Jack Welch facts for kids
Quick facts for kids
Jack Welch
|
|
|---|---|
Welch in 2012
|
|
| Born |
John Francis Welch Jr.
November 19, 1935 Peabody, Massachusetts, U.S.
|
| Died | March 1, 2020 (aged 84) New York City, New York, U.S.
|
| Alma mater | University of Massachusetts Amherst (BS) University of Illinois at Urbana–Champaign (MS, PhD) |
| Occupation |
|
| Title | Chairman & CEO of General Electric (1981–2001) |
| Political party | Republican |
| Spouse(s) |
Carolyn B. Osburn
(m. 1959; div. 1987)Jane Beasley
(m. 1989; div. 2003)Suzy Wetlaufer
(m. 2004) |
| Children | 4 |
John Francis Welch Jr. (born November 19, 1935 – died March 1, 2020), known as Jack Welch, was an American business leader, a chemical engineer (someone who designs and manages processes that change raw materials into useful products), and a writer. He was the Chairman and CEO of General Electric (GE) from 1981 to 2001.
When Welch retired from GE, he received a large payment of $417 million. This was the biggest payment of its kind in business history at that time. By 2006, his total wealth was estimated to be around $720 million.
Contents
Early Life and Education
Jack Welch was born in Peabody, Massachusetts. He was the only child of Grace, a homemaker, and John Francis Welch Sr., a railroad conductor. His family was Irish American and Catholic.
As a young person, Jack worked many summer jobs. He was a golf caddie, delivered newspapers, sold shoes, and operated a drill press. He went to Salem High School. There, he played baseball and football, and was the captain of the hockey team.
After high school, Welch went to the University of Massachusetts Amherst. He studied chemical engineering there. During his college summers, he worked for chemical companies like Sunoco and PPG Industries. In 1957, he earned his bachelor's degree. He then went on to graduate school at the University of Illinois at Urbana-Champaign. He earned his master's degree and a PhD in chemical engineering in 1960.
Leading General Electric
Welch started working at General Electric (GE) in 1960 as a junior chemical engineer. He earned $10,500 a year, which would be about $106,000 today. In 1961, he almost quit because he felt the company had too much bureaucracy (too many rules and slow processes). However, a GE executive convinced him to stay, promising to help create a smaller, more flexible work environment. In 1963, there was an explosion at a factory he managed, and he was almost fired.
By 1968, Welch became a vice president, leading GE's plastics division. He oversaw the making and selling of plastics like Lexan. By 1979, he was the vice chairman of GE.
In 1981, Welch became GE's youngest chairman and CEO. He wanted GE to be the best or second best in every industry it was in.
Welch as CEO
Throughout the 1980s, Welch worked to make GE more efficient. He helped GE's market value (how much the company is worth) grow from $12 billion in 1981 to $410 billion when he retired. He did this by buying around 600 other companies and moving into new markets.
Welch wanted to make GE feel like a small company, even though it was huge. He tried to get rid of slow processes and cut down on extra inventory. He closed factories, reduced the number of employees, and sold off parts of the business that weren't doing well.
Welch was known for making surprise visits to GE's offices and factories. He also made popular a policy called "rank and yank." Each year, he would let go of the bottom 10% of his managers. He rewarded the top 20% with bonuses and employee stock options (the right to buy company stock at a set price). He also made stock options available to many more employees, not just top executives. Welch also got rid of many layers of management, making the company less formal.
In the early 1980s, people called him "Neutron Jack." This nickname came from the neutron bomb, which destroys people but leaves buildings. It meant he cut many jobs but kept the company's structure. In his book, Welch said GE had 411,000 employees in 1980 and 299,000 in 1985. This reduction helped GE's market value grow a lot.
In 1986, GE bought RCA, a big media company. GE kept NBC, a TV network, but sold off other RCA parts. In the 1990s, Welch shifted GE more towards financial services (like banking and loans) instead of just manufacturing.
In 1995, Welch adopted the Six Sigma quality program, which helps companies improve their products and processes. GE's revenues grew from about $26.8 billion in 1980 to nearly $130 billion in 2000, the year before he left. In 1999, Fortune magazine named him "Manager of the Century."
Welch believed that people were GE's most important asset. He spent a lot of time planning who would take over after him. Jeff Immelt was eventually chosen to succeed him as CEO.
Challenges and Criticisms
When Welch retired, he said his success would be judged by how GE performed after he left. Twenty years later, GE's market value was much lower. Welch didn't want to talk much about this decline.
Some critics felt that GE's stock price was too high under Welch because of the growth in financial services. They also pointed out that GE later sold off some of the big companies Welch had acquired.
