GE Ex-CEO Takes On White House Via Twitter Over Jobs Data

Ex-GE CEO Welch Leaves Fortune After Twitter-Post Backlash
Jack Welch, former CEO of General Electric Co., speaks at the World Business Forum in New York in 2010. Welch said, "This White House in this administration has not been friendly to business." Photographer: Craig Ruttle/Bloomberg

Jack Welch used his Twitter account to challenge the Obama administration over the surprise drop in the September U.S. unemployment rate, saying the data were manipulated for political gain.

“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers,” the former General Electric Co. chief executive officer said in a message posted immediately after the U.S. Labor Department reported that the unemployment rate fell to 7.8 percent last month, the lowest since President Barack Obama took office in January 2009.

The administration denied the allegation as baseless and defended the U.S. Bureau of Labor Statistics, which computes the figures. Alan Krueger, chairman of the White House Council of Economic Advisers, told Bloomberg Television that Welch’s remark was “irresponsible.”

Welch’s message snowballed as commentators and politicians weighed in on social-media websites and television to endorse or dispute his view. Welch, 76, a supporter of Republican nominee Mitt Romney, took aim at the figures that may matter most before Election Day on Nov. 6, because the October report due on Nov. 2 may be too late to change voters’ perceptions about the economy.

Welch’s own profile assured that his message would attract attention, and Twitter users had resent the comment 3,565 times as of 4:50 p.m. in New York. His success as GE’s CEO for 20 years through 2001 and as a business-book author has made him one of the nation’s most-recognized retired executives.

‘Ring Louder’

“His words ring louder than many others and that’s just the fact of life for a CEO, especially a well-known corporate icon type CEO that he has been,” said Peter Thies, a senior partner at Los Angeles-based executive search firm Korn/Ferry International.

Welch kept up the criticism during the day in interviews with the Wall Street Journal and Fox News.

With U.S. population growth requiring the creation of 150,000 to 200,000 jobs each month just to hold unemployment steady, the 114,000 new positions in September fell short of that, Welch told the Journal. He said he “wasn’t kidding” with his Twitter post.

Welch also questioned the household survey used to calculate the unemployment rate. That survey, which is separate from the sampling of businesses used to compile the job-creation tally, showed a monthly gain of 873,000 jobs.

Methodology Questioned

“The economy doesn’t feel like it added 873,000 jobs in September,” Welch told the Journal. “There are a number of things here that are open to discussion.”

He echoed that point in his Fox News interview, calling the jobs numbers “surprising.” Forecasters had expected the rate to rise to 8.2 percent from 8.1 percent in August, according to the median prediction of economists surveyed by Bloomberg News.

Welch is in meetings today and isn’t available for comment, said Rosanne Badowski, his executive assistant. She said Welch is the only one with access to the Twitter account.

Jen Psaki, an Obama campaign spokeswoman, declined to comment, as did Gary Sheffer, vice president of communications and public affairs at GE.

“No serious person would question the integrity of the Bureau of Labor Statistics,” Krueger said in the Bloomberg Television interview. “These numbers are put together by career employees. They use the same process every month. So I think comments like that are irresponsible.”

‘Really Ludicrous’

Labor Secretary Hilda Solis, whose department produces the employment figures, called Welch’s remarks “really ludicrous” in an interview on CNBC.

Romney campaign aides said they weren’t disputing the Bureau of Labor Statistics data, keeping their focus on criticism of Obama’s record.

“We’re going to address the numbers as they’ve been released,” Romney’s policy director, Lanhee Chen, said on Fox Business. “And I think what you see, as you’ve said on the show, is an anemic trend. This is not a real recovery.”

Welch, who has a home in North Palm Beach, Florida, has contributed $5,000 to Romney’s campaign, the maximum amount anyone can donate to a presidential candidate, according to the Center for Responsive Politics, a Washington-based research group that tracks political giving.

“In my lifetime, Mitt Romney is the most qualified leader I’ve ever seen run for the presidency of the United States,” Welch told CNBC in a January interview.

Initial Message

Welch posted a Twitter message last night broaching the idea that the jobless rate would come in at less than 8 percent, after staying at that level or higher since February 2009, the longest stretch since monthly jobless figures were first compiled in 1948.

“At 7.9 it would be Chicago and labor Sec in action,” Welch wrote.

That Chicago reference and the one today alluded to the city where Obama got his start in electoral politics and where his re-election campaign is based. Many of Obama’s political opponents over the years have criticized him for association with so-called Chicago style politics and its reputation for corruption.

Douglas Holtz-Eakin, who was chief economist on President George W. Bush’s Council of Economic Advisers in 2001-2002, said it wasn’t uncommon to have numerical surprises in the monthly Labor Department data.

“I’ve never been one of those who felt that the numbers get doctored,” he said on Bloomberg Television. “These are professionals. They do this as a career. I have a lot of respect for them. But like any other enterprise, every now and then you just get a weird number, and this one makes no sense.”

Obama Boost

Today’s report gave Obama a new chance to talk about how the economy is improving. A rate of less than 8 percent is “symbolically important” to voters, said Alan Abramowitz, a political scientist at Emory University in Atlanta. The rate had fluctuated at 8.1 percent to 8.3 percent so far in 2012.

Senator John McCain, the Arizona Republican who lost the 2008 presidential election to Obama, said today that he “wouldn’t put anything past this administration” when asked during a CNBC interview about Welch’s attack on the jobs data.

“I’m very questionable of what we do see coming out of this administration because the numbers don’t add up,” another Republican, Representative Allen West of Florida, told CNBC. When asked whether he was asserting that the administration manipulates unemployment reports, he replied, “Absolutely.”

As CEO, Welch earned the nickname “Neutron Jack” after cutting more than 100,000 jobs in the 1980s to help boost profits.

His successor, Jeffrey Immelt, was chosen by the White House in January 2011 to lead a panel of CEOs, labor leaders and academics charged with recommending ways to boost U.S. employment. The President’s Council on Jobs and Competitiveness delivered its report to Obama in January.

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