‘Hype, Hubris and Blind Ambition’

GE may have ‘brought good things to life’ over its 130-year history, but its rise and fall is a business cautionary tale for modern times

General Electric has a storied history and was the ultimate blue-chip stock. Electrical power pioneers Thomas Edison and Charles Coffin merged their enterprises in 1892 to become General Electric. The company grew into a household name, synonymous with everything from household appliances to jet engines to financial services, but 130 years after its rise, the huge conglomerate that was GE is being sold for parts. How and why this happened is the story bestselling author and financial journalist William D. Cohan tells in his new book, power failure: the rise and fall of an american icon (Portfolio). In this exclusive excerpt, Cohan describes his meeting with 20-year GE CEO Jack Welch—and Welch’s stinging rebuke of his successor, whom he blamed for GE’S demise.

it was at the exclusive nantucket golf Club in Siasconset (often shortened to “Sconset”) in August 2018 that Jack Welch, the octogenarian titan of American capitalism, invited me to lunch. We sat overlooking the ninth hole. Welch got around tentatively, with the help of either a cane or, as he called it, his “wagon,” a three-wheeled, triangular walker. He’d had health problems for years, starting when he had a heart attack and quintuple bypass surgery in 1995. In 2009, he spent

92 days in a New York hospital battling a staph infection; he almost died. Never a physically imposing man, he now seemed even more gnome-like, a big head atop a shrinking body. But his mind remained razor sharp. And his personality remained a mix of infinite charm and biting candor.

During his nearly 20 years at the helm of the General Electric Company, now known simply as GE, Welch became a legend. Welch made GE the most valuable company in the world, in the same rarefied league now inhabited—depending on the day of the week—by the likes of Apple, Amazon, Google and Microsoft, or a combination of them all. He also made GE perennially the world’s most admired company and himself the world’s most admired CEO, although there were a few years, early in his tenure, when he was deemed the most feared CEO, a label he doesn’t

quite understand, despite his willingness to be self-critical. At different moments in his career, he was referred to as Teflon Jack for his ability to sidestep blame for disasters on his watch. He was also referred to as Neutron Jack for a few years, after he gained a reputation for ruthless cost cutting, eliminating lots of people and expenses while leaving buildings standing. He hated that name, too. By the time Welch retired from GE, on September 7, 2001, he was hailed as the CEO of the century.

There Was Always Golf

Jack was already sitting at the table at the Nantucket Golf Club when I arrived. The staff was expecting me, and I was ushered immediately to his table. He ordered the same lunch he always does, apparently: a small bowl of tomato soup, with a side of oyster crackers, and two chicken hot dogs. When he was GE’S CEO, his lunch was always a turkey sandwich with lettuce, tomato and mustard on whole wheat. He drank a diet Slice. He used to work while he ate. “And he’s a fast eater,” said Rosanne Badowski, his longtime assistant.

Golf was one of the few constants in Jack’s life. One way or another, there was always golf. You could learn a lot about someone playing golf, he liked to say.

Matt Lauer, the now-disgraced former host of the Today show, recalled years ago the many times he played golf with Jack and how he had what Lauer described as “the mental wedge” when it came to the game. “He had a wicked sense of humor, razor sharp,” he told the now-defunct Talk magazine. “He loves to get in your head.” He remembered one time when Jack was on the opposing team in the foursome, Jack walked up to him as he was getting ready to tee off. It was an important