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January 2011 to meet with Immelt. Ruh says he was impressed by Immelt’s vision and his willingness to admit that he didn’t fully know what he was doing. “Basically, Jeff said, ‘Look, we’re on Step 1 of a 50-step process, and I just need you to help me figure out what to do because I can only see out one or two steps,’ ” Ruh says. He took the job, and several weeks later his new boss promised to invest $1 billion in a software operation in San Ramon, Calif. GE’S ambitions were greeted with skepticism in the Valley. In 2012, when Immelt promoted the software venture in San Francisco during a company- sponsored event with Marc Andreessen, the star venture capitalist and a friend of Immelt’s warned that it would be difficult for a hardware company like GE to assemble a team of data scientists that could performp the kind of tasks that GE had in mind. “It’s hard to be really good at that,” Andreessen said. “It’sit really complicated.” (Bloomberg LP, which oowns Bloomberg Businessweek, is an investor in Andreessen Horowitz.)
Jennifer Waldo, GE’S head of human relationstions in the San Ramon office, says recruiters had a hhard time just getting people to come in for an interview.inter Nine out of 10 software developersers they contactecontacted had no idea GE was in the business or that it even had opoperations in California. Nor were they necessarily interestedinte in learning anything more: Almost all had jobs and couldn’t see any upside to working for an East Coastco microwave oven manufacturer. In 2013, Waldo appealed to Immelt for help when he visited San Ramon. “I walked him through all those issues,” she says. “I needed to compensate differently. I needed to in-source my recruiting team. We were competing in a marketplace where we’re not even a recognized player.” A former GE recruiter says the company offered stock options to job candidates, but not actual stock, the norm in Silicon Valley. There were also no nap rooms, no on-site child care, no dogs wandering around the office.
Waldo and her team found they could make headway by telling prospects that they would have a chance to develop trains and power equipment rather than some inconsequential social-networking app. “I had a candidate in the early days,” she recalls. “She came in and said, ‘I’m sitting there trying to figure out how to put a Pinterest button on something, and I get this phone call from GE, and you’re talking about making aircraft engines fly more efficiently.’ ” (A GE spokeswoman says the company now includes stock in its compensation for software developers, too.)
GE also targeted startup veterans who’d spent years putting in hours for low pay hoping to be the next Mark Zuckerberg. “They went around to guys who were in their second and third startup and had been eating ramen noodles for eight years,” says Nick Heymann, an analyst at William Blair. “They said, ‘Look, how would you just like to have a normal lifestyle, live an hour outside the Bay Area, make a quarter of a million bucks a year, and give your kids a really good education?’ ” At the end of 2013, GE had 750 people working in San Ramon.
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control, process-laden.” It’s a sign of his personal charisma that, unlike many of his employees, the boss can speak corporate jargon and make it sound profound.
Immelt also thought it was time to revamp GE’S annual review process to make the company more palatable to younger, software-literate workers. Under Welch, GE was famous for annual reviews that ranked all its employees numerically according to their performance. Then the bottom 10 percent were fired. “The biggest cowards are managers who don’t let people know where they stand,” Welch told Bloomberg Businessweek in 2012.
“It just didn’t make sense anymore,” says Susan Peters, GE’S senior vice president for human resources, of the annual review process. The company decided to scrap them altogether, replacing them with a gentler system where employees are “coached” by their more experienced peers.
Unlike some of Immelt’s earlier management initiatives—the idea jams and the imagination breakthroughs—the new ones seemed to have the intended effects. Fastworks, according to GE, enabled the development of a new gas turbine in a year and a half, rather than the usual five. “This is a billion-dollar product line,” says Steve Bolze, chief of GE’S power division. “It’s going to expand to be one of our single biggest launches in our history.”
In April 2015, Immelt announced his plan to sell $200 billion of its GE Capital assets within two years, faster than Wall Street had expected. Not surprisingly, he called it a “pivotal day.” Previously skeptical analysts praised Immelt during a conference call when he explained the plan. Even Barclays Capital’s Scott Davis, who had speculated only a month earlier that Immelt would soon be out of a job, was contrite. “Congrats,” Davis said. “I know we have all given you a lot of crap over the years, but this is pretty good stuff for redemption. That’s my best apology.” He added, “You can keep your job a little longer, I guess.”
