Ex-GE CEO Jack Welch Gives Current GE CEO Jeff Immelt a Performance Review

Henry Blodget | April 16, 2008 10:23 AM

jeffimmelt.jpgjackwelch.jpgWhat does former GE (GE) boss and straight-from-the-gut management superstar Jack Welch think caused GE's first quarter bomb? Is GE's model broken? (Common analyst conclusion.) Did the economy and "market disruption" cause unforeseeable problems? (Wimpy GE explanation.)

Hell no!, said Jack on GE-owned network CNBC this morning.

The problem is simple: GE CEO Jeff Immelt (Jack's handpicked successor). Jeff made a promise to deliver something, Jack roared, and, three weeks later, he failed to deliver it.

"Jeff has a credibility issue," said Jack. "He's getting his ass kicked."

See Also:
Welch: "Nonsense" That GE Should Sell NBC U
Pathetic GE: Blame Bear Stearns For Our Mess
Uh-oh: GE Blows Q1; NBC U Misses Too

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34 Comments

hollywdsign said:
Is it true?? Maybe "The Fed" told GE to issue a positive statement to ease the pain the financial markets were feeling.
Then three weeks later the facts came out.
Bill Rothschild said:
High Expectations and Surprising Yourself
During my 25 year GE tenure and my subsequent 23 years as a consultant to major corporations, I stressed two leadership tenets:
1. Set minimum expectations and always meet or even slightly exceed them. This demonstrates that you are credible and can always be counted on.
2. Never surprise your “key stakeholders”, especially customers and investors and most of all YOURSELF. This shows that you have done your homework and are prepared for uncertainty.
Last Friday, Jeff Immelt and his GE team violated both of these leaderships tenets.
In my recent book: The Secret to GE’s Success, I ended my 127 year strategic history of the company with concerns about Immelt’s ability to “meet high expectations and avoid surprises”.
I cited four concerns:
• Ability to “Go Big”, which was the theme of the 2005 annual report. In this area, I applauded his “missionary zeal”, but didn’t believe that he could grow organically, at a 8% compounded rate, because of the size and complexity of the company ( adding $14 billion of revenues each year and even a higher rate of earnings can’t be achieved forever… it is simply the “law of BIG numbers”).
• “Selling Solutions Globally” - highlighted the complexity of selling to developing nations, like China and India, who are not willing to “repatriate earnings and even nationalize companies” if they are too profitable and big.
• “It Always Takes Longer Than You Think”, focused on how difficult it is to get large, infrastructure orders and maintain strong competitive positions.
• “Maintaining a Strong and Deep Bench” focused on GE’s willingness to invest in people and even allocate a month of the CEO’s time to evaluating key people. When you have over 300,000 employees with a wide variety of cultures, religions and skills, this is almost impossible. GE has been and continues to be the prime source of executive and professional talent by headhunters and companies who have a “just in time” staffing philosophy.
Chief Executive Article. In June, 2007, I published an article in Chief Executive magazine, entitled: “Decision Time for Buffett and Immelt”, in which I contrasted the “GO BIG” simple approach of Warren Buffett with the complex approach GE’s Immelt. In this article, I stress three actions for Immelt to consider:
o Make the company less complex.
o Continue to Prune the Portfolio.
o Create “tracking stocks”- that would allow investors to invest in sectors of the company, while allowing GE to remain in control and one company.
Blogs on Amazon and Goggle. Since November, 2007, I have been writing a series of blogs, entitled GEWatchers, to keep my readers and clients up to date on what Immelt and his team are doing strategically and how their actions compare to what made GE successful in the past. These can be accessed on my site: www.strategyleader.com.

