Monday, March 02, 2020

Father of corporate book cooking! Neutron-Bomb Welch

Jack Welch, head of GE Plastics that polluted Pittsfield MA and the Housatonic River, acceeded to the throne of once-solid General Electric.  Through his gentle ministrations he turned the company into a graveyard, driving Schenectady, NY from a middle class heaven into a rust-encrusted hellhole.  Jack's financial acumen provided for monotonically increasing stock prices through his tenure.  He did this through financial manipulation that would have landed lesser mortals in jail for securities fraud.  Upon the sale of the General Electric Reinsurance (GE Re) to Swiss Re, Jack's fraud was uncovered to the tune of $19.2BB.  This, however, didn't affect St. Jack, who had moved on and left Jeff Immelt to hold the bag.  In the financial crisis of 2008, GE Capital's "investments" into derivatives imploded and GE was within one day of failing to meet payroll and default on many obligations.  Jack's good friend, Warren Buffet, however, came along with $5BB in cash, and saved the company for a slight premium.
Jack was known as a sharp negotiator and a master of project management and contracts.  His marriage failed one month after his wife of many years became "vested" in the pre-nuptual agreement.   Welch demanded full commitment and high levels of performance from his employees.  He trained all in the religion of Six Sigma, all the better to remove "waste" and "unnecessary costs" from GE products.  He also trained all managers in "ethics" as a means for them to know and understand the limits of ethical behaviour, to know where the gray zone was in relation to those limits, and then to be able to "cluelessly" operate beyond the gray zone limits.
He is survived by countless GE customers who cheer the ongoing demise of the company, by arrogant former employees and managers who remain unemloyeed due to their catchphrase "this is how we did it at GE", and by many retirees doomed to eat catfood since their no-decision investment in GE stock has left them in penury.

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