Jack Welch
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Summary
John Francis Welch Jr.s beginnings were humble. As a youngster, he was very competitive and pushed by his mom to be better than the best. After completing both his M.S. and Ph.D, he went to work for General Electric. Thats where the legend was born. He became Chairman and CEO of GE at the young age of forty-four. During his twenty years, brought GE through some tough times, and made it into the powerhouse that we read about today. Today, Jack Welch is a business legend.
Jack Welch
John Francis Welch, Jr. was born on November 19, 1935 in Peabody, Massachusetts. The only child of Irish-Catholic parents, John and Grace Welch, he attended Salem High School in Salem, Massachusetts. Jack was very competitive in sports during his school years. Jacks father was a Boston & Maine Railroad conductor who worked many, long hours. Therefore, Jack spent much time with his mother who was very nurturing and pushed him to perform beyond his dreams. Because of his mothers influence, Jack overcame his stutter – she told him he was so smart that the words would come out faster that he could pronounce them. He believed her and never let his speech impairment get him down.
In 1957, Jack received a Bachelor of Science degree in chemical engineering from the University of Massachusetts. Although he was not the brightest apple in the bunch, he was accepted into the University of Illinois where he received both his M.S. and Ph.D. degrees in chemical engineering.
In 1960, he was hired at General Electric as a junior engineer in Pittsfield, Massachusetts with a starting salary of $10,500. Welch was not pleased with the strict bureaucracy within GE or the standard $1,000 raise he received after his first year, so he decided to leave the company to work for International Minerals & Chemicals in Skokie, Illinois.
After much persuasion, Jack decided to stay at GE and by 1972, he was named Vice President of GE. He moved up to become Sr. Vice President in 1977 and Vice Chairman in 1979. In 1981, at the age of forty-four, Jack Welch became the youngest Chairman and CEO in GEs history.
During his first years as CEO, Jack shook things up at GE. He worked to make GE a more competitive company. He worked to dismantle the bureaucracy that made him almost leave the company and to eliminate inefficiency by trimming inventories. Welch also shut down factories, reduced payrolls, and cut lackluster old-line units.
Each year he would terminate the bottom 10% of his managers. However, he would reward the top 20% with bonuses and stock options. ) “At the end of 1980, GE had 411,000 employees and by the end of 1985, GE had 299,000 employees.” (Welch, Byrne) “By mid-1982, Newsweek magazine was the first publication to refer to him as “Neutron Jack,” the guy who removed the people but left the buildings standing. (Welch, Byrne) Through all of this GE was named ninth most profitable company in the Fortune 500 and the tenth largest.