Library
- PDF / 61,899 Bytes
- 2 Pages / 612 x 792 pts (letter) Page_size
- 49 Downloads / 218 Views
LIBRARY Jack: Straight from the Gut Jack Welch with John A. Byrne (Warner Books, New York, 2001) xvi + 479 pages, $29.95 ISBN 0-446-52838-2 Jack Welch, then a newly minted PhD graduate in chemical engineering from the University of Illinois, joined General Electric Co. in October of 1960. Twenty years later, he was named CEO, and in the ensuing 20 years he built the company from a $25 billion per year business with $1.5 billion in annual earnings to a $130 billion business with $12.7 billion in annual earnings in 2000. The book, cowritten with John A. Byrne of Business Week magazine, is part autobiographical, part an exposition of Welch’s views on management, and part a history of the successes and failures during his tenure. The book encompasses 26 chapters arranged in five sections; a brief epilogue; four appendices; 16 pages of candid photographs of Welch, his family, business associates, and notable personages he encountered during his career; and a detailed index to people and events. Only 88 pages of a total of 463 pages deal with Welch’s life and activities before becoming CEO. Welch entered GE as a development engineer at its Pittsfield, Mass., plant, engaged in bringing a new plastic, polypropylene oxide (PPO, later named Noryl), from a laboratory curiosity to a commercial product. Despite an explosion of his equipment that blew off the roof of part of the Pittsfield plant, and the discovery of a serious flaw in PPO that although ultimately solved might have prevented its success in its largest intended market, Welch persevered and was soon named general manager of GE’s $26 million plastics business—at age 32, the youngest GM in the company. Three years later, he was named vice president and GM of the Chemical and Metallurgical Division, a $400 million component involved in such diverse products as carbides, industrial diamonds, insulating materials, and electromaterials, as well as plastics. In later years, his responsibilities broadened still further as group executive to include medical systems, appliance components, and electronic components (e.g., semiconductors, TV tubes, and capacitors). Curiously, Welch was never enthusiastic about the semiconductor business, believing that despite high growth, it was too cyclical and capitalintensive to be a rewarding, steady earner. As CEO, Welch introduced some new concepts in management to GE. He insisted that every component be No. 1 or 2 in its market; otherwise the component should be fixed, sold, or eliminated. 388
Money realized from the sale of a business should not go to the bottom line but should be used to improve competitiveness elsewhere in the company. Just because a business had been a traditional one for GE and was profitable were not sufficient reasons to retain it. It must fall within the scope of three main areas: services (financial, information, nuclear, and construction engineering), high technology (medical, materials, industrial electronics, aerospace, and aircraft engines), and core (major appliances, lighting, turbines, transportation,