Along with unloading most of its risky financial business, GE struck a deal to sell off its appliance division to Haier, the Chinese conglomerate, and increased its share of the global power industry with its 2015 purchase of Alstom, a French energy company, for $10 billion. As a result, 90 percent of GE’S profits will come from industrial operations by 2018. (During its glory years from the late ’90s into the mid-2000s, GE Capital contributed as much as 40 percent.) Immelt says this is the GE he’s been trying to create since the financial crisis, although he acknowledges that it might have been difficult for outsiders to discern.
In January, GE announced the move to Boston, where the deer are few and the software developers plentiful. “Sitting in a rural setting, you can never be scared enough of what’s next,” Immelt says. “You just can’t be. You can’t be paranoid enough. And I felt like it would be a good thing for the business just to be in the flow of ideas.” It could also help GE attract more young employees with technology backgrounds, which remains a struggle because most people still don’t associate GE with software. GE has acknowledged this by running TV ads featuring a fictitious coder named Owen who gets blank stares from his friends when he tells them he’s been hired by GE.
“Guys, I’ll be writing a new language for machines so planes, trains, and even hospitals can work better,” Owen says. “So you’re going to work on a train?” a friend asks. “No, on trains,” Owen corrects him. “On trains.” “So you’re not going to develop stuff anymore?” It’s rare for GE to laugh at itself like this, but the commercials have helped recruiting. “The Owen ads have increased the number of résumés we get by eight times,” says Ruh, now GE’S chief digital officer.
Head count at the San Ramon office is 1,300, including some refugees from Google and Facebook. It already has aviation customers using Predix applications to monitor the wear and tear on their jet engines and calibrate their maintenance schedules based on that data rather than an average for the entire fleet. It’s created smart wind turbines that tell each other how to shift their blades to catch more wind, which GE says can increase their power output by as much as 20 percent.
But Immelt needs to sell vast amounts of applications and Predix-based analytics to reach his goal of making GE a top 10 software company in 2020. That’s not a random deadline. Traditionally, GE chief executives have served 20 years, so his time will be just about up by then. He says the company already has a succession plan in place. If he can complete his digital reinvention of the company, he could depart in glory, the way Welch did.
GE says it’s beginning to sell Predix-based services to customers who design their own industrial equipment. Pitney Bowes is using Predix on its mailing-label machines and letter-sorting devices in corporate mailrooms; Toshiba is using it on elevators. “The Industrial Internet is going to be the dark matter of the Internet,” promises Harel Kodesh, chief technology officer for GE Digital, which is what the company now calls its software division. “It’s something you don’t see, but it is actually the bulk of what’s happening on the Internet. Other than porn, I guess.”
That may be, but GE faces competition from all sides. Amazon and Google are getting into the Internet of Things along with IBM and Microsoft. There are dozens of small startups with similar ambitions that don’t need Eric Ries to tell them what to do. Then there’s perhaps an even bigger unknown: Will other large industrial companies turn to GE to manage their information? “If you’re a manufacturer of some size and sophistication, are you going to say ‘Hello, GE. You can own the data on my business’? ” asks Brian Langenberg, an independent analyst and founder of Langenberg & Co. in Chicago. “Or are you going to say, ‘I think I’m going to do it on my own’? I’m skeptical.”
Not long ago, Immelt gave a speech in Dubai about the Industrial Internet. He wasn’t talking to tech people “with spiked hair,” as he puts it. He was addressing attendees who worked at oil companies and airlines—in other words, his kind of people. Immelt could see them nodding their heads approvingly as he talked. “It’s moments like that when you think, ‘ This might work,’ ” he says later. “‘ This really might work.’ ” <BW>
saw the photo first, me in a bloody wash of red with “RACIST” pulsing over my face. A couple of clicks brought me to this:
“In the darkest shadow of Bloomberg’s glossy office building in Manhattan, you may find a woman by the name of Dune Lawrence—a ‘journalist’ who has built a career on writing salacious articles about China.”
