human being who has tantrums.
With all that, I think he's the best business leader I've ever met, said Tichy.
And Welch freely acknowledged his mistakes. One was Calma, a computer design firm that GE bought in 1981. The company ended up losing $ 50 million annually until GE sold it in 1988.
Welch delayed his retirement for a last bold move, an offer of $ 41 billion to buy Honeywell International.
Welch predicted the government's easy approval for the largest acquisition GE had attempted, but European regulators rejected the deal as bad for competition.
In 1986, Welch made one of his boldest moves, an acquisition of RCA for $ 6.4 billion, including the NBC television network. The agreement energized GE, which made hundreds more acquisitions as the company aggressively moved to financial services, medical equipment and jet engines.
According to his supporters, one of Welch's greatest achievements is the talent that GE has created by awarding a bonus to developing leaders. Many former GE executives now lead Fortune 500 companies.
Among the leaders Welch prepared was his GE successor, Jeffrey Immelt. Welch has written that choosing his successor before the 2001 leadership transition was the most important and distressing decision he has ever made.
In April 2008, Immelt became the target of Welch's blunt talk when GE lost a quarterly earnings target, a month after Immelt promised investors that the company would meet its goals. The disappointment caused GE shares to fall almost 13% in a single day, which led Welch to say he would take out a gun and shoot Immelt if he allowed GE to fail the profit targets again.
After making the comment on CNBC, Welch returned to the GE-owned cable station the next day to give up his harsh conversation, saying: Nothing, nothing, nothing is as unpleasant for me as an old CEO screaming about how things are . as good under the new boy as they were for him.
Welch's detractors included environmentalists who bitterly criticized GE for its role in the contamination of the Hudson River in New York with cancer-causing PCBs.
Born on November 19, 1935, as the only son of an Irish working-class family in Salem, Massachusetts, Welch graduated from the University of Massachusetts-Amherst in 1957 with a degree in chemical engineering. He later earned a master's degree and a doctorate in chemical engineering from the University of Illinois, finishing in 1960.
Welch joined GE that year as a junior engineer in Pittsfield, Massachusetts.
It rose in range and turned GE's plastics business into one of the company's fastest growing business units. He became senior vice president in 1977 and vice president in 1979. In 1995, Welch suffered chest pains and underwent cardiac bypass surgery.
The reverse led to speculation that GE might be looking for a quick successor to Welch, but he remained at the helm for another six years.
Welch moved to Boston after his career at GE, living in a house in the Beacon Hill section of the city.
In his last years, Welch also devoted more time to passions like baseball, specifically to the Boston Red Sox.
He is survived by his third wife, Suzy Welch, and four children from his first marriage.