Part Two: Jack Welch Is Why You Got Laid Off

Episode Transcript
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Speaker 1 (00:02):
All right, you sons of bitches, let's fuck this popsicle stand.
It's time for a goddamn podcast. How was that? Everybody good?

Speaker 2 (00:10):
You went right past blown all the way to fourth base.
Everybody happy with the popsicle stand? Yeah?

Speaker 3 (00:15):
Love it right now?

Speaker 1 (00:18):
Welcome to Behind the Bastards. Everybody, it's a podcast bad
people talk about them. M Yeah, it's a good time. So,
uh we should you know, let's let's talk about this
real piece of ship, this guy who sucked. Uh. Ceo
now of General Electric, Jack Welch. So about a year

(00:40):
into his tenure as CEO, Jack Welch gave a speech
by the way, my co hosts as as with the first.

Speaker 3 (00:47):
Episode, so impressive that you forgotten.

Speaker 2 (00:53):
The energy was incredible. It was I thought I could
sleep through this one. But hire Michael Sway happy to
be back for part two?

Speaker 3 (01:02):
Part two? Baby, well, I do want to get in
here again.

Speaker 2 (01:06):
Yeah.

Speaker 1 (01:06):
What should people know about your current projects?

Speaker 2 (01:09):
Abe? I did it in part one?

Speaker 1 (01:10):
You do?

Speaker 2 (01:10):
Yeah?

Speaker 3 (01:11):
So, basically, Michael and I are making an independent film.
It's based on the time that Michael's father came out
as a gay free will. Michael was like a teenager
and we both thought it'd be an interesting story to
show that like on film like as are coming of
age like sex comedy. So we wrote it and now
we're producing it. And you can help us by going

(01:34):
to seed Andspark dot com, slash fund, slash Papa hyphen
Bear and you can become a part of the movie.
You can, you know, they got tears there. You can
click on the buttons. And we're stoked Gray Rewards. Yeah, yeah,
we're stoked about telling the story. So if you can't
help us out, and you know, we'll make the film, right,

(01:56):
So that's why we're that's why we're here.

Speaker 2 (01:59):
No, no, no, we're here to catch up with Robert,
which is always a divine pleasure. Well not to, but
you're also right. Both things are true. And the only
thing I wanted to add is if you're not aware
Abe directed like most of the videos that Cracked, I
was over it cracked. If you know us from Cracked. Yeah,
so so like we can do it. I can say

(02:19):
with great confidence it'll be a good movie. I bet
Rober would even back us up on that. So check
it out over there where Abe said. And if you're
interested at all in that hook.

Speaker 1 (02:29):
Yeah, I am so excited for this movie. I think
I enjoyed your your your previous movie kill me now,
and I would like I would like you to get
another movie out. So listeners, help make my dream come
true by forcing Michael and Abe at gunpoint to make
another film. Yes, yes, daddy, yeah yeah. Hurt them, hurt

(02:53):
them for me. So back to the sentence I was
in the middle of when I realist I hadn't introduced you.
About a year into his tenure as CEO of GE,
Jack Welch gave a speech at a gathering of executives
in New York City. It was meant to be his
introduction to the company leadership, where he would present them
with his vision of the future and wrangle the most
influential minds in the country behind his plans, or and

(03:15):
get the most influential minds in the company behind his
plans for GE's future. His twenty minute speech was titled
Growing Fast in a Slow growth Economy, and it presented
a very Menichean view of the country's economic future. From
now on, companies would either be the dominant entity in
their market or doomed to failure mediocrity, which he defined

(03:36):
as not being first or second in the industry would
be seen as a death knell. He announced that if
GE couldn't guarantee itself that kind of dominance in one
of its many industries or businesses, and needed to sell
that business off or shut it down or otherwise prune
it away in order to focus on the things that
it could dominate. Now, one thing you might notice about
this is that, like as a consumer, theoretically, one of

(03:59):
the big benefits of can capitalism, one of the things
that set it apart from, for example, the Soviet Union,
is that customers would have like choice between a bunch
of different products. But Jack is saying, no, no, no,
fuck everyone who's not like number one or number two.
It's not worth being in that business. It's not worth
making a simple profit in order to like provide people

(04:19):
with options Like fuck that.