That was my introduction to Theblot, a website I hope you’ve never heard of. The article went on and on: I’d been kicked out of China for poor job performance and eked out a living on minimum wage. My appearance was ravaged by “years of consuming hormone-packed fried chicken and stressing over money.” Now, I’d found a way to save my sinking career by writing negative articles about China and taking kickbacks from short sellers. In a cinematic scene set at Kentucky Fried Chicken, this Internet version of me laid out a strategy: “‘Bashing the Chinese could be a profitable niche for me,’ Lawrence said to a source while biting off a juicy chicken leg quarter at KFC. ‘ The Chinese don’t vote, the Chinese don’t sue people, they just sit there taking the s---. How much better can it get? I am making a living out of it!’ ”
It was difficult for me to keep reading. In addition to all the lies, the story was laced with creepy sexual imagery: I’d had my “panties ripped off” and was like “a dog wagging her tail trying to attract a mating partner.” I felt overwhelmed; it was as if something heavy were pressing into my forehead. I wanted to fight back, and I also wanted to hide. I haven’t been able to do either.
The story, published on Jan. 8, 2014, had the byline “John Sterling.” The site’s other articles were an odd mix of celebrity gossip, entertainment news, and stabs at reporting on serious topics such as drug marketing. It wasn’t exactly high journalism, but it looked professional, not like some amateur blog. Google seemed to think so as well, because the story instantly went to the top of the results when I searched my name.
In September 2015 the FBI arrested the man behind Theblot, one Benjamin Wey. Not for smearing me or the other people he imagined were his enemies. He’s primarily a financier, and he was charged with securities fraud and other financial crimes involving Chinese companies he helped to list on U. S. stock markets. The U. S. Department of Justice alleges Wey pocketed tens of millions of dollars in illicit profits that he funneled through associates overseas and back into accounts in the U.S. Wey denies the charges. A trial has been set for March 2017.
Meanwhile, Theblot’s lies about me still pop up online. The same is true for a young woman who won an $18 million judgment against Wey and his companies for sexual harassment and defamation, a journalist who wrote about her, a retired Nasdaq official, and a Georgetown University law professor. As Wey, 44, awaits trial, he regularly posts Blot articles calling all of us, and others, frauds, racists, and extortionists. He’s found a way to exact revenge with few consequences, and he’s milking it.
y the time Wey distributed his case study, I was working on a story about a former client of his: Agfeed Industries, a Chinese animal-feed company embroiled in bankruptcy, a shareholder lawsuit, and a U. S. Securities and Exchange Commission investigation. Wey didn’t respond to my calls or e-mails. I reconstructed some of his involvement from Internet searches and turned up a press release from NYGG saying it had helped Agfeed raise $86 million in the U.S. My story came out in December. Less than three months later, the SEC sued Agfeed and its Chinese executives for allegedly fabricating revenue from 2008 to 2011. The company settled without admitting liability and agreed to return $18 million in illicit profits.
Wey e-mailed me on New Year’s Day 2014. He said he was seeking comment for a series of investigative articles about short sellers and fraud, and he had a list of questions for me. Here’s a sample. (All correspondence from Wey in this story is presented as he sent it, uncorrected.)
“If you have no business background and neither have you obtained any education in the field of accounting of business, how could you have derived conclusions on your own involving complex global business matters mentioned in your various articles?” “We were told you were ‘emotionally scarred’ while living in China and you are racially biased against the Chinese people. Is it true?”
“Sources told us that you have an active business activities outside your Bloomberg employment. What are those business activities? How are you able to support your lifestyle? What compensation have you received from stock short sellers, hedge funds and other tabloid writers?”
He ended with: “This is the time for you to come out clean, Dune.”
I didn’t respond. He followed up two days later with additional prompts, including “Sources told us you have gained a lot of weight due to stress.”
