20 Great Interviews: Jack Welch
Jack Welch is arguably the most famous CEO in the world. During his 20-year reign as the head of General Electric the company’s market value grew from $13 billion to $500 billion. During our interview in the GE building, in October, 2001, Welch is by turns beguiling, sentimental and impatient. His parting gift to me is a copy of the Financial Times (if I knew more about business, I would more readily understand his philosophy!).
The final deal of Welch’s tenure as CEO fell through because of the European Commission’s antitrust ruling on the GE/Honeywell merger. He bears no animosity, he says. “Business is a game — if you are not tough enough, don’t weep on the sidelines. Go and find a game that you are good at.”
You’ve been called the toughest boss in America. Would you agree with that?
I’d like to call it tough-minded. Then I can’t argue one way or the other. The facts are that I was the first one to do what we had to do as a country. There’s 100,000 people being laid off in dot-corns — being laid off in industry after industry after industry. You don’t see big announcements from GE.
The practice of getting rid of the bottom ten percent. It sort of worries me a little bit.
Go ahead, let it worry you. It doesn’t bother me, because they’ll go to work for some other place where they’ll be happier. Companies don’t give job security, only satisfied customers do. If you don’t have customers, then you don’t have income.
In your book you credit your mother with instilling this drive in you.
Well, she was a smart, into-everything woman who I was born late in life to. I was an only child. She was my best friend. So if things didn’t go right I’d talk to her about them, talk to her about my girlfriends, talk to her about everything. She was my buddy, my manager, my critic. She was everything. She taught me to play to win, but know how to lose. Although she was never short of whacking me one if she thought I was too strict with my own kids or something. She was always right there. She was fantastic.
Where did your mother’s desire to see you succeed come from?
Well, she had a lot of brothers and a couple of them drank too much and were always getting in trouble. She had to sneak some of my father’s money to get them out of trouble. I don’t know where it [the drive] came from. My father was first-generation but my mother had been here a while. Her great-great-grandmother came here in 1810 or something. I wonder why my mother didn’t do better in school. I wonder why she and her family didn’t progress further. They’d been here like three generations. And she was the smartest one in the area.
She was third-generation, but she still seemed Irish to you.
Totally Irish. And she always said there were only two kinds of people, those who are Irish and those who wish they were Irish. I mean, it was bred into my toes.
Do you think that Ireland will manage to hang on to the Celtic Tiger?
Ireland’s going to have to have more of an entrepreneurial outlook. Ireland is now a HAVE versus twenty-five years ago a HAVE NOT. That means jobs will migrate from Ireland while Ireland’s intellect will have to improve. Ireland will have to start a lot of its own businesses. When I was there I read that Gateway was moving out of Ireland, too high cost. Well, that’s what happens when you win, you get to be a HAVE, the jobs get to be expensive. Unemployment comes.
What would you say to these people out in Seattle and elsewhere who are protesting globalization?
I don’t know what I’d say to them because the only ones that make any sense to me are the labor unions in the developed countries. If I’m a labor union in America, I’m concerned I’m going to lose some jobs. If I’m an environmentalist, though, I know that if the good companies of the world go to the undeveloped areas, they’ll improve the environment. Now, you can use statistics any way you want, and say the rich have gotten richer, and the gap has widened. But the bottom has come up. Ireland is a perfect example.
Do you think that GE is getting a bad rap on PCBs? (A liquid chemical which GE used prior to 1977 became the focal point of a massive Hudson River dredging proposal by the Environmental Protection Agency).
Totally. Go and look out the window at that river and try dredging 8 billion pounds to find a few molecules down there. It’s cleaning itself by 90 percent in the last 15 years. I make the case in my book, I put it clearly, nobody’s argued the case yet.
GE owns NBC. What would you say to critics who say that big business doesn’t belong in the media industry?
If you look at the PCB stories, our network has done about five to one compared to the other ones. Just to prove that point to people like you ♦