Jack Welch: 'I Fell In Love'

Jack And Suzy Welch Tell Their Story To <B>Dan Rather</B>

Jack Welch, the retired CEO of GE, is one of the most successful corporate executives in the history of American business. And he is obsessed with winning, which happens to be the title of his new book, "Winning."

But over his long career, there have been some bumps in the road.

There's been criticism that he fired too many people, and that he was greedy for taking a generous package of retirement perks when he left GE.

And there was ugly publicity a few years ago, when he was still married, about his romantic relationship with a younger woman, Suzy Wetlaufer. She's since become the third Mrs. Jack Welch.

Welch sat down with to set the record straight – not only about his successes, but about the negative headlines as well.

What's the worse thing Welch has been called? "Neutron Jack," he says. "Hate it."

"I came into a company that had at least an extra 100,000, maybe 150,000 extra people. It was the early '80s. We were making television sets in Syracuse, N.Y., and the Japanese were selling them at the mall cheaper than we were making them," adds Welch.

"Now, it didn't take a genius to shut that operation down. And we took out lots and lots of people. And people started, the media labeled me Neutron Jack. It's awful."

"But not as awful as it was for the people who were let go," says Rather.

"No, we all had a tough go," says Welch. "Look, the worst thing a person does is fire somebody. Or lay somebody off. It's the most unpleasant moment of a leader's life. That's why people don't do it."
But in his new book, "Winning," Welch says bosses have to do it on a regular basis: get rid of the least productive, bottom 10 percent of their work force. Welch also spells out standards on how to reward top workers. He lists eight rules managers have to follow to be good leaders. And six other rules on how to be effective managers of people. But most important in the battle to win, Welch writes, is that employees have to be just as upfront as he is.

"At GE, you encouraged employees to speak up. To be candid," says Rather. "But what if I'm working at a place where they say, 'Let me tell you, if I say one word, I'm gonna get whacked.' What do you do?"

"That's a tough situation. But the facts are, that's one of the reasons I wrote this book is to get people to realize the value of candor," says Welch. "And we have to get that candor into the workplace. If people -- they can save so much time. They can become so much more competitive. Everything works faster and smoother. People are open, upfront. The team rallies around it."

He writes, among other things that "The world has its jerks. And sometimes, bosses are just jerks." So what if you get a boss who's a jerk?

"They'll find him. And in time, you know, if a couple of years go by and they don't find him, life is too short for you to stay," says Welch. "And you're a good employee. You either make your scene there and get moved out or you go somewhere else."

Has Welch ever been called a jerk? "Probably," he says. "But not that I know of."

By workers? "Oh, I'm sure," says Welch. "I'm sure."

Welch acknowledges the unions at GE didn't always love him, but stockholders did. Under his leadership, GE stock went up 4,000 percent, making it the most valuable corporation in the world at the time.

Even though he retired more than three years ago, the accolades for Welch keep coming in. Last November, The Financial Times published a special survey on the best corporations in the world. The No. 1 company was GE. "Love it," says Welch. "Love it. Love it. That really turns me on."

The newspaper also asked business leaders to pick historical figures, living and dead, they'd most like to have on their corporate boards. They chose Welch, Bill Gates and Winston Churchill.

GE stock made Welch a very rich man. He's worth hundreds of millions of dollars. And now that he's retired, he has more time to spend that money.

What does he indulge in? "You know, I never had a lot of things, so I'm a bit nouveau riche in terms of going to a hotel. I like great hotels, great sheets," says Welch. "I mean, silly little things. I don't like boats. I don't like buying airplanes, boats. I have no toys."

He didn't buy his new townhouse in Boston, either. He rents it, even the furniture. But Welch does like to live well. And his lifestyle became an issue when he was going through his divorce from his second wife, Jane.

There were ugly headlines accusing Welch of being greedy for the retirement perks he received from GE. He was no longer the CEO, but he was allowed to keep using company apartments and airplanes. Call it a golden parachute, but it landed him in the mud. The publicity wasn't pretty.

"The newspapers are filled with stories, 'Hey, this guy has perks all over the place. He took GE stockholders to the cleaners," says Rather. "Tell me your side of the story, because I've got to tell you, from reading the clips in the newspapers, pretty tough on you, Jack."

"Yeah. It was a moment. In 1995, I had a bypass. In 1996, the board came to me and said we want you to stay till 2000. Never had a contract," says Welch. "And they said we'd like to give you this enormous amount of stock. I said, 'I don't need stock. I'm going to stay. But I would like to keep what I have now: the plane, the apartment, the car, et cetera. And if you give me that when I retire, that's all I need.'"

No secrets?

"No secrets. Out there clearly, OK? File it with the SEC. Now I get divorced. My lawyers are meeting with my ex-wife's lawyers. What's the value of this plane, car, etcetera? So it becomes a big asset allocation issue," says Welch. "And my assets were now portrayed as retirement perks. Even though for five years, they've been disclosed as a retention contract."