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CNN Live At Daybreak

A Review of Jack Welch's Career

Aired September 07, 2001 - 08:15   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
VINCE CELLINI, CNN ANCHOR: It is the end of an era at General Electric. Chairman and CEO Jack Welch begins his retirement. Welch is credited with building GE into the world's largest company -- the bluest of the blue chips. GE's stock dollar was down -- stock was down $1 on the Dow industrial index, but most stocks were lower yesterday. GE has a history of growth -- nearly $400 billion during Welch's 20-year reign.

And in New York to discuss the life and times of Jack Welch and his empire, Geoffrey Colvin, editor and columnist for "Fortune" magazine -- good morning, Jeffrey.

GEOFFREY COLVIN, "FORTUNE": Good morning, Vince.

CELLINI: Good morning.

You spent some time with Welch. What made him so effective? And it seemed like he was such a tough guy, but he also had a softer side, rarely revealed.

COLVIN: Yes, it's true. He is well known as a tough guy, and he is a tough guy. But I've always thought that the better way to describe him is as a passionate guy.

He feels whatever he feels he feels very, very strongly. And if he feels that you haven't done a good job and aren't going to, then you will know it quickly and mercilessly. But if he feels you are good, can do better, he will say that too.

A little known aspect of Welch is that he uses the word "love" a lot. He will say, "I love this manager." He is passionate about everything, and that has actually been one of the keys to his tremendous success.

CELLINI: Well, that soft side may be a little tough to swallow for the tens of thousands who lost jobs when he took over at GE. He picked up the nickname "Neutron Jack."

COLVIN: That's right.

CELLINI: And it's a nickname that followed him around, wasn't it?

COLVIN: It followed him for a bit in the '80s, and I'll tell you, it hurt. He didn't like it. You know, that really bothered him.

But the fact is what he did in taking out all of those people in the '80s turned out to be what every other company was going to have to do. And we saw it starting around the late '80s and early '90s with AT&T and IBM and every other big company. In this case, as in many others, Welch saw what companies were going to have to do and did it, but he did it sooner than anybody else, and it drove people nuts sometimes.

CELLINI: Part of the legacy might be, too, you know, not only making money for folks, but under his guidance a lot of others went on to become very successful CEOs. And I think as he looks back, he has to be happy about that as well.

COLVIN: Well, GE is one of the great CEO factories that this country has. There are dozens and dozens of companies out there being run by people who used to work for GE. At the moment, there is GE itself, Home Depot, 3M and Honeywell all in the Dow 30. Among the 30 companies in the Dow Jones industrial average all being run by people who used to work for GE.

CELLINI: Can Welch's management style -- the one he began in 1981 -- would that work today? What kind of changes have we undergone in his world?

COLVIN: It will still work. The big change that he created was focusing on hiring, developing and evaluating the people as the central competency -- the central job of the company. And that's still the right way to go. But we've seen the economy shift in his early days from manufacturing to services; now from services to information as the basis of how everything gets one. And his successor and the people who work with them will have to accommodate that.

CELLINI: Well now it's on to a book tour for him...

(CROSSTALK)

COLVIN: Yes.

CELLINI: ... "Jack: Straight from the Gut."

COLVIN: Right. A big book coming out next Tuesday -- they are orchestrating a big bang publication launch for it -- Tuesday the 11th. And I think it will do well. I have read it, and it's a very effective vehicle for his voice and his point of view. I think it will do well.

CELLINI: Well, Geoffrey Colvin, thank you very much for joining us this morning.

COLVIN: You bet.

CELLINI: So who is taking over? Well, the new chairman and CEO is Jeffrey Immelt. Back in November when Jack Welch announced he was retiring, he also made it clear Immelt would be his successor. (BEGIN VIDEO CLIP)

JACK WELCH, FORMER GE CHAIRMAN AND CEO: He's got a presence. He's got leadership. People like him a lot. He's a great person.

(END VIDEO CLIP)

CELLINI: And Immelt takes the helm at today's board meeting. So just like that -- changing hands, and we'll see where GE goes.

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