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25 Dec, 2023
câu nói nổi tiếng của "phù thủy" Jack Welch - ceo của GE, người đã biến GE từ tập đoàn sản xuất thành tập đoàn tài chính...
thực hiện 2 thay đổi quan trọng:
định hướng công ty theo quyền lực thị trường, chỉ ở lại/tham gia những ngành mà GE dẫn đầu thị trường,
sa thải hàng loạt rất nhiều cbcnv, ngay khi lên nắm quyền, sa thải gần 35.000 người, 1/10 số lượng nhân viên, qua hơn 20 năm là ceo, sa thải hàng trăm nghìn người...
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Easier Than Bending Metal
There’s a famous story about Jack Welch, who became CEO of industrial titan General Electric in 1981. GE was the pinnacle of American manufacturing. For much of the 20th century, its research lab was known as the “House of Magic” for the endless stream of inventions its scientists created and its workers built. When outgoing CEO Reg Jones passed the baton to Welch, he advised Welch that he was inheriting the Queen Mary; in other words, a ship designed not to sink. According to lore, Welch replied, “I don’t want the Queen Mary. I plan to blow up the Queen Mary. I want speedboats.” In many ways, he was talking about more than GE. Indeed, he sought to remake the whole arrangement that the corporate world had with New Deal-era America.
Welch was a trained chemist, but his legacy at the helm of General Electric – and across corporate America - was as a zealot advocate for financial engineering, the operational captain of the shareholder value philosophy engineered by Chicago School thinkers like Milton Friedman, George Stigler, and Robert Bork. Indeed, GE had always been a highly political institution. The firm was a big funder of Bork’s research on the origin of the Sherman Act, which led to his iconic book The Antitrust Paradox. And GE’s chief strike-breaker, Lemuel Boulware, hired and mentored a fading yet still iconic actor in the 1950s and 1960s, a former Screen Actor’s Guild President named Ronald Reagan.
Welch immediately made two important changes at GE. The first is that he reoriented the firm entirely around market power, recognizing in now-President Ronald Reagan’s revolution of the antitrust laws that monopolization was suddenly a legal business strategy. Welch decided that GE would no longer be in any line of business in which it wasn’t a market leader, tasking his internal managers who ran lagging divisions to consolidate, sell their divisions, or shut them down. He also focused on entering regulated industries like medical devices or TV where GE had market power, and to leave other industries – like consumer electronics – that required capital-intensive manufacturing.
Jack Welch, right, visits a GE manufacturing plant in GE’s birthplace of Schenectady, NY. In the first 15 years of his leadership, Welch slashed GE’s Schenectady workforce by 70 percent.
The second, and more noticeable change, was that he fired a lot of people. Almost immediately upon taking the GE helm, Welch slashed 35,000 of its employees, about a tenth of its workforce. He would fire hundreds of thousands more over the course of his twenty-year tenure, becoming known as “Neutron Jack,” named after a kind of bomb that killed human beings but left buildings standing. Welch railed against bureaucracy and “waste,” and claimed to be doing a favor for GE’s axed workers by letting them know early on in their careers that they didn’t belong, instead of waiting until they were too old to find other gainful employment. But really, Welch was playing a financial game. He was restructuring GE to produce financial value and de-prioritizing the production of tangible goods.
Welch’s most widely credited “innovation,” transforming GE from an industrial powerhouse to a financial powerhouse, was, like his insight on antitrust, about taking advantage of regulatory changes made by Reagan. In 1982, the Securities and Exchange Commission passed a rule allowing companies to buy back their own stock, which had previously been grounds for charges of stock manipulation. When companies bought back their own shares, the number of shares in the market went down, and their earnings per share went up. More importantly, because firms could time their purchases, this change allowed corporations to manipulate their stock price, and let executives compensated with stock cash out.
Throughout the rest of the decade, the shareholder-value advocates won the intellectual and political battle inside both parties. Few if any pursued shareholder value as effectively and relentlessly as Neutron Jack. By the end of the decade, he’d announced a record $10 billion in stock buybacks, stating that buying back the company’s own shares was “a far better way of generating returns than going out and taking a wild swing” on a new business line or acquisition. GE was becoming a financial firm. In the 1990s, it became the largest issuer of private label credit cards in the world. “I thought it was easier than bending metal,” Welch would say. By the 2000s, the company founded by Thomas Edison, inventor of the lightbulb, had begun sourcing its lightbulbs from Chinese contractors and branding them as GE products.
Welch is often seen as an important business leader, and he was. Indeed, he was an advisor to one of the original private equity firms, Clayton Dubilier & Rice, and large private equity firms are the most concentrated form of the heavily finance-friendly management pervasive in America today. Many of Welch’s proteges went on to lead other important firms, and his strategies soon pervaded corporate America. But Welch was also riding a policy trend in which American leaders explicitly sought to reorient our economy away from making things and toward pure financial returns, what is known as a “capital light” model.
source: BIG,
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