Jack Welch, the former chairman and CEO of General Electric, whose business prowess catapulted the company to the most valuable in the world and made him a household name, has died, his wife announced Monday.
He was 84.
“More than anything else — leader, business icon, management genius — more than those things, although they are all true too — Jack was a life force made of love,” Welch’s wife, Suzy, said in a statement released to CNBC.
“And somehow, crazily somehow, he also managed to be the greatest husband and step-father who ever lived, giving our family twenty amazing years of adventure, happiness, and joy. Our hearts, so much larger and fuller having known and loved him, are broken,” her statement said.
Welch, a railroad conductor’s son born in Massachusetts, began at GE as a chemical engineer in 1960. He almost left the company, frustrated that GE was bloated at the top while he felt underpaid and undervalued.
But he stayed, rising to become the company’s youngest vice president in 1972 and vice chairman seven years after that. In 1981, he also became the youngest chairman and CEO of GE, at the age of 45.
In leadership, Welch had the chance to address the problems he saw when he first began at GE.
As CEO, he ripped into 300 separate businesses that GE was built around and oversaw nearly 120,000 layoffs, earning him the nickname “Neutron Jack.”
Some viewed the controversial CEO as abrasive, while others applauded him for his profitable management decisions. Welch grew GE’s market value 40-fold, to $500 million, during his 20-year tenure, eventually making GE the world’s most valuable company, after Microsoft.
Welch “reshaped the face of our company and the business world,” GE Chairman and CEO H. Lawrence Culp, Jr., said in a statement Monday. “And we’ll continue to honor his legacy by doing exactly what Jack would want us to do: win.”
“By 1985, billions of dollars had been made or saved through sales and layoffs,” Welch’s biography said. He then sought to reinvest the savings in solid takeovers.
In 1985, GE bought RCA, the then-owner of NBC, for nearly $6.3 billion — the largest merger of its kind in American business history. Three years later, half of RCA’s pre-merger employees were gone, along with the majority of its businesses. Only NBC and RCA’s defense businesses remained by the end of the decade. NBCUniversal is the parent company of NBC News.
“There’s a lot of ways to measure success, and he ticks a lot of the boxes,” Lloyd Blankfein, the former chief executive of Goldman Sachs, which worked as GE’s bank, told NBC News. “But the most important one, and the telling one to me, is the number of really successful people who feel they owe their success to their relationship with Jack. The leverage you get from developing and promoting great people lasts beyond yourself.”
“GE, and his era, was to industrial people what Procter & Gamble was to marketing and Goldman Sachs is to finance in terms of putting people into the world,” Blankfein said.
Known for giving latitude to individual bosses, he also expected big results — and was cut-throat when managers did not live up to expectations.
Welch was not only known for slashing jobs, though. While bottom performers, known as “lemons” were often let go, Welch strongly believed that top performers deserved top pay and bonuses.
“Control your destiny, or someone else will,” Welch was known to say.
He also brought an “informality” to the massive company, personally reviewing everyone who worked for him, and sending faxes and handwritten notes to employees in all levels of the company whom he felt deserved praise.
As a result of his approachability, Welch, whose first name was John, became known as everyone in the company as “Jack.”
The public knew the CEO as “Jack” too.
Fortune magazine named him the “manager of the century” in 1999. “Having been handed one of the treasures of American enterprise, he said, he was ‘afraid of breaking it.’ Not only did Welch not break it, but he transformed it as well and multiplied its value beyond anyone’s expectations,” Fortune editorial director Geoffrey Colvin wrote.
Welch retired from GE in September 2001, just before 9/11. At the time, The New York Times heavily lauded his accomplishments at the company. He left with what is widely reported to have been the largest severance package in corporate history, at $417 million.
Welch later became a business consultant and often appeared on television in addition to publishing columns and his book, “Jack: Straight from the Gut,” in which he explained his business tactics and credited the influence of his Irish mother. He also wrote “Winning,” with his third wife, Suzy, whom he married after she interviewed him for the Harvard Business Review.
He had four children with his first wife, Carolyn Osburn, and filed for divorce from his second wife, Jane Beasley Welch, after meeting Suzy.
The former CEO even appeared as himself on on NBC’s “30 Rock,” the comedy parodying the goings-on in the halls of the building that houses NBC and its then-parent company General Electric.
Welch was a vocal Republican, who once took to Twitter to accuse President Barack Obama’s team of manipulating employment data before the 2012 presidential election.
President Donald Trump offered his condolences in a tweet Monday, calling Welch a “friend.” “There was no corporate leader like ‘neutron’ Jack,” Trump wrote. “He was my friend and supporter. We made wonderful deals together. He will never be forgotten. My warmest sympathies to his wonderful wife & family!”
Welch’s chosen successor, Jeffrey Immelt, was met with challenges including the dot-com bust, the aftermath of 9/11 and the Great Recession. GE sold its remaining stake in NBCUniversal to Comcast in 2013.
Immelt resigned in 2017. John Flannery replaced him, lasting a little more than a year, following GE’s removal from the Dow Jones Industrial Average after 110 years. Culp took over as CEO in October 2018.
GE’s market capitalization was $98 billion Monday, far outpaced these days by the technology sector, where Apple has a market capitalization of $1.25 trillion.
“Jack was larger than life and the heart of GE for half a century,” Culp’s statement said. “When I last saw him, what I remember most vividly was when he asked me, ‘So how exactly are you running the company?’ Jack was still in it — committed to GE’s success. And to have Jack Welch ask me how I am running GE is pretty humbling.”