Welch: Going for the Leading Edge : Controversial GE Chairman Has a Passion to Build

Times Staff Writer

The human spark plug behind General Electric’s latest deal-making strode into a room packed with fawning securities analysts Wednesday afternoon. They called him “Trader Jack,” patted him on the back and subjected him to such probing questions as: “Jack, why do you always look like the cat that just swallowed the canary?”

But not everybody felt that way about General Electric Chairman Jack Welch or his decision Wednesday to sell the company’s longtime consumer electronics business.

“It is disturbing that a company of GE’s demonstrated historical competence apparently shies away from competing in manufacturing,” said a competitor in the manufacturing business who asked to remain anonymous. “Short-term financial results seem to be more appealing to GE than to be part of preserving the American standard of living.”


As his wrenching overhaul of GE continues, John Francis Welch Jr. is more controversial than ever.

Wall Street, as demonstrated by analysts’ reception to the sale Wednesday of GE’s consumer electronics business to the French-owned Thomson S.A., adores both the 51-year-old Welch and his reshaping of what has long been regarded as America’s quintessential industrial company.

In his six years as GE’s chairman, he has vastly improved earnings and the company’s stock value. Tenth in total stock value in 1981, GE now ranks third--behind IBM and Exxon.

And several polls of business executives have concluded that Welch is the world’s most admired corporate executive.

But in some business circles, and among some GE employees, they curse his name.

To many, he is still “Neutron Jack,” the nickname given Welch long ago after several wholesale job-cutting sprees--a name he still detests. And to others he has become a symbol of U.S. companies that are selling out to foreign competitors once they are no longer tops in their field.

“Here is a fabulously wealthy company with so much cash,” said a consultant to dozens of manufacturing companies. “So why isn’t he pouring it into businesses this country can still compete in instead of throwing in the towel to the Japanese? His concept of what should be a strategic business for GE has a lot of us shaking our heads.”


Whether it is blame or credit he deserves, Welch has never been one to pass the buck. There is no doubt whatsoever that he is the man orchestrating GE’s transformation from a machinery maker to a service giant.

It is Welch’s dream of making GE worth more than any other U.S. company that drove GE to eliminate one-fourth of its work force and to buy and sell nearly 600 businesses and product lines in six years--largest among them, the $6.4-billion purchase last year of RCA.

This is a man of enormous intellectual curiosity and nervous energy who routinely works 18-hour days and speaks so rapidly that his words tumble over each other, many still bearing the traces of a stammer that has plagued him since childhood. His mother used to tell him that he didn’t have a speech impediment; his brain just worked too fast.

Welch, the only child of a train conductor from Peabody, Mass., took his doctorate in chemical engineering from the University of Illinois to a fledgling department of GE’s plastics division in Pittsfield, Mass., and quickly became known as one of GE’s boy wonders--largely for his marketing prowess.

By age 35, the 5-foot, 8-inch executive with the penetrating blue eyes and argumentative management style was heading the plastics division. Two years later he was a group executive and corporate vice president and on a fast track to the executive suite.

After winning a five-way contest for the top job in 1981, Welch quickly began to dismantle the work of his predecessor, the patrician Reginald H. Jones. Out went any business that wasn’t No. 1 or 2 in its field and in came a bevy of new ones, largely in the service or technology industries.


He also brought a much more freewheeling, entrepreneurial style to GE, in which shouting is welcomed and arguments are encouraged. Welch calls it “constructive conflict.”

But with this new style, say some critics in GE quarters, has come more commotion than the organization can handle and a passion for hands-on management that is threatening the company’s long reputation for management excellence.

Main story, Part I, Page 1 Best-Selling Brands of Color Televisions RCA led the Television Digest ranking of best-selling color television brands for the 1987 model year. The trade publication ranks brands by an estimate of market share compiled from information provided by manufacturers and distributors. Listed below are those brands with estimated market share of 1% or more.

1. RCA 17% 2. Zenith 14.5% 3. Sony 6.0% 4. Sears 6.0% 5. GE 5.95% 6. Magnavox 5.0% 7. Panasonic 4.0% 8. Sharp 3.9% 9. Sylvania 3.5% 10. Mitsubishi 3.0% 11. Quasar 3.0% 12. Hitachi 2.9% 13. Emerson 2.7% 14. Montgomery Ward 2.5% 15. Toshiba 2.2% 16. Goldstar 2.0% 17. Samsung 1.6% 18. J.C. Penney 1.5% 19. Sanyo 1.5% 20. Curtis Mathes 1.0% 21. Philco 1.0%

Source: Television Digest, June 29