At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit

529 Pages·1999·3.32 MB·English

by  Thomas F. O'Boyle

Acclaim for Thomas F. O’Boyle’s
AT ANY COST
“Rather than the stunningly successful executive we thought we knew, O’Boyle’s At Any Cost
presents a thin-skinned monarch who has destroyed a company and a culture in the pursuit
of short-term profit.… O’Boyle’s muckraking is impressive.”
—The New York Times Book Review
“Welch and the GE public relations department soon will be answering lots of queries if At
Any Cost is as well read as it deserves to be.”
—Detroit Free Press
“O’Boyle has made Welch the poster boy for modern capitalism and all the ills that
accompany it: downsizing, deal-making, ethical violations, pollution.”
—The Boston Globe
“A carefully documented, deeply researched, and impassioned indictment of a man, a giant
corporation, and a way of doing business at terrible costs.”
—Kirkus Reviews
“O’Boyle argues in this scathing examination of Welch’s tenure to date that GE’s growth has
come with a heavy price—especially to the company’s employees.”
—Publishers Weekly
Thomas F. O’Boyle
Thomas F. O’Boyle has been writing about business and management
issues since 1979. He covered U.S., European, and Asian industrial
corporations for eleven years at The Wall Street Journal. He was named
business editor of the Pittsburgh Post-Gazette in 1994. He lives with his
wife and three children near Pittsburgh.

FIRST VINTAGE BOOKS EDITION, SEPTEMBER 1999
Copyright © 1998 by Thomas F. O’Boyle
All rights reserved under International and Pan-American Copyright Conventions. Published in
the United States by Vintage Books, a division of Random House, Inc., New York, and
simultaneously in Canada by Random House of Canada Limited, Toronto. Originally published in
hardcover in the United States by Alfred A. Knopf, Inc., New York, in 1998.
Vintage and colophon are registered trademarks of Random House, Inc.
Photographic credits for section following this page: this page; Library of Congress/Corbis; this
page, this page, and this page: Schenectady Museum, Hall of Electrical History; this page Corbis-
Bettmann; this page and this page UPI/Corbis-Bettmann; this page, this page, this page, and this
page: AP/Wide World Photos; this page Bob Emmons The Library of Congress has cataloged the
Knopf edition as follows:
O’Boyle, Thomas F.
At any cost: Jack Welch, General Electric, and the pursuit of profit / Thomas F. O’Boyle.
p. cm.
1. General Electric Company—Management. 2. Electric industries—United States—Management
—Case studies. 3. Welch, Jack (John Francis), 1935–. I. Title.
HD9697.A3U555 1999
338.7’62138’0973—dc21 98-15011
eISBN: 978-0-30777323-4
Author photograph by Martha Rial
www.vintagebooks.com
v3.1
For Mae and Louise,
and in memory of Thomas E. O’Boyle
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
William Butler Yeats,
The Second Coming
CONTENTS
Cover
About the Author
Title Page
Copyright
Dedication
Epigraph
AUTHOR’S NOTE
PROLOGUE
1. MADE IN AMERICA
2. PASSING THE BATON
3. TOTAL WAR
4. THE BIG SWING
5. A CULT OF PERSONALITY
6. THE DEATH OF THOMAS EDISON
7. DEADLY DECEPTION I
8. DEADLY DECEPTION II
9. GREAT RIVER OF THE MOUNTAINS
10. THE TYRANNY OF NUMBERS
11. FROM PATERNALISM TO CANNIBALISM
12. TELLING THE WHOLE TRUTH
13. DIAMONDS AND DIRT
14. THE UNITED STATES OF AMERICA V. GENERAL ELECTRIC
15. THE RECKONING
16. THE SOUL OF A NEW MACHINE
AFTERWORD
A NOTE ON SOURCES
NOTES
ACKNOWLEDGMENTS
Photo Insert
AUTHOR’S NOTE
The General Electric Company is without doubt one of the most
fascinating and important institutions in twentieth-century American
society, and I have been fortunate to have had the cooperation of
hundreds of people in my investigation of it. Regrettably, however, Jack
Welch and a number of other company executives were unwilling to be
interviewed. I have made a serious effort to gain Mr. Welch’s input, to
give him and those others an opportunity to respond regarding the issues
and concerns raised in this book, but my requests have been unavailing.
Instead, I was referred to GE’s Corporate Public Relations office, which
to a responsible journalist is not the same as conducting an in-depth
interview. Regardless, I have continued to refine the book’s content and
to investigate and verify the facts. I have done everything in my power
to write a balanced and fair account of General Electric, gathering
information and viewpoints from as many sources as possible. I have
spoken to those who are fans of GE and Mr. Welch, and those who are
not.
PROLOGUE
J D of a lifetime. The General Electric Company,
EFF EPEW HAD THE JOB
America’s most prestigious and profitable corporation, had sent Depew
to Japan as its overseas emissary to run a subsidiary that sold $100
million worth of electrical goods annually in Asia and the South Pacific.
He was a thirty-something executive, president of GE Electrical
Distribution and Control Asia/Pacific Limited, negotiating deals with
people twice his age. A fast-track workaholic in a corporation with
hundreds of fast-track workaholics, he was in the express lane, having
raced through eleven jobs in nine years. Each new job had brought more
money, more status, more responsibility, more deals to be done.
Depew’s personal and professional lives had blended into a big blur.
He could no longer tell where one began and the other ended; his ex-
wife had said more times than he cared to recall, “Jeff, you’re married to
GE, not to me.” Depew couldn’t disagree because he was devoted to his
job and because he loved it. He got a jolt out of working for General
Electric, and the man reputed to be the greatest dealmaker in American
business, Jack Welch. Depew loved the shooting highs he got from
making deals. It may be hard to imagine anything less glamorous than
the prosaic electrical products that Electrical Distribution and Control
made, but ED&C, as it was called, had the same deep appeal common to
all of GE’s businesses—the opportunity to execute bold strategies and
global alliances. Depew was a geopoliticist, and making deals appealed
to his sense of international intrigue and high adventure. He loved the
strategizing, the finessing, the give-and-take. To him, doing deals was an
art form, like kabuki or bonsai, and doing them in Japan was even more
artful.
Depew was the type of executive who made Jack Welch smile: smart,
aggressive, confident, young. He had been hired in 1981, the same year
Welch was elevated to CEO and began the most systematic program of
change ever attempted in corporate America. Depew was anointed as an
acolyte, a high achiever, and a survivor as well. He went through
management boot camp with five other MBAs, all graduates of Harvard,