1

Kaylah Walker
Business Gov
Report Analysis
February 17, 2016

Jack Welch at General Electric

Jon Francis, better known as Jack Welch Jr, became the executive officer of General
Electric in April 1981 and held that position for 20 years until he retired in April 2001. Some
people may say that Jack Welch was not a great chief executive officer during his career and
there are some people who say he was a great chief executive officer. During his time at general
electric he had turned the company from a solidly profitable manufacturing to an exceptionally
profitable conglomerate dominated by service businesses. A fawning BusinessWeek announced
him as Americas #1 Manager they stated that General Electric was the best-managed, best
regarded company in America. But not a lot of people saw General Electric as a company that is
cooperate socially responsible. A progressive magazine, known as, Multinational Monitor, made
an entire magazine called The Case Against GE. This magazine article labeled as a corporate
titan opposed to rules of society. They also stated that Jack Welchs actions were disastrous for
his workers and communities.
Majority of executives had come from a wealthy background, but Jack Welch was an
exception. He was born in 1935 to working-class Irish parents in a small town in Massachusetts.
His father was a railroad conductor who punched tickets on a commuter rail while his mother
was a dominating women who caused her husband to wilt but instilled a powerful drive in her

2
son. Welch attended Amherst in Massachusetts and went on to get his doctorate in chemical
engineering at the University of Illinois. After finally graduating he started working at a General
Electric plastics factory in 1960. After a year of of working there, he threatened to quit his job
because he got the same $1,000 as everyone else, but his boss persuades him to stay and as the
years went on his promotions started and he never questioned working there again.
As he became higher in his ranks, he became blunter, impatient with subordinates, and
emotionally volatile. When holding meetings, he would put his employers on the spot by telling
them his six-year-old could do a better job than then. With every promotion he made he would
size up his new staff and remove those who failed to impress him. Several times while working
at General Electric he got some mixed reviews for promotion, but because of perfect finances
results he was never blocked and by 1981 he took over as the CEO of one of Americas singular
companies. Welch believe that managers must confront reality and adapt to the world as it is,
not as they wish it to be. As he studied GEs situation in the early 1980s, he saw a corporation
that needed to change (Pg. 149). The wages of American workers were increasing while the
productivity was decreasing and even though though General Electric was still a very profitable
company their margins were shrinking. In the next five years, Welch decided to closed down 73
plants, selling 232 business, and eliminating 132,000 workers from their payroll. Within his
business he took away jobs through attrition, layoffs, and outsourcing. He then went and
downsized people in the General Electric bureaucracy, he said there were too many vice
presidents, too many lawyers, and too many staffs with authority to review and approve of
decision making. Another problem he said was the bureaucratic mentality in which headquarters
staff practiced a superficial congeniality that Welch interpreted as smiling to your face and
getting you behind your back (Pg. 149). He then went and took away the hierarchy by laying off

3
thousands of central staff in strategic planning, personnel, and other areas in that department.
When Welch took over General Electric there were 404,000 employees and when he left there
were 313,000 and in between that tens of thousands came and went. Union leaders had made an
estimate that in his 15 years of being a CEO, General Electric 150,000 jobs in the United States
though layoffs, subcontractings, and outsourcing to foreign countries.
For 35 years a few of General Electric manufacturing plants in New York infected the
Hudson river with polychlorinated biphenyls. The company followed their permits of release
levels and later stopped in 1977 when it was illegal to dumped polychlorinated biphenyl when
finding out it was toxic to humans and animals. Since the water was contaminated with toxicants
the fish were unsafe to eat for children or women of childbearing age to eat, the fishing industry
was demolished, and the chemicals were spreading downstream, 200 miles of the river to the
ocean. The Environment Protection Agency came to do some testing on the river to see if there
could be anything done to save the animals living in the water, they said that it would be
dredging the bottom had to be down so the toxicants would be removed but the only problem
would be being that it was going to be expensive. When Welch heard about this, he refused to do
anything about it and would spend any of his money or the companys money to fix the problem,
that his company eligibly made. After Welch retired, the company finally came up with a plan to
finally clean up the Hudson river.
After retiring, a guy named Jeffrey Immelt became the new CEO of General
Electric, he cleaned the Hudson River for about 1 billion dollars after Welch left but that did not
stop him from taking care of the environment. In 2002 a Catholic group filed a shareholders
proposal asking the company to measure its global warming gas emissions. It got only 20 percent
of the vote at the annual meeting, but Immelt ordered an inventory anyway, then, over objections

4
by subordinates who doubted global warming, pledged to cut GEs emissions. (Pg.156) After
four days of Immelt being the CEO of the company is when a terrorists attack on 911 accrued,
the jets were using General Electric engines, and hit the World Trade Center buildings in New
York. Insured by General Electric it led to a global recession and in late 2008 a global financial
crisis caused the stock market to fall.
During this case study they talked about how Welch was a good CEO and how he was not
that great at what he did. Looking at both sides I would say that Welch was not corporate social
responsible only because of his decisions he had made during his time working for General
Electric with his employees and the environment. While reading the case study and seeing what
the union came up with how many jobs were eliminated from the corporation was about 150,000.
Which is a lot for someone to cut down on jobs for only working as the CEO for 15 years. When
finding out that his company was the reason why the Hudson river was contaminated he refused
to pay for any of the damages he had caused. Even though he was still following the rules and
only dumping so much at a time, he could have helped or fundraised something to help initiate a
clean up for the river. When Immelt came and took over in Welchs position he took the liberty
of cleaning up the entire mess even though he was not in charge while doing it, his love and
passion for the environment really did show while working as the CEO. He even took a test of
his emissions even when the Catholic group only got 20%. During Welchs time there he was
very hostile to his employees and during meetings he would embarrass them. If something was
not being done the way, he would like or in the time he would like it done he would say to them
that his child could do a better job then them. By saying this to your employees you are bringing
them down and they will stop working to their full potential. Even though Welch later created a
work shop for his employees, making it so they could say anything they wanted to their

5
managers and how they feel about their work environment, insulating your employees is
something you just shouldnt do. Even though he made General Electric very profitable while
working there and Immelt not so much, Welch could of handle things better than he did while
working there.
Jack Welch was CEO General Electric for 20 years before retiring. He made the company
very profitable but at the same time he was not corporate social responsible while being the CEO
and could have handle things in a socially responsible way. I would have to agree with
Multinational Monitor and how he was titan like and opposed to rules and did not treat his
workers and community with respect that they deserved.