Speaker 2 (04:21):
Right, I do love I read a whole book on
this that I can't go into because it's your show.
But I love that he also is right that you
have to have a second one and how fucking simple
humans are because you're like, you're either someone who likes
to do what everyone's doing, or you're someone who likes
to be contrarian and not do what everyone's doing. So

(04:42):
you always get there's like Huggies and panthers or coke
and Pepsi. Yeah in everybody, Like that's as big as
our minds get. Is like I'm a sheep or I'm
an anti sheep. Those are the types of people that
buy things.

Speaker 3 (04:53):
Yes, anti sheep, anti sheep.

Speaker 1 (04:57):
This is why, famously, the one cultural reservoir our country
had of anti capitalist thinking was in those brave, heroic
souls who rejected the pepsi coke dichotomy and instead switched
to Doctor Pepper.

Speaker 3 (05:13):
Doctor Pepper's playing sea Baby, and that's when we got
soda perfection into Dr Pepper.

Speaker 1 (05:21):
So really it's very funny when I'm anywhere else in
the country, as I usually am now, but Texas, I
can like tell who's a Texan by when you go
out to eat, who gets a Doctor Pepper, Like if
you're at a failing to joint. Yeah, it's it's a thing. Uh,
No one else drinks it but us. The rest of
the country doesn't understand.

Speaker 2 (05:43):
Watching.

Speaker 1 (05:43):
But he's from Colorado, which is North Texas.

Speaker 2 (05:46):
That's true.

Speaker 3 (05:46):
I drink doctor Pepper. I think I also think diet
Doctor Pepper is the best version of diet that.

Speaker 2 (05:52):
I'm imagining, Jack Well hearing you talk about doctor Pepper
consuming doctor that's good, Doctor Wells.

Speaker 1 (06:02):
I'm gonna be honest with you both. I'm actually a
mister PIB man.

Speaker 2 (06:06):
Oh see, the.

Speaker 1 (06:09):
PIB makes a fine soda. Look, I love that we're
just doing free ads for soda. Hey, I tried to
get us back on track. It is it's good shit,
it is okay. PIB is just like excellency. Yeah. If
Jack Welch had his way, there would be no mister
PIB because it's too good a product to be number
one or two in its category. Right, This is the

(06:32):
kind of hell he wants for us, where there's only
pepsi and coke. That son of a bitch. So Welch's
goal at c S CEO, as he told the audience
in this speech, was to make GE the most competitive
enterprise on the planet. The steady growth that had made
it the bluest of blue chip corporations prior to this
was no longer acceptable. Welch had been inspired in this

(06:53):
by a number of articles in Fortune magazine analyzing famous
Prussian generals from the eighteen hundreds, and for so reason,
trying to use them as business gurus. This has been
like the last thing he read before giving the speech,
and it had a huge impact on like the way
he framed everything that he was doing.

Speaker 2 (07:10):
And the number one way business at time were written
is you're like, how did some guy four hundred years
ago who murdered and raped everyone he met doing it?
That's probably good?

Speaker 1 (07:20):
Well, it's funny because like that didn't used to be
the thing, like, especially if you go back to I
don't know, like the fifties and sixties and you were
to be like, we should take you know, our management
advice from from military leaders. Well, for one thing, most
of those guys fought in World War Two, and they'd
be like, you mean the idiots who like got all
my friends killed because they fucked up constantly. No, I

(07:41):
think I'm good. I don't think that's like the management
tactics I want. But by the time you get to
the eighties, none of these guys have ever done anything
in the world, and they're like, yeah, fucking you know
who's you know, who's a management guru? Helm with Van Moltka,
that's a guy who knows how to run a company
that makes light bulbs. The man who won the Franco

(08:04):
Prussian war surely has wisdom for me in our plastics business.

