|Born||John Francis Welch, Jr.
November 19, 1935
|Education||1957, University of Mass., BSc
1960, University of Illinois, MSc, PhD
All in chemical engineering
|Home town||Salem, Massachusetts|
|Net worth||$750 Million (2012)|
|Spouse(s)||Carolyn B. Osburn (1959-87)
Jane Beasley (1989–2003)
Suzy Wetlaufer (2004–present)
John Francis "Jack" Welch, Jr. (born November 19, 1935) is a retired American business executive, author and chemical engineer. He was chairman and CEO of General Electric between 1981 and 2001. During his tenure at GE, the company's value rose 4000%. In 2006, Welch's net worth was estimated at $720 million. When he retired from GE he took a severance payment of $417 million, the largest such payment in history.
Early life and education
Throughout his early life in middle school and high school, Jack found work in the summers as a golf caddy, newspaper delivery boy, shoe salesman, and drill press operator. Welch attended Salem High School, where he participated in baseball, football, and captained the hockey team.
Late in his senior year, Welch was accepted to University of Massachusetts, where he studied chemical engineering. Welch worked in chemical engineering at Sunoco and PPG Industries during his college summers. In his sophomore year, he became a member of the Phi Sigma Kappa fraternity.Welch graduated in 1957 with a Bachelor of Science degree in chemical engineering, turning down multiple corporate offers in order to attend graduate school at the University of Illinois.
Welch joined General Electric in 1960. He worked as a junior chemical engineer in Pittsfield, Massachusetts, at a salary of $10,500. In 1961, Welch planned to quit his job as junior engineer because he was dissatisfied with the raise offered to him and was unhappy with the bureaucracy he observed at GE. Welch was persuaded to remain at GE by Reuben Gutoff, an executive at the company, who promised him that he would help create the small company atmosphere Welch desired. In 1963, an explosion at the factory under his management blew off the roof of the facilities, and he was almost fired for that episode.
By 1968, Welch became the vice president and head of GE's entire plastics division, which at the time was a $26 million operation for GE. Welch oversaw production as well as the marketing for the GE-developed plastics Lexan and Noryl. Not soon after, in 1971, Welch also became the vice president of GE's metallurgical and chemical divisions. By 1973, Welch was named the head of strategic planning for GE and he held that position until 1979, which involved him now working from the corporate headquarters, exposing him to many of the "big fish" he would one day be among. Not long after his promotion to head of strategic planning, Welch was named senior vice president and head of Consumer Products and Services Division in 1977, a position he held until 1979 when he became the vice chairman of GE. That position was his final stepping stone before becoming the CEO of GE, which happened in 1981.
Welch became GE's youngest chairman and CEO in 1981, succeeding Reginald H. Jones. By 1982, Welch had dismantled much of the earlier management put together by Jones and led an aggressive simplification and consolidation initiative. One of his primary leadership directives was that GE had to be No. 1 or No. 2 in the industries it participated in.
Through the 1980s, Welch sought to streamline GE. In 1981 he made a speech in New York City called "Growing fast in a slow-growth economy". Under Welch's leadership, GE increased market value from $12 billion in 1981 to $280 billion today, making 600 acquisitions while shifting into newly emerging markets. Welch pioneered a policy of informality at the work place, allowing all employees to have a small business experience at a large corporation. Welch worked to eradicate perceived inefficiency by trimming inventories and dismantling the bureaucracy that had almost led him to leave GE in the past. He closed factories, reduced payrolls and cut lackluster old-line units. Welch's public philosophy was that a company should be either No. 1 or No. 2 in a particular industry, or else leave it completely. Welch's strategy was later adopted by other CEOs across corporate America.
Welch valued the element of surprise and would make unexpected visits to various plants and offices. Welch popularized Rank and Yank policies used now by other corporate entities. Each year, Welch would fire the bottom 10% of his managers, irrespective of absolute performance. He earned a reputation for brutal candor in his meetings with executives. He rewarded those in the top 20% with bonuses and stock options. He also expanded the broadness of the stock options program at GE from just top executives to nearly one-third of all employees. Welch is also known for destroying the nine-layer management hierarchy and bringing a sense of informality to the company.
During the early 1980s he was dubbed "Neutron Jack" (in reference to the neutron bomb) for eliminating employees while leaving buildings intact. In Jack: Straight From The Gut, Welch states that GE had 411,000 employees at the end of 1980, and 299,000 at the end of 1985. Of the 112,000 who left the payroll, 37,000 were in businesses that GE sold, and 81,000 were reduced in continuing businesses. In return, GE had increased its market capital tremendously. Welch reduced basic research, and closed or sold off businesses that were under-performing.
In 1986, GE acquired RCA. RCA's corporate headquarters were located in Rockefeller Center; Welch subsequently took up an office in the now GE Building at 30 Rockefeller Plaza. The RCA acquisition resulted in GE selling off RCA properties to other companies and keeping NBC as part of the GE portfolio of businesses. During the 1990s, Welch shifted GE business from manufacturing to financial services through numerous acquisitions.
