Customer Reviews

At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit

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When GE's massive downsizing took place in Pittsfield, MA, I was a frustrrated local official trying to find out what was going on. GE officials furnished little information. Eventually it was thought the GE must have done it to simply stay competitive in the new global economy. Thomas O'Boyle furnishes the answer. The layoffs and plant closings were Jack Welch's idea of a corporate revolution. He was at the cutting edge of a major business philosophy which discarded post-WW II corporate paternalism in favor of downsizing chic. Layoffs and plant closings, formerly the last options of businesses in trouble, became fashionable fiist options in the pursuit of higher profits. Welch, according to O'Boyle, created a work place of purposeful job insecurity. The profit outcome mattered more than people. GE managers had to hit a home run to be number one in profits or they were out. This quest to be number one, wrote O'Boyle, was a major reason for GE, as one of the Pentagon's 100 largest defense contractors, to become the leading corporate criminal in cheating the government to show larger profits. GE could have remained in my city and stayed competitive in comsumer electronic products, but the profits would not have been high enough for Welch's quest to be number one. My city is a long way from recovering from the economic blow of losing about 9, 000 GE jobs. I take serious issue with such revewiers as NY Times, Roger Lowenstein that O;Boyle is wrong and that , "America has reaped a huge dividend (from the layoffs and plant closings): the added goods and services that GE's former workers contribute in other lines of work" Mr. Lwenstein should come to my city to see how wrong he is. Unfortunately GE's corporate practices are now the standard for business in this country. And so long as GE's and other stockholders are happy with their returns on a surging stock market these corporate practices will continue. However, O'Boyle has shown the bad effects of this corporate practice and one has to hope that hope that eventually some corporate leaders, and there are some according to O'Boyle, who will begin to realize they have a duty to their workers and the community and not only stockholders. O'Boyle raises the interesting question of who will follow Welch soon as the new CEO at GE and more importantly what will be his management style. GE does not have to be number one in profits. It can and should show the way in leading us back to a corporate world of responsibiltiy for its workers and the communities it does business in. I hope the next GE leader takes O'Boyle's book seriously and tries to remedy the bad employee and communtiy practices of Welch

The public perception of Jack Welch's tenure at General Electric has been that he focused business effort on his company's core competencies, and thus rewarded the long term shareholder with great financial returns. Tom O'Boyle peers behind the curtain to reveal the darker side of Wizard Welch and his disastrous tenure at one of America's great industrial treasures. Yes, Welch increased GE's stock value; but Welch did it with a draconian management style that failed to pay all of the bills along the way. It is easy to look rich when you don't pay your bills.

O'Boyle identifies some of the unpaid bills, including:

1) The human cost of GE's massive layoffs througout the 1980's. Welch embraced and greatly popularized the "layoff" approach to business: lay off bodies, save money, show more profit. But for every dollar the company profited, others lost. Much of the cost of the layoffs fell on individuals, families and communities that saw jobs at US-based GE operations vanish. This caused untold hardship to both families and governments, which had to rebuild shattered lives and communities. Not all survived, literally.

2) Welch took a rich and deep GE culture of research and development into technological fields, and utterly gutted it. GE's R&D abilities formerly covered a spectrum from steam turbines to appliances to jet engines to railway locomotives. Under Welch, GE's R&D arm became so weak and atrophied that the company's product lines lost the once commanding technological lead they formerly enjoyed. The company's future is betrayed. (Not satisfied with merely gutting GE's R&D, Welch purchased RCA and stripped its assets as well. Only NBC television remains in the GE fold as a major, former-RCA asset. Shockingly, NBC spends more each year to broadcast basketball games than GE spends on R&D. It is so sad, when you think that the only man-made object ever to leave the solar system, Voyager spacecraft, carries a camera that bears the RCA logo.)

3) GE's continuing failure to clean up the PCB's and radioactivity it has left behind in its numerous manufacturing operations; while at the same time making a business unit out of cleaning up PCB's and other pollution for other customers. The unpaid bills also do not include the people who remain afflicted with industrial illnesses from their exposure to chemicals in the GE workplaces over the years.

These are just a few of the topics. The book is profound, and will shock the unitiated. O'Boyle is a historian of American industrial history. He takes the reader on a trip through time, from the laboratories of Edison; to the early workshops of Ford; to the mills of Carnegie; to Tom Watson's IBM; to Rickover's nuclear navy; and so much more.

O'Boyle spent eleven years with the Wall Street Journal, and he knows how to dig out the story and tell it in the best journalistic style. Also, as the notes reveal, O'Boyle has met and talked with many of the luminaries and leaders of American and European industry of this era. O'Boyle has captured the essence of an American tragedy, which was GE's abandonment of its research-oriented, manufacturing legacy to satisfy the ego of one man.

Jack Welch started at GE selling plastics, and he has become his own product. It seems that Jack Welch, who came into control of one of the nation's greatest industrial enterprises, really wanted only to run a credit card company as his life's ambition. Today he has his wish, but the nation has lost.

Is the most profitable and valuable US company spiritually dead? That seems to be Thomas O'Boyle's thesis in "At Any Cost." His riveting book is the first that I have read which chronicles the dark side of Jack Welch's restructuring of the General Electric Company. In an introductory note, O'Boyle expresses regret that Welch and other executives "were unwilling to be interviewed" or to respond to his serious efforts to solicit their comments to issues and concerns raised in his book. His note is to explain the extremely negative views of Welch and GE that O'Boyle gleaned from mountains of court and government records and from interviews with restructuring and down-sizing loosers. Predictably, corporate and business reviews dismiss the book as "muckraking." It is also predictable, however, that this book will have an impact on the eventual replacement of Welch and re-restructuring of GE.