Speaker 3 (08:09):
Like that's the most like fraternity sentence I've ever heard.

Speaker 1 (08:13):
It's very funny. It's it's it's seeped in it and
again you could again you get. One of the other
things you can tell is that like none of this
generation of business leaders who are entrance by this stuff,
not only were they like too young to fought in
World War Two, but they were too rich to get
drafted for Vietnam because like, nobody who fights in Vietnam
is like generals, the guys who don't make mistakes. Yes,

(08:35):
I understand.

Speaker 3 (08:36):
It's the It's like the eye of the hurricane saying
like this is all right, this is fine.

Speaker 1 (08:41):
Yeah, let's uh, let's let's copy Let's what did west
How would Westmoreland run ge? You know, let's defoliate the
entire business, poison the office, kill everyone.

Speaker 2 (08:53):
I shall run this condom factory as if I tour Machiavelli.
You don't need to, that's no need to.

Speaker 1 (09:02):
I do kind of want to write a management book
that's like the Westmoreland Way, And it's just like the
applying the lessons of the Vietnam War to corporate success.
Yeah series, yeah, yeah, well why not? It could It
could work. So this is something that's starting to be
a big deal in the nineteen eighties. And I haven't
found a copy of the articles in Fortune that inspired

(09:25):
Jack Welch so much, but I did run across a
very recent article in the Harvard Business Review. We'll be
talking more about the Harvard Business Review a little later,
written in the early nineteen nineties, which was kind of
like the heyday for Jack Welch's CEO, that attempted to
draw business lessons from one of the same generals featured
in the Fortune article, a guy I mentioned a little earlier,
Helmuth von Moltka. Now the article also quotes Jack Welch,

(09:50):
which is, you know, interesting by this point in time
ten years later, not only is he like reading articles
about Prussian generals and their management tactics, but he's been
added to the articles about Prussian generals and their management tactics. Quote.
Moltke possessed two important characteristics that made him a superior strategist.
The ability to understand the significance of events without being

(10:11):
influenced by current opinion, changing attitudes, or his own prejudices
and the ability to make decisions quickly and to take
the indicated action without being deterred by a perceived danger.
The two characteristics support each other and apply to managers
and entrepreneurs as much as generals and national leaders. For example,
General Electric CEO Jack Welchis said, strategy follows people. The

(10:31):
right person leads to the right strategy. Now there's a
lot that's funny about that. Well, yeah, it's I mean,
first off, just nonsense. Like von Moltkett was not a
great general because he was great at like I guess
you could argue those were factors in his success. Another
factor is that Germany developed a kind of steel that

(10:54):
allowed them to make long range cannons that the French
did not have, and so they were killed that extremely
long range before they could close with their superior close
in rifles. But like, you can't really translate that to
ge strategy. Very well, that's what we need.

Speaker 2 (11:11):
Yeah, Also you get a very clear impression the Jaguaryalts
definitely at some point in his life, like turned to
his chauffeur, was like, you are my friend, You're my
best friend.

Speaker 4 (11:21):
Like this guy, Yeah, yeah, yeah, Moltka you know again
was a very good general.

Speaker 1 (11:32):
But it's also kind of worth noting that those who
seeve On Maltica as a business guru should be aware
that the men he trained, the generation of German commanders
who like were raised up in kind of his heyday
and like learned under him and were inspired by him,
were the guys who all lost World War One, destroying
the First Reich and much of Europe in the process.

(11:53):
So keep that in mind as we discussed the legacy
of Jack Welch, because oddly enough, the same thing is
going to happen now. One of the things that Welch
took from Moltka was the concept of total war. He
saw the business equivalent of this as being willing to
find profit wherever he could, even though things traditionally, even
through things that were traditionally outside of GE's wheelhouse. When

(12:15):
he delivered this wisdom in his big speech, the Wall
Street analysts in the audience were baffled, because this is insane, right,
Like people at the time were like, what the fuck
is he talking about? Like this is not like total
war means, I don't know, burning down villages and destroying
crops that the enemy can gain no sucker on them.
It doesn't mean like finding profit in every aspect of

(12:36):
your business. That's just running a business. Like what you're
saying is just warseship.