Welch adopted Motorola's Six Sigma quality program in late 1995. In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. By 1999 he was named "Manager of the Century" by Fortune magazine.
There was a lengthy and well-publicized succession planning saga prior to his retirement between James McNerney, Robert Nardelli, and Jeffrey Immelt, with Immelt eventually selected to succeed him as chairman and CEO. Nardelli became the CEO of Home Depot until his resignation in early 2007, and until recently, was the CEO of Chrysler, while McNerney became CEO of 3M until he left that post to serve in the same capacity at Boeing.
Welch's "walk-away" package from GE was not valued at the time of his retirement, but GMI Ratings estimates its worth at $420 million.
According to Businessweek, critics of Welch have questioned whether the pressure he places on employees may have led them to "cut corners", which may have contributed to controversies over defense-contracting, or the Kidder, Peabody & Co. bond-trading scheme in the early 1990s.
Welch has received criticism for a lack of compassion for the middle class and working class. By his actions during acquisitions and wholesale shutdowns of GE business units Welch proved that keeping only the "good" units of your company can maximize ROI in the short term. Welch has stated that he is not concerned with the discrepancy between the salaries of top-paid CEOs and those of average workers. When asked about the issue of excessive CEO pay, Welch has said that such allegations are "outrageous" and has vehemently opposed proposed SEC regulations affecting executive compensation. Countering the public uproar over excessive executive pay (including backdating stock options, golden parachutes for nonperformance, and extravagant retirement packages), Welch stated that CEO compensation should continue to be dictated by the free market, without interference from government or other outside agencies.
Welch's income and assets came under scrutiny during his divorce from his second wife Jane in 2001, after she included details in divorce papers of what she said he received as benefits from GE. Welch's contracts with GE were subsequently investigated by the U.S. Securities and Exchange Commission (SEC). The retention package, worth $2.5 million, agreed upon by Welch and GE in 1996 promised him continued access after his retirement to benefits he received as CEO including an apartment in New York, baseball tickets and use of a private jet and chauffeured car. These benefits were agreed upon in lieu of a more traditional stock package because, according to Welch, he did not want more money, preferring instead to retain the lifestyle he had enjoyed as CEO once he retired. According to an interview with Welch in 2009 this agreement was filed with the SEC. As a result of the media attention his divorce proceedings brought to his retention package, particularly claims that such a package made him look "greedy", Welch chose to renounce the benefits.
Following Welch's retirement from General Electric, he became an adviser to private equity firm Clayton, Dubilier & Rice and to the chief executive of IAC, Barry Diller. In addition to his consulting and advisory roles, Welch has been active on the public speaking circuit, and co-wrote a popular column for BusinessWeek with his wife, Suzy, for four years until November 2009. The column was syndicated by The New York Times.
In 2005, he published Winning, a book about management co-written with Suzy Welch, which reached No. 1 on The Wall Street Journal bestseller list, and appeared on New York Times Best Seller list.
On January 25, 2006, Welch gave his name to Sacred Heart University's College of Business, which will be known as the "John F. Welch College of Business". Since September 2006, Welch has been teaching a class at the MIT Sloan School of Management to a hand-picked group of 30 MBA students with a demonstrated career interest in leadership.
Jack Welch Management Institute
In 2009, Welch founded the Jack Welch Management Institute, a program at Chancellor University that offered an online executive MBA degree. The institute was acquired by Strayer University in 2011. Welch has been very actively involved with the curriculum, faculty and students since the beginning of the institution. The Jack Welch Management Institute MBA program was unranked by the U.S. News due to the fact it is not the typical academic college. However JWMI has been recognized in the online education community for gaining reputation among online programs. Its goal is not to make money, but to build over time focusing on the quality of the program and increasing the number of students enrolled year after year. Jack Welch’s personal real time successful insights sets this university apart from others. 
Over the years while Jack Welch was working at GE, he became known for his teaching and growing leaders. He has taught at MIT’s School of Management and teaches seminars to CEO’s all over the globe. “More than 35 CEO’s at today’s top companies [are] trained under Jack Welch.”  He demonstrates his passion for the institute by being highly involved with the students, faculty and the development of the curriculum. Students within the institute have direct access to Jack Welch, and he hosts quarterly video conferences with his students. 
It is known that along with his video conferences, Welch creates many video responses to messages on bulletin boards and devotes time to answering individual emails. His investment in the university is also reflected in his interest in the institutes NPS (net promoter score). He administers surveys on satisfaction regularly and scrutinizes the results to find scores that need improvement. The institute received a score of 65%, which is comparable to companies like Apple and Google.
In an interview with Wired Academic, Welch explains the overall status of his MBA program stating that the persistence rate of students continuing on to a second year has grown from 90% to 95%, and that the institute turns away very few students in the admissions process.  Welch is also quoted to have said that he would like better leadership training for every MBA student because "the world has gotten faster, more transparent... We are trying to put things in place, in a fast-paced global world, to build great teams. We are convinced that is the key to winning."
