On May 14, calls went out to investors and analysts: Less than two weeks after a May 2 angioplasty, General Electric Chief Executive John F. Welch had undergone elective triple bypass surgery to relieve blockage in three arteries.
Welch, the company says, is doing well following the procedure. The 59-year-old executive plans to return to GE's corporate headquarters in Fairfield, Conn., by mid-June and run the $60.1 billion company from home in the interim. He doesn't expect to retire until 2000. But the health problems have exposed a intriguing question at GE, a company he has remade and dominated since taking charge in 1981: What happens when the boss departs? There is no apparent successor to Welch; indeed, there is no clear-cut No.2 executive.
GE quickly turned away any questions of succession. Its board has a Management Development and Compensation Committee, staffed by five outside directors, to address such issues. "Obviously, in any well-managed company, the board has a plan, but nothing one is going to discuss at this time," says a GE spokeswoman.
STARS ABOUND. Within GE, the list of possible successors is long. Under Welch's mandate that GE be No.1 or No.2 in its markets, the heads of its dozen business units are already leaders in their industries, each running companies over $1 billion. "The people who reach the layer underneath the top at GE have to be outstanding executive talent," says John F. Johnson, chairman of headhunters Lamalie Amrop International.
GE Capital Services Inc., under CEO Gary C. Wendt, for example, is the world's most diversified financial-services house, bagging a third of GE's operating profits. Robert C. Wright has lifted operating income at NBC Inc. to $500 million from $200 million in 1992. W. James McNerney Jr., head of Asia-Pacific operations, is seen by many inside and outside GE as a fast-tracker.
Other contenders include Gary L. Rogers at Plastics. A hero of GE's manufacturing ranks, he instituted at Appliances many of the low-cost, high-output shop-floor techniques now followed throughout GE. Likewise, James W. Rogers, another up-and-comer, helped rebuild Motors & Industrial Systems through cost-cutting and outsourcing.
Given time, though, another generation of leaders may come to the fore. In six years, when Welch is slated to retire, many of GE's current business unit leaders will be over 50--at least five years older than Welch was when he took over in 1981. For now, few doubt that Welch will be as engaged as ever in his company. But that younger generation may be speculating a bit more about succession--even if the boss isn't.
General Electric executives with a shot at the top job
DENNIS D. DAMMERMAN, 49. CFO and a board member.
W. JAMES McNERNEY JR., 45. Heads Asia-Pacific. A fast-tracker.
ROBERT L. NARDELLI, 47. Runs Transportation Systems.
GARY L. ROGERS, 50. Plastics unit chief, turned around Appliances.
JAMES W. ROGERS, 44. Heads Motors after stints in aerospace, Power Systems, and GE Capital.
JOHN M. TRANI, 50. Heads Medical Systems.
GARY C. WENDT, 53. Runs Capital Services unit.
ROBERT C. WRIGHT, 52. Heads NBC. Used to head GE Capital.