Speaker 2 (12:41):
Yeah, it sounds like you're saying, my new brilliant business
plan is I want money.

Speaker 1 (12:46):
What if we made money?

Speaker 2 (12:47):
Money? Oh, but I really want money.

Speaker 1 (12:50):
Yeah. It's like it's like if you had a general
come in. It was like, guys, guys, I got a
new plan that's going to blow this whole war thing
out of the water. What if we hear me out
here kill the enemy.

Speaker 2 (13:00):
However we can anyway you can as long as Yeah.

Speaker 3 (13:05):
I love the idea of him seeing like a little
kid with lemonade stands selling like fifty cent, you know,
like cups of lemonade, and he's.

Speaker 1 (13:13):
Like that little piece of that son of of my mine.
I could I will win all of commerce. Total war,
this kid, Yeah, total war, this little son of a bitch.
It's interesting. I read a book when I was a
lot younger. You know, the show Band of Brothers was
about an actual like military unit in the US Easy Company,

(13:34):
I think in the eighty second Airborne. I read a
book by like the unit commander who's the he's he's
one of the characters in the in the show, but
like by the actual guy. And there was like a
point in it, a line in it where he was like,
because I think he wrote it in like the eighties
or nineties where he was like, I keep seeing people
comparing like business to war and like using military metaphors

(13:54):
to talk about how company should be run, and I
find it will really off putting because like war is
just like a hinged savagery and people shouldn't people shouldn't
seek to emulate it in the other's fears of existence. Yeah,
very fun. Jack Welch does not feel the same way.
And I'm going to quote from The Man Who Broke
Capitalism by David Gels again.

Speaker 2 (14:16):
Here.

Speaker 1 (14:17):
One analyst asked how the price for copper would impact
earnings in the next quarter. What the hell difference will
that make? Well, shot back, you should be asking me
where I want to take the company. The speech was
a flop. As the analysts filed out of the ballroom,
one remarked, we don't know what the hell he's talking about,
because they want to know, like, so, you know, what
do you like, how is the business doing? How are

(14:37):
like what strategy I have like the costs of different
materials that we need gone up or down? You know,
like how are how ours like how is how are
our core like assets performing right now? And Welch is
like fuck that, I'm going to talk about war.

Speaker 3 (14:52):
Right It's crazy? How like this type of thinking? Like
any given day he could be like lotting the like,
oh we got a we got to like short the
system and create this like essentially new market that we
can scam that's the new hotness. And then yeah, the
next day he'll be like steady growth and like quality
products are the thing to do. It's like, who knows

(15:16):
what this guy's gonna He's just a child walking around
pointing at this is the strategy, I think.

Speaker 2 (15:21):
Yeah, And you can feel him setting the template that
I think a lot of modern CEOs follow, that is
just your job is to be a figurehead and give
speeches that are general about vision and direction and basically
just demand that the number go up, like your main
job is too.

Speaker 1 (15:37):
Yeah, and that's the like as a spoiler, where we're
heading here is that he's kind of running a con
and it's a successful con. It does make ge incredibly profitable,
But the reason he can't talk to these guys about
the business. Is that he wants to eliminate the business
part of GE because that's getting in the way of
making money. So today is the story of how he

(16:00):
did that. The first big campaign that General Jack had
to launch in order to remake GE in his image
was what he himself described as a campaign against loyalty. Right,
he declared war on the concept of loyalty within the company.
He defined this, well, we're talking about that. He defined
it as eliminating bureaucrats, but in reality, his layoffs were

(16:22):
more or less agnostic to function or performance within the company.
He fired good employees if they annoyed him. He once
shut down an entire department dedicated to long term planning
because long term planning isn't the kind of thing that
leads to short term earnings. Soon it became known that
the only way to advance under GE's new leader was
to fire as many of your own employees as possible.

