Meet Neutron Jack Welch

[Robert Weissman <rob@essential.org>]

Meet Neutron Jack Welch. He is the chief executive officer of General
Electric, the world's most valuable corporation. Perhaps America's most
ruthless manager, Welch puts profits above human and community concerns.
Over Neutron Jack's 17 years as CEO, the company's stock value has gained
1,115 percent in value.

Enter Thomas O'Boyle. O'Boyle, a former Wall Street Journal reporter and
current assistant managing editor at the Pittsburgh Post-Gazette, has
written a hard-hitting expose titled At Any Cost: Jack Welch, General
Electric and the Pursuit of Profit (Knopf, 1998), in which he raises the
question, Is profit and return on investment all we should care about? 

To which he answers, "Of course not." But this simple question, and
obvious answer, has shaken the business media out of its complacency. 

Roger Lowenstein, in reviewing the book in the New York Times Book Review
earlier this month, makes it clear that At Any Cost is "fatally out of
focus from the start."

And John A. Byrne, in a nasty and unfair review in Business Week, finds
that while O'Boyle has unearthed every shred of negative news on GE from
the past century, unfortunately "there isn't much muck to rake."  

These critiques line up well with GE's. 

O'Boyle "spent six years researching and writing a negative book and all
he found was a handful of former employees who supported his biased view,"
GE's Bruce Bunch told us. 

Actually, O'Boyle found much more than that, which is why GE's lawyers put
O'Boyle through the ringer during the writing of the book. 

"This was a very contentious project from the start," O'Boyle said. "GE
has made many complaints during the course of the writing of this book." 

O'Boyle told us that GE's lawyers "raised concerns that they had about the
project." 

"There was an implied threat of legal action," O'Boyle said. But he
refused to make public letters he received from GE's lawyers. 

When asked whether GE's lawyers contacted O'Boyle during the writing of
the book and raised concerns about it, GE's Bunch at first said "that's
not anything I would comment on, one way or the other." 

A day later, he called back and said that GE contacted the publisher
during the writing of the book because "we were concerned that the book
would be libelous or biased." 

"In no way did we want to do anything to prevent the book from being
published," he said. 

Why is GE so concerned about this book? Other books have been written
about Welch, but all give him glowing reviews. This is the first to link
Welch's policy's to the disastrous scandals that have struck the company
in recent years. 

Over 17 years as CEO, Welch eliminated hundreds of thousands of jobs,
bought and sold hundreds of businesses, and shifted the company's focus
from manufacturing to entertainment, O'Boyle reports. 

During the same period, the company was caught in a web of scandals
including defective refrigerators brought to market, industrial wastes
improperly buried, excessive radiation in the workplace, fraud in military
contract procurement, and the Kidder, Peabody financial disaster -- all
reported in detail in the book. 

O'Boyle writes that to many of the people who worked at General Electric,
"the connection between the severity of Welch's demands and the occurrence
of repeated scandal was a clear cause and effect, as transparent as
glass." 

GE's public recklessness is paralleled by a private recklessness that
O'Boyle details in a chapter on GE Plastics, the division where Welch
started his career. 

"Extravagance was a way of life at GE Plastics," O'Boyle reports. "Like
Welch's Phi Sigma Kappa college fraternity, which threw the wildest
parties at the University of Massachusetts, Jack's boys at Plastics were a
wild fraternity." 

According to O'Boyle, one attractive woman who interviewed for a job at GE
Plastics in 1973 recalls being asked: "Would you f--- a customer for a
million-dollar order?" The woman walked out of the interview. 

"Trashing hotels was considered being one of the boys, so was playing
demolition derby with rental cars," O'Boyle reports. "At the annual
meeting one year in Montreal, the German sales contingent heaved a grand
piano out the hotel window (fortunately, it was on the ground floor.)" 

When asked about the aggressive partying at GE Plastics, Bunch said "no
comment." 

When asked about the woman who walked out of the interview, Bunch said he
would not "dignify something like that with a comment." 

Welch refused to be interviewed for the book, but GE says that's because
O'Boyle intended to write a negative book from the start. 

For years, GE has told us they bring "good things to life." Now O'Boyle
has written a book that presents the dark underside of a premiere criminal
recidivist corporation. No wonder GE is upset. 

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor.

(c) Russell Mokhiber and Robert Weissman

Focus on the Corporation is a weekly column written by Russell Mokhiber
and Robert Weissman. Please feel free to forward the column to friends or
repost the column on other lists. If you would like to post the column on
a web site or publish it in print format, we ask that you first contact us
(russell@essential.org or rob@essential.org).

Focus on the Corporation is distributed to individuals on the listserve
corp-focus@essential.org. To subscribe to corp-focus, send an e-mail
message to listproc@essential.org with the following all in one line:

subscribe corp-focus <your name> (no period).

Focus on the Corporation columns are posted on the Multinational Monitor
web site <www.essential.org/monitor>.

Postings on corp-focus are limited to the columns. If you would like to
comment on the columns, send a message to russell@essential.org or
rob@essential.org.