Known for his focus on efficiency and streamlining management, he would regularly cull the lowest-performing 10% of staff each year. "The underperformers generally had to go," he wrote in one of his books.To me Jack Welch and his General Electric always epitomized everything that was wrong with American business in the 1980s and 1990s. He had a maniacal focus on the bottom line that made stockholders rich while discarding employees like empty soda cans. Here are two evaluations:
Under him, GE’s market value grew from $12 billion to $410 billion, making Welch one of the most iconic corporate leaders of his era. . . .One of Welch's bizarre pronouncements was that every GE division had to be among the top two in the world for its sector; otherwise it would be closed or sold. This led to the company shedding profitable divisions because they didn't conform to his rigid mandate, a perfect case of arbitrary corporate policy harming actual human lives.
The U.S. industrial belt is dotted with communities devastated by the downsizing of GE, which began under Welch and has continued in the years after. At its peak, for instance, GE employed 30,000 at a sprawling integrated industrial plant in Schenectady, New York, that now employs fewer than 3,000.
Not that Jack Welch ever showed any concern for actual human lives.
The most spectacular thing Welch did was to make GE a finance company, expanding its GE Capital arm until it became nearly half the company. Financially that made sense at the time, because in the 1980s and 1990s finance was where the money was. GE's manufacturing arms were being battered by Japanese and then Korean competition, but on Wall Street it was raking in the cash.
Not that it lasted; GE Capital crashed badly in 2008, requiring a Federal bailout and dragging the company down with it. The value of the corporation fell from $410 billion to $75 billion, and it is now valued at about $105 billion.
Jack Welch's GE is a perfect case study of what went wrong with America in the neoliberal era, and of why so many people on both the right and the left are angry about our direction.