Hit the Road, Jack
Jack Welch is looking rather satisfied these days. While retirement may prompt some of his rivals to reach for cashmere cardigans and a set of clubs, the former General Electric chief is busier than ever. The speaking engagements are pouring in. And J.P. Morgan Chase just announced he would become an advisor to Chief Executive William Harrison.
Welch has also signed up to become a leadership guru to several other high-level clients and was recently named special partner at a New York investment firm. Donald Gogel, chairman of Clayton, Dubilier & Rice, isn't quite sure what the former GE chief will do as a special partner, but he's just happy to bask in the "halo effect." Jack can do "as much or as little" as he wants, beams Gogel.
Meanwhile, his book, Jack: Straight from the Gut, is still leading best-seller lists. And that's despite a hiatus in hawking the tome because of the September 11 massacres, which happened to coincide with the first day of his book tour. If anything, the tragedy has added another element to the Welch mystique: political pundit.
At recent events in and around Manhattan, Welch was in fine form, pontificating on everything from the outlook for the economy to the merits of New York Mayor Rudy Giuliani. He recalls dubbing Giuliani a great leader back in March, when everyone else was focused on the mayor's infidelities and bullying ways. Rudy has "guts," and few things rank higher than guts in the Welch guide to greatness.
What worries him these days is that the terrorist attacks will prompt a rash of stupid moves. "We shouldn't use this to justify bloated and inefficient government," he told a group of journalists on Oct. 22 at the American Magazine Conference. Welch feels particularly passionate about this topic. He still can't get over the Environmental Protection Agency's decision this summer to make GE pay $460 million to clean up PCBs in the Hudson River. The rationale behind the belated cleanup isn't merely flawed, he says, "it's the most asinine argument ever presented by mankind."
With an attitude like that, who cares if Welch is now an executive without portfolio, having retired from the top job at GE on Sept. 7? This is a man named by several magazines, including BusinessWeek, as one of the best business minds of the 20th century. From his recent comments, it's clear he wants to get his fingers all over this century as well. A sampling of his latest thoughts: New York will take years to get back to where it was. The economic recession is now complicated by a psychological one. China is going to be an enormous threat that, he explains, "will make the Japanese threats of the '70s and '80s look like a water pistol." Things are going to be "brutal" in the emerging world in the next year.
BOOSTING BOOK VALUE.
If anything, Welch now has free rein to play the elder statesman. Even without the world's most valuable company at his disposal, he retains the aura of a VIP. At the magazine conference, organizers noted that "Jack's security people" had swept through the auditorium long before their boss showed up for his talk on leadership. "It's like the President's in town," muttered one attendee, looking at a well-dressed man with a GE badge suspiciously eyeing people in the lobby. Others are happy to get a shot at paying big bucks for a bit of Welch magic.
In the short term, though, there's a lot of pressure on Welch to pump up sales of his $30 book. He got a record $7.1 million advance from Warner Books for U.S. rights, which is co-written with BusinessWeek's John A. Byrne. He snapped up another $3 million for foreign rights.
To date, Warner Books executive editor Rick Wolff estimates it has sold between 200,000 and 300,000 copies. That's short of the 700,000 needed to earn back the advance, but Wolff remains very pleased. "For the first five weeks, this book had to sell itself," he says, pointing to Welch's disrupted marketing tour. "We figure it will have a very long run in hardcover." Then it will go to trade paperback, where less ardent fans can buy Jack at a cheaper price.
For Welch, having a smash bestseller is a matter of pride. He doesn't need the money. In fact, he's donating the profits to charity. But now that he's just shy of 66, the scrappy kid from Boston still has something to prove. It would no doubt bother him to hear that the Miami Herald called Jack a "disappointingly bloated, ponderous, self-aggrandizing tome." Then again, The Wall Street Journal and others have heaped praise on it.
To those who complain that Welch is insufficiently introspective about things such as his failed first marriage, he just sniffs. "I was writing a book about how to run a succession process," he told author Ken Auletta at an Oct. 18 breakfast sponsored by the Newhouse School. "I was not writing a book about how to get a divorce." Business-school kids love his book. The Irish love his book. Did he already mention that kids love it?
In the end, the book tour could simply be another way for Welch to woo the world with his particular brand of wisdom. He certainly remains one of the hardest working guys in business. Billy Griffiths, general manager at Borders bookstore in GE's hometown of Fairfield, Conn., marveled at the fledgling author's stamina during a recent appearance. "He signed books for five-and-a-half hours with no breaks," Griffiths says, adding Welch seemed to chat with every single person in line. "He's a real celebrity."
Not that Welch hogs all the credit for his former company's success. He claims that even Jesus Christ couldn't have run a conglomerate as diverse as GE without great people under him. Of course, Welch is the one who picked them. And it's clear that this corporate king isn't about to go away any time soon.
By Diane Brady in New York
Edited by Beth Belton