Jack Welch

John "Jack" Francis Welch Jr. (November 19, 1935 – March 1, 2020) was an American business executive. He was chairman and CEO of General Electric (GE) between 1981 and 2001. During his 20-year tenure, GE's market value grew from $14 billion to $600 billion, and he has frequently been cited as one of the greatest chief executives of the twentieth century.

Under Welch, GE acquired the RCA Corporation in 1986 and expanded aggressively into financial services through GE Capital, which came to account for 40% of the company's revenue. He also restructured GE around a philosophy that each of its business units must rank first or second in its market, shedding those that did not meet that standard. By the end of his tenure GE was the most valuable company in the world.

In later years, Welch's practices and legacy have drawn scrutiny from historians and journalists, particularly regarding his transformation of GE into a company heavily dependent on financial services. GE Capital collapsed in the wake of the 2008 financial crisis, and GE was eventually broken into three separate companies. Additionally, his emphasis on short-term financial performance over long-term investment has been cited as having had a lasting effect on American corporate culture, including at companies such as Amazon.

When Welch retired from GE, he received a severance payment of $417 million; at that time this was the largest such payment in business history. In 2006, Welch's net worth was estimated at $720 million.

Jack Welch was born on November 19, 1935, in Peabody, Massachusetts, the only child of Grace (née Andrews), a homemaker, and John Francis Welch Sr., a Boston & Maine Railroad conductor. Welch was an Irish American and a Catholic. His paternal and maternal grandparents were both Irish.

Throughout his early life in middle school and high school, Welch found work in the summers as a golf caddie, 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 Amherst, where he studied chemical engineering. Welch worked in chemical engineering at Sunoco and PPG Industries during his college summers. In his sophomore year, Welch became a member of the Phi Sigma Kappa fraternity. He graduated in 1957 with a Bachelor of Science degree in chemical engineering, turning down offers from several companies in order to attend graduate school at the University of Illinois Urbana-Champaign. Welch graduated from the University of Illinois in 1960, with a master's and a PhD in chemical engineering.

Welch later received an honorary Doctor of Science from University of Massachusetts Amherst in 1982, and in 2009 an honorary doctorate from University of California, Los Angeles.

Welch joined General Electric in 1960. He worked as a junior chemical engineer in Pittsfield, Massachusetts, at a salary of $10,500, which would be equivalent to approximately $112,000 in 2025 dollars. 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 blew the roof off the factory under Welch's management, and he was almost fired.

By 1968, Welch became the vice president and head of GE's 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 long afterward, in 1971, Welch also became the vice president of GE's metallurgical and chemical divisions. By 1973, Welch was named group executive, managing chemical, metallurgical, medical systems, appliance components and electronic components businesses. He held that position until 1979, which involved him working with the corporate headquarters, exposing him to many of the "big fish" he would one day be among. In 1977 Welch was named senior vice president and head of Consumer Products and Services Division, a position he held until 1979 when he became the vice chairman of GE.

In 1981, Welch became GE's youngest chairman and CEO, succeeding Reginald H. Jones. By 1982, Welch had dismantled much of the earlier management put together by Jones with aggressive simplification and consolidation. 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", which is often acknowledged as the "dawn" of the shareholder value movement. Under Welch's leadership, the market value of GE increased from $12 billion in 1981 to $410 billion when he retired, the company making 600 acquisitions while shifting into emerging markets. Welch pioneered a policy of informality at the workplace, 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 units.

Welch valued surprise and made unexpected visits to GE's plants and offices. He popularized so-called "rank and yank" policies used now by other corporate entities. Each year, Welch would fire the bottom 10% of his managers, regardless of absolute performance. He earned a reputation for brutal candor. Welch also rewarded those in the top 20% with bonuses and employee stock options. He also broadened the stock options program at GE, extending availability from top executives to nearly one third of all employees. Welch is also known for abolishing the nine-layer management hierarchy.

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 had 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 September 2004, the Central Intelligence Agency published a parody of Welch applying his management skills while serving as imagined Deputy Director of Intelligence.

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 was known as the "John F. Welch College of Business" until 2016, when it began using the name the "Jack Welch College of Business". Since September 2006, Welch had 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.

In December 2016, Welch joined a business forum assembled by then president-elect Donald Trump to provide strategic and policy advice on economic issues.

Welch had four children with his first wife, Carolyn. They divorced amicably in 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 reportedly with around $180 million.

Welch's third wife, Suzy Wetlaufer (née Spring), co-authored his 2005 book Winning as Suzy Welch. She 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 the affair with Welch while preparing an interview with him for the magazine. They married on April 24, 2004.

Welch died from kidney failure at his home in New York City on March 1, 2020, at age 84. His funeral was held at St. Patrick's Cathedral.

Welch identified politically as a Republican. He stated that global warming is "the attack on capitalism that socialism couldn't bring", and that it is a form of "mass neurosis". However, Welch additionally 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".

Regarding shareholder value, Welch said in a Financial Times interview on the 2008 financial crisis, "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 was widely criticized for his views on the employment data in the Bureau of Labor Statistics's September 2012 jobs report. After the release of the report stating 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". Welch stood by his tweet, stating if he could write it 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 numbers. A subsequent New York Post article on the employment data suggested manipulation of some of the survey responses by an individual employee in 2010, but that article was widely debunked, including the fact that the employee had not worked at the Bureau since 2011. No proof of the political manipulation of the job numbers from September 2012 has been presented. The Census Bureau later released a statement denying the possibility of systematic manipulation of the data. Still, in an opinion piece in The Wall Street Journal, Welch wrote that the debate 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".

Welch also often received criticism for a lack of compassion for the middle class and working class. When asked about excessive CEO pay compared to ordinary workers (including backdating stock options, golden parachutes for nonperformance, and extravagant retirement packages), Welch labeled such allegations "outrageous" and vehemently opposed proposed SEC regulations affecting executive compensation. Countering the public uproar, Welch declared that CEO compensation should continue to be dictated by the "free market", without interference from government or other outside parties.

Welch has been described as "perhaps the most celebrated American boss of recent decades".

Yet by Wall Street measures, a $100,000 investment in GE shares in the year 2000 (near the end of Welch's tenure) had lost about 80 percent of its value as of the year 2021.

Despite this trend, in a 2015 article in Harvard Business Review, business consultant Ron Ashkenas argues that "Jack Welch's approach to breaking down silos still works", citing examples of engineering companies who have discovered for themselves that "fragmented, geographically dispersed" patterns of organization make it "very difficult ... to coordinate efforts across functions, keep everyone focused on the cost and delivery goals and get people to reach consensus".

Welch has been criticized for practices that have harmed workers and the company: he eliminated thousands of jobs at GE, contributing to a reduction of the U.S. manufacturing base. He eliminated 10% of employees every year, a practice adopted by many other companies. He was a leading proponent of mergers and acquisitions, helping to give rise to an economy that is more concentrated and less dynamic. He pioneered "financialization", changing GE from a manufacturing company into, effectively, an unregulated bank, which harmed GE over the long term.