Bill Rothschild ( www.strategyleader.com )
S Hines (URL) said:
Immelt needs to unload NBC Universal ASAP! he loves being in the entertainment and media business but this isn't something GE should be involved in anymore. GE needs to get back to being GE.
ASL 3676 said:
Jack Welch is another member of the Straight Talk Express ala John McCain?
Welch is an ego maniac who thinks he's smarter than everyone else. Lucky for him the Media likes Welch like personalities....Big egos, empty suits.
marko said:
Both these CEOs suck. GE used to be a great American Corporation with reliable products and excellent scientists that worked on the Nimbus Program.

Now, it's a shell and a sham that outsourced work to China. Inferior products are produced by the Chinese working for dirt poor wages and American workers have lost good paying jobs.

And for what? So these CEOs and shareholders can become wealthy!! Shameful and disgusting!!
Javajonesn said:
Too funny.

Acquisition binges hide lots of problems Jack. Great timing heading for the exits to preserve your ego-driven image by throwing Immelt under the bus.

Not that anyoner should lose sleep for either of you.
PacificGatePost said:

The Welch ego notwithstanding, Amidst the gyrations, there is good news from the consumer....

http://pacificgatepost.blogspot.com/2008/04/ge-profits-drop-now-good-news.html

Evidently all is not doom and gloom.


Mark said:
Sounds like Jack might want his job back. Bill Rothschild might be angling for some work too. From my perspective, GE is/was a major player in getting us into and keeping us in Iraq and Afghanistan. They control the bulk of our popular media. GE hasn't done America or my kin any favors in a long long time. Let the jackals have them.
david hunter said:
Jack's the classic example of someone came along at the precise right time but thinks "I did it myself". Of course this was an accident of birth. Yes, he was a good manager, but this ego driven "wasn't I great" stuff is laughable. He did what any one smart would do, get the media on your side (or own it)and become chums with the image makers. He is now on the short list of folks most of us wish would just go away.
bilsemon said:
All that war and still no profit? No wonder Jack's kicking Jeff in the shins. I agree with those above who posit that Jack is a lucky a**hole who was in the right place at the right time with a modicum of talent. The rest was just timing.
Jay Kenney said:
GE lost its way when they started to make inferior products. I was a loyal GE person until after I purchased three GE appliances that had problems shortly after the warranty expired, (stove, refrigerator and microwave.) I will not buy any product from this company again until Consumer Report magazine tells me they cleaned up their act. Someday, these clowns in management who make millions of dollars will realize they also need to make quality and reliable products. I am not holding my breath on this one.
martscan said:
I've always considered Welch something of a fraud. Now he's proving it.
martscan said:
I've always considered Welch something of a fraud. Now he's proving it.
martscan said:
I've always considered Welch something of a fraud. Now he's proving it.
John Dace said:
Mr. Immelt along with upper management of NBC, need to be fired. Mr. Immelt, for no other reason, than doing business with Iran through a different country, and upper management at NBC, for pushing a far left agenda.
Ron said:
Remember, Mr. Immelt is the hand picked successor of Jack's, so if GE looks bad that makes Welch look like he picked the wrong guy to run his ship.
Ron said:
Remember, Mr. Immelt is the hand picked successor of Jack's, so if GE looks bad that makes Welch look like he picked the wrong guy to run his ship. And Jack does not like to look bad.
deroy said:
GE is running a scam.

in addition, immelt is al gore's caddy.
immelt needs to be required by the board of directors to do his job and quit circling the globe in private jets.
deroy said:
GE is running a scam.

