Jack Welch, once the most admired of chief executives when he ran General Electric Co., has given plenty of people reason to be upset with him in the last six months.
Among them has been his Mrs. of 13 years, Jane Beasley Welch, who filed for divorce after he had a much-publicized affair. There also have been GE shareholders, who felt aggrieved after learning of Welch's lavish retirement package, which included everything from the use of corporate jets to company-furnished flowers, wine and maid service.
But in the end, the person with the most complaints could rightfully be Welch's hand-picked successor, Jeffrey Immelt.
Welch's GE was praised to the skies. Immelt's GE is treated by Wall Street as a virtual has-been.
When Immelt went before investment analysts again last week to explain how he was fixing problems at the company and hoping to make the most of "a slow-growth economy," GE's stock hardly budged. It sells today at around $26, about half its price of two years ago.
There is, in short, a cloud of skepticism hanging over GE, as though its past success was not quite genuine.
In that respect, the Fairfield, Conn., company has become a microcosm for U.S. industry, reflecting widespread questioning of whether the gains of the 1990s were real or illusory.
The answer is that most of the gains of the past were real, and most of the promise of the future is, too.
But given the situation that Welch left behind, Immelt has his work cut out for him if GE is to rebound to the great heights it once enjoyed.
Under Welch, GE racked up heady gains in profit year after year. All the while, he preached the rigors of self-improvement to GE employees. Wall Street and the public ate it up.
Welch's success wasn't just built on hype, either. He was an extraordinary leader and a true business visionary.
But a large part of GE's success also was due to Welch's adroit use of finance. In particular, he made great use of General Electric's finance division, GE Capital Services, building it from a credit facility for home appliances into the largest unregulated bank in the world with $425 billion in assets.
GE Capital, because it enjoyed the privilege of GE's AAA credit rating, could raise money at the most favorable rates. (Only six other U.S. companies carry AAA credit ratings, according to Standard & Poor's.)