He had four children with his first wife, Carolyn. They divorced amicably in April 1987 after 28 years of marriage. His second wife, Jane Beasley, was a former mergers-and-acquisitions lawyer. She married Welch in April 1989, and they divorced in 2003. While Welch had crafted a prenuptial agreement, Beasley insisted on a ten-year time limit to its applicability, and thus she was able to leave the marriage with an amount believed to be around $180 million.
Welch's third wife, Suzy Wetlaufer (née Spring), co-authored his 2005 book Winning as Suzy Welch. Wetlaufer served briefly as the editor-in-chief of the Harvard Business Review. Welch's wife at the time, Jane Beasley, found out about an affair between Wetlaufer and Welch. Beasley informed the review and Wetlaufer was forced to resign in early 2002 after admitting to having been involved in an affair with Welch while preparing an interview with him for the magazine.
Since January 2012, Welch and Suzy Welch wrote a biweekly column for Reuters and Fortune, which they both left on October 9, 2012, after an article critical of Welch and his GE career was published by Fortune.
On March 11, 2010, Welch appeared as himself in the fourteenth episode of the fourth season of the hit NBC sitcom 30 Rock. In the episode, he governed the sale of NBC Universal to a fictional Philadelphia-based cable company, Kabletown, a parody of the actual acquisition of NBC Universal from General Electric by Comcast in November 2009.
Jack Welch identifies as a Republican. He has stated that global warming is "...the attack on capitalism that socialism couldn't bring," and that it is a form of "mass neurosis." Yet, he has said that every business must embrace green products and green ways of doing business, "whether you believe in global warming or not...because the world wants these products".
In regards to shareholder value, Welch said in an interview with the Financial Times on the Global financial crisis of 2008–2009, “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy...your main constituencies are your employees, your customers and your products".
Welch has been publicly criticized due to his opinions on job numbers from September 2012.  After the Bureau of Labor Statistics (BLS) released employment data claiming that the U.S. unemployment rate had dropped from 8.1% to 7.8%, Welch tweeted, "Unbelievable jobs numbers...these Chicago guys will do anything...can't debate so change numbers". His tweet drew widespread criticism especially noting General Electric's long reputation for earning manipulations and fixed numbers.  Yet, Welch has stood by his tweet stating if he could write the tweet again, he would add question marks at the end to make it clear that his intention was to raise a question over the legitimacy of the job numbers.  In a Wall Street Journal Opinion piece, Welch wrote that the debate has led to people looking at unemployment data more carefully and skeptically. Referencing his original tweet, he stated "Thank God I did," in a Squawk Box appearance  and also wrote, “The coming election is too important to be decided on a number. Especially when that number seems so wrong.” 
Jack Welch was more known for the old "GE way" management philosophy of an ideal "borderless organization", taking off boundaries between layers of management.  General Electric under CEO Jeff Immelt has realigned itself becoming more specialized, cutting off ties with older businesses, and is now more focused on services in finance, health care, and aircraft engines.
An article from the New York Times highlights the fact that General Electric after the era of Jack Welch is more focused on core businesses after a spin off of its North America retail finance business. After selling a fraction of its business, Immelt planned to use the proceeds to build the capital as a "standalone company", resulting in "a boost for shareholders". 
However, there still exists controversy of which CEO brought the most benefits for General Electric as a company overall. A Product Design & Development article from April 2014 has highlighted the overall manufacturing employment's precipitous decline from the peak in 1979 to 2011. President Obama appointed General Electric's Jeff Immelt as the chairman for the Council on Jobs and Competitiveness in 2011, with the council's goal to create 1 million jobs in manufacturing. Yet this news came as a surprise for many as General Electric reduced U.S. manufacturing jobs from 2000 to 2010 by half. 
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- Jack: Straight From The Gut, (ISBN 0-446-69068-6)
- Winning by Jack and Suzy Welch – HarperCollins (April 2005), (ISBN 0-06-075394-3)
- Winning: The Answers by Jack and Suzy Welch – Harper 2006, (ISBN 0-00725264-1)
- Jack Welch and the GE way : management insights and leadership secrets of the legendary CEO by Robert Slater (ISBN 0070581045)
- The New GE: How Jack Welch Revived an American Institution, (ISBN 1-55623-670-0)
- Jacked Up: The Inside Story of how Jack Welch Talked GE into Becoming the World's Greatest Company by Bill Lane – McGraw Hill (2008), (ISBN 978-0-07-154410-8)
- At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit, (ISBN 0-375-70567-8)
- "Control Your Destiny or Someone Else Will: How Jack Welch is Making General Electric the World's Most Competitive Company" Double Day 1993 by Noel Tichy and Strat Sherman (ISDN 0-385 24883-0)
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- jackwelch.strayer.edu, official website of the Jack Welch Management Institute
- welchway.com, official website of Welch Way Management Training
- Jack Welch at the Internet Movie Database
- Works by or about Jack Welch in libraries (WorldCat catalog)
Reginald H. Jones
|Chairman & CEO of General Electric