The Legacy of Jack Welch
Jack Welch, son of a railroad conductor, former CEO of General Electric (GE), fly fisher, and “Manager of the Century,” has died, aged 84.
Investors will remember Jack Welch fondly. His steely style at the helm of General Electric through the 80s and 90s led the company’s stock price to rise an astounding 1,850%. That was enough to make the manufacturing conglomerate the most valuable enterprise in America, and secure Welch a seat in the business hall of fame.
He was a cost-cutter. No jibber-jabber. It’s estimated that over his twenty-year reign at GE, more than 300,000 employees were fired as part of a ruthless ‘rank and yank’ system, earning Welch the nickname “Neutron Jack” for his talent at eliminating employees while leaving the buildings still intact. At all times, ten per cent of the workforce stood to be done away with.
Companies like IBM, Microsoft, and even Amazon all employed similar “vitality curve” strategies. Welch-ism was management doctrine. However, the man died on the receiving end of more criticism than praise.
Following the dot-com bubble burst and GE’s stock price tumbling from all-time highs, Welch fled the scene with the biggest “thank you” severence payment in business history. There must have been a typo with the decimal place; 417-million-dollars!
His views on women in the workplace were also called “outdated” before his death, and of course, General Electric is up against the ropes today. The company probably wishes it had a time machine back to the 80s, short sold by 8% of the Invstr community today. RIP Neutron Jack!
