Jack Welch, the champion of corporate efficiency who built General Electric (GE) into one of the world’s largest firms and influenced generations of business leaders, has died. He was 84.
The former GE chairman and chief executive officer, whose blunt style and ceaseless cost cutting earned him the sobriquet “Neutron Jack,” mentored proteges who went on to run some of the world’s best-known companies. Named “Manager of the Century” by Fortune magazine in 1999, he presided over a stock surge of almost 3,000 per cent during a two-decade tenure before his legacy was dented in retirement by GE’s share plunge.
“He became the gold standard of greatness, the icon of industrial imagination,” said Jeffrey Sonnenfeld, a Yale University business professor who knew Welch since the 1980s. “His track record over those 20 years as CEO is hard to see excelled anywhere.” Known simply as Jack to even low-level employees, Welch became the youngest CEO in GE’s history in 1981.
He created a leaner company, yet one whose dependence on finance would eventually prove to be a threat. Along the way, he molded GE’s culture to reflect his demanding personality, one larger than his 5-foot-7-inch (1.7-meter) frame.
“I like challenging people. I like debate. I like all those things,” he told interviewer Charlie Rose less than two months after his 2001 retirement. “And yet I love having a drink with ‘em, too.”
Welch stepped down four days before the September 11 terrorist attacks. He remained active for more than a decade as a consultant and media commentator. Business leaders extolled his ability to boost profit and shareholder wealth with his restless, results-driven approach. GE became the world’s biggest company by market value at more than $500 billion in 1999.
Imitators across corporate America copied his leadership strategies, and recruiters snapped up lieutenants including W James McNerney Jr, who later became Boeing Co’s CEO, and Robert Nardelli, who ran Home Depot Inc. and Chrysler. Another GE executive, Jeffrey Immelt, would best them to succeed Welch.
Welch’s legacy took a blow after he retired. The shares would lag behind the pre-September 11 level for virtually all of Immelt’s 16 years as CEO. GE lost more than $200 billion in market value in a two-year stretch ending December 31, 2018. The company’s latest CEO, Larry Culp, has overseen a partial comeback. GE Capital under Welch grew so vast that unit’s struggles in the 2008-2009 financial crisis would imperil all of GE. The company has since exited nearly all of the lending businesses.
Growing up in Massachusetts, he was outspoken and athletic. He played golf, hockey, and baseball at Salem High School, where he was voted “most talkative and noisiest” boy by classmates and wrote in the school literary magazine that he wanted to “make a million.” Welch’s mother infused him with self-confidence and helped him overcome a boyhood stutter — “the most influential person in my life,” he wrote in his autobiography Jack: Straight From the Gut.
After a close hockey defeat as a youngster, Welch flung his stick across the ice, prompting his mother to march into the locker room, grab him by the jersey and shout: “You punk! If you don’t know how to lose, you’ll never know how to win.” ‘Tremendous passion’
Welch knew thousands of employees by name and would send handwritten notes to them. “He had tremendous passion for the business, but he also had tremendous passion for people,” William Conaty, whose 40-year GE career included serving as human resources chief under Welch, said in a 2014 interview. “If your wife was sick, he’d want to know how she was doing.”
Welch also worked six days a week, taking only Sunday off to golf — he called working weekends “a blast” — and expected similar dedication from those who wanted to get ahead. “I never once asked anyone, ‘Is there someplace you would rather be — or need to be — for your family or favourite hobby or whatever?”’ he said in his 2005 book, Winning.