General Electric Company
• Founder: Thomas A. Edison.
• Distinction: It lit up our lives.
• Primary products: Electrical equipment, home applicances, jet engines, financial services, broadcasting.
• Annual sales: $110.832 billion.
• Number of employees: 340,000.
• Major competitors: Matsushita, Rolls-Royce, Siemens.
• Chairman and CEO: John F. Welch Jr.
• Headquarters: Fairfield, Conn.
• Year founded: 1892.
• Web site: www.ge.com.
Less than a year before he was scheduled to step down as head of General Electric, Jack Welch signed the most lucrative non-fiction book contract ever awarded. The fabled chairman and CEO, called “the leading management revolutionary of the century” by Fortune magazine, was given an astounding $7.1 million to share his story with the world. That was far more than other business leaders had received for similar projects. It was also more than the amount paid for any previous big-name autobiography, including those written by General Colin Powell, and Pope John Paul II. (This advance was eclipsed in 2001 by the $8 million given to Hillary Rodham Clinton to pen her memoirs.)
Many obser vers, even some who readily acknowledge Welch as a bona fide business genius, expressed doubt that he could ever peddle enough copies to justify that type of advance. But Welch repeatedly faced such skepticism after taking over at GE in 1981 as the youngest leader in the company’s long and storied history. He always found ways to dispel it over the ensuing two decades, and his supporters were confident he could do so once more.
General Electric, to be sure, was already one powerful company when the 45year-old son of a railroad conductor took control. The year before, it reveled in a $12 billion market value and recorded earnings of $1.5 billion on sales of $25 billion. It could trace its roots to the great Thomas Alva Edison, and notable alumni ranged from Hewlett-Packard co-founder David Packard to offbeat novelist Kurt Vonnegut. It had a hand in developing everything from light bulbs and toaster ovens to televisions and jet planes. Its name was one of the most well-known on Earth.
Welch and his backers felt GE could do better, however, and under his direction it has. By emphasizing quality in both products and processes, the company’s sales increased nearly ten-fold while its stock moved consistently upward. Unproductive subsidiaries were jettisoned and promising new ones acquired. A bloated payroll was trimmed drastically and unnecessary layers of bureaucracy cut. In the process, GE was transformed from a successful if lumbering old-line industrial giant into a sleek money-minting conglomerate that now combines manufacturing with service and technology in a way that meshes perfectly for today’s global economy.
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