Wey had already started tweeting that I was implicated in “massive frauds.” When Bloomberg’s lawyers sent him a letter telling him to take down the tweets and stop defaming me, he fired off another long e-mail. “You are a tabloid writer, a sensational woman, a total loser with absolutely no sense of morality,” read the message, which nonetheless went on to say that “this is just the beginning of endless efforts to express our opinions forever, and continues the debates of our differences in civility.”
I knew something was coming, so I kept Googling my name and Wey’s name to see what it would be. That’s how I discovered my star turn on Theblot.
I was rattled for days. I couldn’t focus on a story I was reporting about—as it happens—online privacy and anonymous browsing. Still, some things struck me as absurdly funny. Wey tried to drum up traffic to the story with a tweet claiming I was implicated in a “new Bernie Madoff fraud.” His e-mails, which kept coming, referred to “twits” instead of tweets and to Bloomberg’s outside law firm, Willkie Farr, as Wilkie Fart.
As I looked into how to get Wey’s vile material off the Internet, I saw that FNL’S business registration listed Holland & Knight, a respectable law firm, and a firm partner, Neal Beaton. That gave me some hope—maybe someone there would be willing to talk sense into Wey. I reached out through Bloomberg’s lawyers. The message came back—sorry, can’t help. (Holland & Knight says, through a spokesperson, “Our involvement with FNL Media was only in relation to the formation of the company in 2013.”)
I had no better luck with the companies Wey used to spread Blot posts. The site had a Facebook page, and Bloomberg’s legal team tried to get Facebook to remove references to me. No response. (The “RACIST” photo was in Theblot’s photo stream when I checked as I was writing this story. I reported it and got an automated response saying Facebook would remove anything “that doesn’t follow the Facebook Statement of Rights and Responsibilities.” It’s still there.) When I complained to Twitter that Wey’s account was abusive, I got a response from Twitter Trust & Safety, telling me Wey wasn’t violating Twitter’s rules and to block his tweets so I couldn’t see them. I sent in more examples of Wey’s tweets, and Twitter suspended his account. He was back in less than three weeks. Someone opened a Twitter account impersonating me. The only follower was Benjamin Wey. Twitter did block that one.
My husband was enraged and impatient: Couldn’t we
the Justice Department, taking hidden stakes through family members and front companies, then manipulating trading in the shares to benefit himself and his family. The indictment outlines how he allegedly took a cut of almost every transaction as he shepherded companies such as Deer Consumer Products and Cleantech to U.S. listings. He owned hidden stakes in the shell companies used for reverse mergers, which then became shares of the new entities. He hid these stakes in offshore entities, through which he parceled out stakes to friends and family to boost the number of shareholders to the threshold required for a Nasdaq listing. He also used these offshore entities to conduct fraudulent trading, at times artificially inflating share prices and then selling to generate millions in profits. He caused stock and profits to be transferred overseas through accounts in Switzerland and Hong Kong. (Wey’s Geneva-based banker, Seref Dogan Erbek, was also charged. He is at large.) The money returned to the U.S. and eventually to Wey, often, the indictment says, as nontaxable gifts to Wey’s wife, Michaela.
On Sept. 15, Wey pleaded not guilty to all charges. He’s also a defendant, along with his wife and several other people associated with NYGG, in a civil suit filed by the SEC at the same time as the criminal complaint. Wey and his wife haven’t filed a response in the SEC case and are seeking to have it stayed until the criminal case against Wey is resolved.
Wey is also battling lawsuits stemming from Theblot. A Georgetown law professor named Chris Brummer sued him in April 2015. Brummer had the poor luck to be an arbitrator in a Financial Industry Regulatory Authority (Finra) disciplinary action against two brokers who sold shares of Deer Consumer Products without disclosing to customers that they were paid consultants for the company. Deer was a client of Wey’s. Finra barred the two brokers from working in the securities industry, and Brummer was on a panel that upheld the decision in 2014. Stories on Theblot appeared promptly, pillorying Brummer as a fraud, calling him an Uncle Tom (Brummer is black), and accusing him of being involved in pump-and-dump stock schemes.
