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American Morning
2002 In Review: Year in Business
Aired December 26, 2002 - 07:42 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.
DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: We've been looking at "2002 in Review." Today's focus is business, and who better to talk about it than Jack Welch. In fact, he spoke to Paula Zahn about this past year that in many ways was dominated by scandal.
(BEGIN VIDEOTAPE)
PAULA ZAHN, CNN ANCHOR (on camera): Do you have any confidence that the CEOs who are now in charge of these major companies are going to change this picture, of certifying results differently than they used to have to?
JACK WELCH, FORMER CHAIRMAN, GENERAL ELECTRIC: Well, we've always certified results. This isn't something new.
ZAHN: Well, you're much more accountable now than you used to be.
WELCH: Not really. These folks that did get it wrong are all being carried off in handcuffs. So, technically I don't think so.
These companies were new companies basically, without processes and without cultures. Culture counts. And without having all of these things in place, the processes in line, all hell can break loose. And it did in some of these cases. But you don't see DuPont, 3M, GE, you don't see accounting things there.
I think perks to CEOs are whatever it takes to get them. If to get you here, they have to give you a car or something else special, they ought to give it to you.
ZAHN: You gave back perks, and you're not sorry about that. You felt that was the appropriate thing to do.
WELCH: I gave back perks because of the time, and they weren't perks. But in the light of a personal situation, these all don't look right. Mine wasn't (UNINTELLIGIBLE) package. Mine was negotiated in December of '95. And it was a series of quid pro quos. It said, I'll stay five years, I won't go to competition, and in return for that, I don't want money from you. I want to keep what I've got now. That was the deal.
If you look at housing, because the refinancing is doing well, consumer staples are doing well, health care is doing well. Telecom and computing is a disaster. And the industrial segment of the economy is really down. So, it's a mixed bag. But if you look at the numbers, unemployment -- well, we never want unemployment. It's still 6 percent or less. Inflation is negligible. So, I don't think it's that bad.
ZAHN: So, you don't think we're in a recession.
WELCH: We're in a psychological recession. People have lost trillions in the market. But in the end, the numbers -- looking at the numbers, they're not bad.
ZAHN: What do you think the Bush administration should do when it comes to tax policy? Because there is a criticism out there that they're more interested in making permanent this tax cut and less interested in providing some sort of short-term stimulus to the economy.
WELCH: As a lay person, I'd tell you that I'm clearly in favor of some form of relief on double taxation dividends. I wouldn't give the benefit to corporations. I'd give it to consumers.
The biggest uncertainty, Paula, we face is, what are the domestic implications, whether it be a large deficit, whether it be a loss of lives and stick them into harm's way, where we have a battle, whether God forbid we have another incident here. That's the unknown in this economy.
This economy in 2003 will recover, everything is in place, if we don't have some uncertain event come upon us to shake the confidence of people. We have plenty of money, we have low interest rates. And what's important is the confidence the American consumer gets (ph) back.
Don't forget, we're going to have -- American business is going to go under pressure. Now, the pressure of which they have never faced before.
The competitive threat on Chinese goods is going to be enormous. We're in for a long-term, competitive battle. But you'll see, the ingenuity of the American people are going to win.
(END VIDEOTAPE)
DARYN KAGAN, CNN ANCHOR: That's our Paula Zahn talking to Jack Welch.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Aired December 26, 2002 - 07:42 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: We've been looking at "2002 in Review." Today's focus is business, and who better to talk about it than Jack Welch. In fact, he spoke to Paula Zahn about this past year that in many ways was dominated by scandal.
(BEGIN VIDEOTAPE)
PAULA ZAHN, CNN ANCHOR (on camera): Do you have any confidence that the CEOs who are now in charge of these major companies are going to change this picture, of certifying results differently than they used to have to?
JACK WELCH, FORMER CHAIRMAN, GENERAL ELECTRIC: Well, we've always certified results. This isn't something new.
ZAHN: Well, you're much more accountable now than you used to be.
WELCH: Not really. These folks that did get it wrong are all being carried off in handcuffs. So, technically I don't think so.
These companies were new companies basically, without processes and without cultures. Culture counts. And without having all of these things in place, the processes in line, all hell can break loose. And it did in some of these cases. But you don't see DuPont, 3M, GE, you don't see accounting things there.
I think perks to CEOs are whatever it takes to get them. If to get you here, they have to give you a car or something else special, they ought to give it to you.
ZAHN: You gave back perks, and you're not sorry about that. You felt that was the appropriate thing to do.
WELCH: I gave back perks because of the time, and they weren't perks. But in the light of a personal situation, these all don't look right. Mine wasn't (UNINTELLIGIBLE) package. Mine was negotiated in December of '95. And it was a series of quid pro quos. It said, I'll stay five years, I won't go to competition, and in return for that, I don't want money from you. I want to keep what I've got now. That was the deal.
If you look at housing, because the refinancing is doing well, consumer staples are doing well, health care is doing well. Telecom and computing is a disaster. And the industrial segment of the economy is really down. So, it's a mixed bag. But if you look at the numbers, unemployment -- well, we never want unemployment. It's still 6 percent or less. Inflation is negligible. So, I don't think it's that bad.
ZAHN: So, you don't think we're in a recession.
WELCH: We're in a psychological recession. People have lost trillions in the market. But in the end, the numbers -- looking at the numbers, they're not bad.
ZAHN: What do you think the Bush administration should do when it comes to tax policy? Because there is a criticism out there that they're more interested in making permanent this tax cut and less interested in providing some sort of short-term stimulus to the economy.
WELCH: As a lay person, I'd tell you that I'm clearly in favor of some form of relief on double taxation dividends. I wouldn't give the benefit to corporations. I'd give it to consumers.
The biggest uncertainty, Paula, we face is, what are the domestic implications, whether it be a large deficit, whether it be a loss of lives and stick them into harm's way, where we have a battle, whether God forbid we have another incident here. That's the unknown in this economy.
This economy in 2003 will recover, everything is in place, if we don't have some uncertain event come upon us to shake the confidence of people. We have plenty of money, we have low interest rates. And what's important is the confidence the American consumer gets (ph) back.
Don't forget, we're going to have -- American business is going to go under pressure. Now, the pressure of which they have never faced before.
The competitive threat on Chinese goods is going to be enormous. We're in for a long-term, competitive battle. But you'll see, the ingenuity of the American people are going to win.
(END VIDEOTAPE)
DARYN KAGAN, CNN ANCHOR: That's our Paula Zahn talking to Jack Welch.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
