Former General Electric CEO Jack Welch has died at the age of 84. He was considered by many to be a business guru. Picture: AP Photo/Elise Amendola
Former General Electric CEO Jack Welch has died at the age of 84. He was considered by many to be a business guru. Picture: AP Photo/Elise Amendola

Business legend dead at 84

Jack Welch, who transformed General Electric Co. into a highly profitable multinational conglomerate and parlayed his legendary business acumen into a retirement career as a corporate leadership guru, has died. He was 84.

His death was confirmed on Monday, local time, by GE.

The cause of death was renal failure, his wife Suzy told The New York Times.

Welch became one of America's most well-known and highly regarded corporate leaders during his two decades as GE's chairman and chief executive, from 1981 to 2001.

He personified the so-called "cult of the CEO" during the late-1990s boom, when GE's soaring stock price made it the most valuable company in the world.

 

 

A chemical engineer by training, Welch transformed the company from a maker of appliances and light bulbs into an industrial and financial services powerhouse.

During his tenure, GE's revenue grew nearly fivefold, and the firm's market capitalisation increased 30-fold.

Welch's results-driven management approach and hands-on style were credited with helping GE turn a financial corner, although some of the success came at the expense of thousands of employees who lost their jobs in Welch's relentless efforts to cut costs and rid GE of unprofitable businesses.

Business success and outspokenness brought him wide fame.

In 1999, Fortune magazine named Welch as its "Manager of the Century."

For his first book, Jack: Straight From the Gut, Welch received a $US7.1 million $A10.85 million) advance. Although released on the very morning of the Sept. 11, 2001 attacks, the book became a bestseller, and led to frequent speaking engagements where he took his candour on stage.

"From the day I joined GE to the day I was named CEO, 20 years later, my bosses cautioned me about my candour," Welch wrote. "I was labelled abrasive and consistently warned my candour would soon get in the way of my career … and I'm telling you that it was candour that helped make it work."

Former Chairman and CEO of General Electric Jack Welch transformed GE into a highly profitable multinational conglomerate. Picture: AP Photo/Richard Drew, File
Former Chairman and CEO of General Electric Jack Welch transformed GE into a highly profitable multinational conglomerate. Picture: AP Photo/Richard Drew, File

While Welch was known for being hypercompetitive, he also stressed giving everyone a fair shake.

In the 2005 book, Winning, Welch wrote that he would like to be remembered "as a huge advocate of candour and meritocracy, and believing everyone deserves a chance. And I'd like to be remembered for trying to make the case that you can never let yourself be a victim." Along with Welch's fame came greater scrutiny.

Welch found himself defending his retirement compensation. Amid a wave of corporate scandals, details of Welch's GE perks emerged in court papers during his 2002 divorce from his wife of 13 years, Jane Beasley.

He received millions of dollars in benefits, including unlimited personal use of GE's planes, office space and financial services.

After the perks became public, Welch reimbursed the company for many of them, and paid for use of aircraft and other services.

His first marriage, to Carolyn, ended amicably in divorce after 28 years in 1987.

Plans for his second divorce were disclosed shortly after Harvard Business Review editor Suzy Wetlaufer revealed she had become romantically involved with Welch while working on a story about him.

Welch didn't blame the media for the attention the affair generated. "Christ, if I was a journalist, I'd write a scandalous story," Welch told the CBS television news magazine 60 Minutes in a 2005 interview.

"I mean, it's a good story, but I don't care. I fell in love."

In his writing and speaking, Welch shared the wisdom he gained in a GE career that began right after he left post-graduate studies. He quickly climbed the ranks, and became the company's youngest chairman and CEO in 1981, at age 45.

Welch quickly shook up GE, laying off tens of thousands of employees in his first five years. That earned him the unwanted nickname "Neutron Jack," after the nuclear weapon that kills people but leaves buildings largely intact.

Welch bristled at the name, insisting that successful companies needed to be agile. Welch also divested GE of billions of dollars in businesses that didn't live up to his mantra that they be No. 1 or 2 in their markets.

 

Images of Jack Welch appear on screens above trading posts on the floor of the New York Stock Exchange, Monday, March 2, 2020. Picture: AP Photo/Richard Drew
Images of Jack Welch appear on screens above trading posts on the floor of the New York Stock Exchange, Monday, March 2, 2020. Picture: AP Photo/Richard Drew

The early moves dismantled GE's bureaucracy and eliminated many layers of reporting relationships.

Welch delayed his retirement for one last bold move, a $US41 billion ($A62.67) bid to buy Honeywell International.

Welch predicted easy government approval for the largest acquisition GE had ever attempted, but European regulators rejected the deal as bad for competition.

In 1986, Welch made one of his boldest moves, a $US6.4 billion ($A9.78 billion) acquisition of RCA, including the NBC television network.

The deal energised GE, which made hundreds more acquisitions as the company moved aggressively into financial services, medical equipment and jet engines.

 

 

One of Welch's greatest accomplishments, his supporters say, is the talent GE has created by placing a premium on developing leaders. Many former GE executives now lead Fortune 500 companies.

Born Nov. 19, 1935, as the only child of an Irish working-class family in Salem, Massachusetts, Welch graduated from the University of Massachusetts-Amherst in 1957 with a bachelor's degree in chemical engineering.

He later obtained master's and doctoral degrees in chemical engineering from the University of Illinois, finishing in 1960.

Welch joined GE that year as a junior engineer in Pittsfield, Mass. He rose through the ranks, and built GE's plastics business into one of the company's fastest growing business units.

He became a senior vice president in 1977, and vice chairman in 1979.

In 1995, Welch suffered chest pains and underwent heart bypass surgery, but he remained at the helm another six years.

He is survived by his third wife, Suzy Welch, and four children from his first marriage.