Although O'Boyle closes his book speaking of Welch and GE in the past tense, I believe that his objective is to help. If O'Boyle and Welch haven't, I urge these Irish-Catholic gentlemen to read "The Spirit of Democratic Capitalism" by Michael Novak, a leading Catholic theologian. I am not a student of such matters, but Novak's and O'Boyle's books arrived on my bedstand almost simultaneously as result of absolutely unrelated activities. The possibility that this confluence of books was ordained prompts me to share my observations.

I can not speak to the "accuracy" of the events described in this book but I will say the stories told seem very compelling. J. Welch is held as "the model" for CEO's and by default for potential executives. This book instructs us that the role model the "street" would have us follow is not always the best. No one can argue with the profitability that GE has enjoyed over the years but if the accounts told in this book are accurate then the question has to be asked "profitability at what price?"

This book is still highly relevant. What sets it apart is the depth of research, the writing, and the courage of the author to stand up against the prevailing ideology of the time. Since then Enron and the continuing financial crash has surely taught us that something has been going badly wrong in America and in Britain and it started around 1981 when Welch got his hands on the GE empire. Much of how we view the author's work will depend on how we view the predominant trend of the last three decades - the theology of the bottom line, meeting the quarterly forecasts, downsizing, outsourcing, etc. I try to take a nuanced view, having seen what went before this period, having personally witnessed the power of the unions and the historical inevitability of the Welch era. But the fact that it was inevitable does not mean it was right. There has to be some compromise between labor, management and shareholders that we haven't reached yet.

O"Boyle exposes an excellent example of what is wrong with the American business climate today. Corporate profiteers concerned with short term gain at the expense of everything else. Well written, easy to read, very enlightening, this book strikes out at the venerable institutions which though held in high esteem, should be looked on with contempt. Extremely well researched, the only thing missing from this book is a response from Jack Welch. Boy, I'm glad I don't work for General Electric.

Mine will be the dissenting review. "At Any Cost" is an appalling narrative, devoid of business sense, and nothing short of a one-man hatchet job on GE and Jack Welch. I worked at GE in the early 1980s, fresh from college. I could not have imagined an operation more inefficient. People gabbed in offices instead of worked. Older folks spoke of the good old days and nervously mentioned Jack Welch, the new guy in town. Money was spent as if it had no meaning. I went on a business trip and charged $76, filed an expense report, and was told to change the figure to $150 so future budgets wouldn't be cut. Amazing. This company was ripe for pruning. I say good for Jack. And so what, he exits a bunch of low-margin manufacturing jobs to emphasize financial services. Hasn't anybody grasped the importance of capital creation? Who cares about run-of-the-mill electrical equipment? Ever hear of something called the law of competitive advantage? It's why we let Japan make DRAM chips; we'll focus on the proprietary, value-added technology. The author is so out of touch I wondered if he writes human interest stories for a local paper--maybe something about the latest zoo exhibit. His tendency is toward the socialist; no kidding. Corporations SHOULD be about making money. They are not warm and fuzzy families--anybody who thinks so should hug their spouse and see a mental doctor. Good companies, like GE has become, will treat bright and energetic people well--they understand the resource. But if you're a lazy paycheck collector, you're in trouble. Yes--some innocents will be hurt (that's the Baby with the Bathwater). Acknowledged. But they would be hurt if no action were taken, as foreign competition eventually overwhelmed them. Indecisive companies do go bankrupt! Employees who aren't "in it for themselves" are not managing their careers. That is simply reality in the modern international economy. I got impatient with GE and left. I was interested to learn that Jack Welch says one of his mistakes was moving too slowly. Quite right. I am afraid the author is locked into a Norman Rockwell painting, an image of a feel-good company picnic for Buggy Whips Inc. Simpletons and those who feel unjustly wronged will slobber over this book. Here, they can have my copy. Pathetic. (Oh, by the way, thank you Mr. Welch for the 100 times return you have given my stock the last 15 years. It will pay for my children's education.)

This is an accurate accounting of how Welch ruined the very heart and soul of a wonderful company--one which employees were proud of their association before Welch. I worked many years for GE, both before Welch was CEO and after, and the book read like "this is your life". It is so sad that other executives appear to be on the edge of their chair waiting for every word spoken by Welch and to learn from him the theme of the year or the latest corporate slogan to espouse. I do hope this book becomes a best seller as it would give me confidence that more people would understand the depth of the problems Jack has created. And lastly, I would hope that our business schools would make this required reading to best illustrate how NOT to run a business.

GE has a dark side that doesn't always make it onto the pages of Fortune or Jack Welch's self-serving autobiography. This book covers it.

While Welch eviscerated GE's employee roster, he turned the company into a holding company that tried to operate with as few humans as possible. Over a decade since the book was written, we see the result: a stock price that has withered, a company trying to shed itself of non-core operations and heavy debt, and one person who got all the rewards. (Guess who ?)

Anyone can make a balance sheet look good by firing people. Look at the results for Welch's first five years -- SALES DOWN, BUT PROFIT UP EVERY YEAR. Why ? Because 150,000 people no longer worked for GE. The damage to families at GE was a foreshadowing of the damage sustained throughout the United States, and indeed the developed world, as other CEO's sought to emulate GE and its Charismatic Leader. This book not only chronicles the dismal beginnings -- it shows that, right up to the end of his GE career, with the failures in Japan and the European Union, Welch's ego and brutality cost GE more than the public ever realized. A MUST READ, for CEO's and those who would lead people in business and avoid failure while doing so.