Wey responded to Brummer’s lawsuit with a motion to dismiss. It contends that Wey didn’t write the posts and that the suit is a “transparent attempt” to chill free speech, because no reasonable reader would interpret the articles as fact, rather than opinion. The motion notes that “it is undisputed that the Posts are available only on a sensationalist internet blog.” Preposterous though this might sound, especially given Wey’s regular declarations that he’s an investigative journalist, it appears to be designed to cloak Wey and Theblot in the mantle of the First Amendment and protected free speech.
Brummer wouldn’t talk to me, but one of his lawyers, Whitney Gibson, agreed to discuss defamation in the online era in general terms. Internet companies, he told me, are protected under a clause in the Communications Decency Act that says no provider or user of an “interactive computer service,” such as a website, a hosting company, or a search engine provider, can be held liable for third-party content. That allows companies to ignore the headache of arbitrating right from wrong and fact from fiction online, for the most part. It also leaves Brummer, and all of us, vulnerable to the likes of Wey, who disguised many of his attacks as stories submitted by anonymous readers. Decades into the Internet Age, there’s no surefire method to get defamatory material taken down if the person responsible for it is ready to put up a fight.
Earlier this month, Brummer’s lawsuit cleared a major hurdle: The judge ruled against Wey’s motion to dismiss and specified that Wey hadn’t shown the Blot articles should be protected under the Communications Decency Act. It’s a victory, though Brummer still has to prevail in the overall case— and in the meantime, the Blot articles stay up.
Almost everyone I contacted for this story, including Emen, Brummer, and others who’d been attacked on Theblot, chose not to comment, and I understand that decision. What’s the upside? I know what the downside is: more attacks. It took me a long time to decide to write about my own experience, because I just wanted to avoid any more interaction with Wey. But I did have to give him a chance to comment for this story, particularly on the origin of the Columbia “case study.” I e-mailed the lawyers representing him in his various legal battles, and in less than three hours, I got a 1,600-word response from Wey. This is just a piece:
“Howdy! Ni Hao! Hello! I am Benjamin Wey—your old friend. You know me well so let’s get to the point. I am an independent investigative reporter and I like Theblot Magazine ( www.theblot.com)—voice for the Voiceless, millions of readers a year. Investigative reporters are evaluating publishing new stories about you, your peculiar money entanglements with illegal stock short sellers (Roddy Boyd, Jon Carnes etc) as their bribed mouthpiece, your alleged extramarital affairs with a man calling himself ‘niu bi’—‘a cattle’s d---’—in Chinese on your own Twitter page, as well as your racist attitude towards the Chinese people. Because you just reached out to me again after two years of peace, you just did yourself a favor by reviving our interest in you. …
“You mentioned a non-published Columbia Business School research paper. I recall you and your sex partner Roddy Boyd collectively published a tabloid hit piece on this matter in 2013 in the NY Post. You said the Columbia paper was never published. Then how did you get a copy? How did you get hold of a draft Columbia University internal document? When and how did you hack into Columbia’s computers? How did you steal Columbia’s documents? Who else was involved in your theft? Come clean please so our readers can judge. How long have you been stealing documents from your employer? You know, theft is a pattern. …
“We have 18 more questions for you to answer. Each answer can be a separate, featured article. Dune, to save you time, let’s start with the above list. Okay? Our dealine for your answers is 5 pm, Feb 24, 2016. As it is said, ‘a thief remains silent’. If you do not respond, we will report to our readers such. …
“Donald Trump said the main stream media is full of dishonest people. I have to say I agree with him. You are one of those duckings feeling like some white swan. There is no swan lake in my life to dance around, okay? I know your tricks and how you ‘media’ people think. I am one of you, a fearless reporter and I have buckets and buckets of ink—more than you do. ”
I wrote this story because I have a platform to fight back. How can I, with the resources and reach of a global magazine, let him intimidate me? It’s my job to write about Wey. Still, I’m not looking forward to what’s coming next. <BW>