Under Welch's leadership, GE had a long dispute with environmental agencies. This was about polychlorinated biphenyls (PCBs), chemicals that GE had put into the Hudson River. These chemicals made the water unsafe. Welch also disagreed with scientists who said PCBs were harmful. He also called efforts to address climate change "radical behavior." However, he also said businesses should use "green products" because people want them.
Some critics wondered if the pressure Welch put on employees to perform might have led to problems or "cutting corners" in some areas.
Welch also faced criticism for his views on the middle class and working class. He disagreed with rules about how much CEOs should be paid. He believed CEO pay should be decided by the "free market" without government interference.
His income and benefits became a public topic during his divorce from his second wife in 2001. Court documents showed details of his retirement package from GE. This package included things like an apartment in New York, baseball tickets, and the use of a private jet and car. Welch said he had filed this agreement with the SEC and later gave up these benefits because of public criticism.
In 2012, Welch and his third wife, Suzy, stopped writing for Fortune magazine and Reuters. This happened after Fortune published an article that criticized Welch's tweet about the 2012 election job numbers.
Later Career
After retiring from GE, Welch became an advisor to a private investment firm and to the CEO of IAC, a media company. He also gave many public speeches and wrote a popular column for BusinessWeek with his wife, Suzy.
In 2005, he published a book called Winning with Suzy Welch. It was a bestseller about management.
In 2006, Sacred Heart University named its College of Business after him, calling it the "Jack Welch College of Business." He also taught a class on leadership at the MIT Sloan School of Management.
In 2016, Welch joined a business group that advised then president-elect Donald Trump on economic issues.
Jack Welch Management Institute
In 2009, Welch started the Jack Welch Management Institute (JWMI). This program offers an online executive Master of Business Administration (MBA) degree. It was later acquired by Strayer University in 2011. Welch was very involved with the program, helping with the lessons, teachers, and students.
The JWMI's MBA program has been recognized as a top online MBA program by The Princeton Review for several years. Welch was known for teaching and developing leaders at GE. He taught at MIT and led seminars for CEOs around the world. Many top company CEOs today were trained by Jack Welch.
Students at JWMI had direct access to Welch. He held video calls with them every three months and answered their emails and messages. He cared a lot about student satisfaction and constantly looked for ways to improve the program.
Personal Life
Welch had four children with his first wife, Carolyn. They divorced in 1987 after 28 years of marriage. His second wife, Jane Beasley, was a lawyer. They married in 1989 and divorced in 2003.
His third wife was Suzy Wetlaufer, who co-wrote his 2005 book Winning. They married in 2004.
Death
Jack Welch passed away from kidney failure at his home in New York City on March 1, 2020. He was 84 years old.
Politics
Welch was a Republican. He once said that global warming was an "attack on capitalism" and a form of "mass neurosis." However, he also believed that businesses must offer "green products" because people want them.
Regarding "shareholder value" (the idea that a company's main goal is to make money for its owners), Welch said it was "the dumbest idea in the world." He believed that a company's main focus should be its employees, customers, and products, and that shareholder value would then be a result of that focus.
Welch was criticized for a tweet he made in 2012 about job numbers. After the government reported that the unemployment rate had dropped, Welch tweeted that the numbers might have been changed. He later said he meant to ask a question about the numbers. No proof of manipulation was ever found.
Legacy
Jack Welch has been called "perhaps the most celebrated American boss of recent decades."
Some business experts say that Welch's ideas, like breaking down barriers between different parts of a company, still work today.
However, Welch has also been criticized for practices that some say harmed workers and companies. He cut thousands of jobs at GE and started the practice of letting go of 10% of employees each year, which other companies adopted. He also pushed for many mergers and acquisitions (when companies combine), which some say made the economy less competitive. He also shifted GE into being more like a bank, which some believe hurt the company in the long run.
In late 2021, General Electric announced plans to split into three separate public companies. This means the original GE, as it was known, will effectively no longer exist.
Wider Impact
Author David Gelles wrote in 2022 that Welch's business practices caused widespread damage to corporate America.
Popular Culture
In 2010, Jack Welch appeared as himself in an episode of the TV show 30 Rock. In the episode, he talked about the sale of NBC Universal, which was a funny reference to a real-life event where GE sold NBC Universal to Comcast.
Books by Jack Welch
- Welch, Jack and John A. Byrne. Jack: Straight from the Gut. New York: Warner Business Books, 2001. ISBN: 0-446-69068-6
- Welch, Jack and Suzy Welch. Winning. HarperCollins, 2005. ISBN: 0-06-075394-3
See also
In Spanish: Jack Welch para niños
- Vitality curve