in addition, immelt is al gore's caddy.
immelt needs to be required by the board of directors to do his job and quit circling the globe in private jets.
Aadi (URL) said:
beside all this Welch played very important role to make customers loyal to GE
but now the situation is opposite.......
Rolf Struemp said:
Mr. Immelt along with upper management need to be removed. I own several thousand shares of GE, and I did not recently vote for Mr. Immelt and his group of directors. Mr. Immelt and his cohorts do not deserve to run this formerly great organization. I worked for both Jack Welch and Mr. Immelt. Jack's only big mistake was selecting Mr. Immelt to take his place. Please Jack come back, and fix this mess Immelt has gotten us in. Mr. Immelt does business with our enemies. NBC is #4 of the TV networks, and far behind the programming of the other networks. Come back Jack, and don't appologize for your initial comments about Mr. Immelt, for I agree as a long time GE investor and former and retired employee.
Rolf Struemp said:
Mr. Immelt along with upper management need to be removed. I own several thousand shares of GE, and I did not recently vote for Mr. Immelt and his group of directors. Mr. Immelt and his cohorts do not deserve to run this formerly great organization. I worked for both Jack Welch and Mr. Immelt. Jack's only big mistake was selecting Mr. Immelt to take his place. Please Jack come back, and fix this mess Immelt has gotten us in. Mr. Immelt does business with our enemies. NBC is #4 of the TV networks, and far behind the programming of the other networks. Come back Jack, and don't appologize for your initial comments about Mr. Immelt, for I agree as a long time GE investor and former and retired employee.
Rolf Struemp said:
Mr. Immelt along with upper management need to be removed. I own several thousand shares of GE, and I did not recently vote for Mr. Immelt and his group of directors. Mr. Immelt and his cohorts do not deserve to run this formerly great organization. I worked for both Jack Welch and Mr. Immelt. Jack's only big mistake was selecting Mr. Immelt to take his place. Please Jack come back, and fix this mess Immelt has gotten us in. Mr. Immelt does business with our enemies. NBC is #4 of the TV networks, and far behind the programming of the other networks. Come back Jack, and don't appologize for your initial comments about Mr. Immelt, for I agree as a long time GE investor and former and retired employee.
Rolf Struemp said:
Mr. Immelt along with upper management need to be removed. I own several thousand shares of GE, and I did not recently vote for Mr. Immelt and his group of directors. Mr. Immelt and his cohorts do not deserve to run this formerly great organization. I worked for both Jack Welch and Mr. Immelt. Jack's only big mistake was selecting Mr. Immelt to take his place. Please Jack come back, and fix this mess Immelt has gotten us in. Mr. Immelt does business with our enemies. NBC is #4 of the TV networks, and far behind the programming of the other networks. Come back Jack, and don't appologize for your initial comments about Mr. Immelt, for I agree as a long time GE investor and former and retired employee.
Rolf Struemp said:
Mr. Immelt along with upper management need to be removed. I own several thousand shares of GE, and I did not recently vote for Mr. Immelt and his group of directors. Mr. Immelt and his cohorts do not deserve to run this formerly great organization. I worked for both Jack Welch and Mr. Immelt. Jack's only big mistake was selecting Mr. Immelt to take his place. Please Jack come back, and fix this mess Immelt has gotten us in. Mr. Immelt does business with our enemies. NBC is #4 of the TV networks, and far behind the programming of the other networks. Come back Jack, and don't appologize for your initial comments about Mr. Immelt, for I agree as a long time GE investor and former and retired employee.
Hemendra Jani said:
I echo the same feeling of Mr.Rolf Struemp being a former GE employee under Jack & Jeff both. Jeff managed the post 9-11 mess well but look at Jim McNeary who did do much better job at 3M and now at Boing so no question Jack screwed up in his choice of his successor. Mr. Jeffery Immelt should step down and GE board should appoint Jim McNearny as the new CEO of GE or Jack should come back and save us all who has so much of our life's saving invested in this great company.
nan said:
i 2 am a retiree. jeff's sole job is to improve the stock, he hasnt , so he either steps down or throw the bum out along with bush and his admin. elect barrack obama and give the young a chance, we old people sure have screwed this country up enough. It cant get any worse.
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noname said:
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janie (URL) said:
640-802 / MB7-517 / MB7-515 / 642-552 / 642-586 / 70-620Ex-GE CEO Jack Welch Gives Current GE CEO Jeff Immelt a Performance Review Just pretend I didn't say anything. My cell phone's out of batteries. My cell phone ran out of batteries.

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