(16:44):
True to his background as an angry man who never
learned how to compromise or experience consequences, Jack managed mostly
through screaming at people. There were some upsides to this.
He legitimately knew his business very well, and he would
tear his managers a new one if they didn't understand
their business as well is he. But it also selected
for people who would not question Jack and instead blindly

(17:04):
followed his commands. In nineteen eighty GE had four hundred
and eleven thousand employees. By the end of nineteen eighty two,
it had fired almost nine percent of its workforce, starting
with thirty five thousand employees and followed with thirty seven
thousand the next year. Often this meant destroying the economy
in small towns across the country. This is a part
of the process of the hollowing out of Middle America.

(17:26):
A good example would be Ontario, California, which had a
steam iron plant that employed eight hundred and twenty five people.
Though it was profitable, Jack closed it and fired them.

Speaker 2 (17:36):
All.

Speaker 1 (17:36):
Local civic leaders complained, but no one had the ability
to do anything. The year before Jack took over ge
net profits had risen by seven percent. It was the
tenth most profitable business in the Fortune five hundred. These
mass layofs were not necessary, but every Purge was met
with a surgeon. Stock prices that benefited shareholders. Newsweek compared

(17:57):
his strategy to the work of a neutron bomb, an
nightmare WMD built to kill all living creatures in an
area but leave infrastructure intact. They gave him the nickname
neutron Jack.

Speaker 2 (18:08):
Cool.

Speaker 1 (18:09):
Yeah, yeah, yeah, and he hates.

Speaker 2 (18:12):
You mentioned Jack Donnie being based on him, also Jimmy Neutron,
which I.

Speaker 1 (18:16):
Didn't yes exactly or it's heartening.

Speaker 2 (18:20):
I guess that people from Jump, or at least there
was some coverage that was like, yeah, this is going
to ruin everything.

Speaker 1 (18:27):
Yeah, he's destroying the destroying life. Yeah, he's killing life itself.
But they were doing it both as like there was
an element of criticism, but also like awe, and it's
it's fun because like Jack would always claim to hate
this nickname, and his autobiography he writes from the numbers,
you could make the case that there was either a
neutron Jack or a company with too many positions. I

(18:49):
naturally took comfort in the latter, but the neutron tag
still got me down. I was fortunate to find remarkable
support that got me through at home, in the office,
and in the boardroom. I'd come home obviously a little
down from the experience.

Speaker 3 (19:03):
Because he thought he was like being called a nerd.

Speaker 1 (19:06):
Yeah, it made him. It made him so sad to
be described as a weapon of mass destruction. And in
his autobiography he credits his first wife, Carolyn is helping
him through the dark like emotional period that this created. Carolyn,
in Jack's book, is always supportive of him, no matter
how tough the press or his job is. She always

(19:26):
ended a conversation with Jack. You have to do what
you think is right for everyone, which.

Speaker 2 (19:32):
Is how you know every single scene between them is
nothing like that's just the pr story period. Yeah.

Speaker 1 (19:39):
Yeah, there's another way you can know that, which is
that he divorces Carolyn in nineteen eighty seven, about five
years after this point in his In his story, their
divorce gets two paragraphs of mentioned in his autobiography.

Speaker 2 (19:52):
It's like we never spoke, but when we did it
was great, very not controversial. Then we got divorced for
no reason.

Speaker 1 (19:58):
Yes, she was my roster and then I left Derry.
You know, the divorce was a forbidden topic by his employees.
And there's there's very little you can actually find about
this first divorce of his. One of the very few
statements I found about it comes from a guy with
the very funny name Dick McLean, which you know we

(20:18):
all appreciate.

Speaker 2 (20:22):
If you do the comma reverse thing.

Speaker 1 (20:25):
Yeah, McLean, Dick McLean, Dick. That name is just like
washing my face in a cool stream. Yes, just perfect.
Thank you, Dick, Thank you once again. Uh. Dick was
an environmental consultant from GE's plastics division who worked with
a with Jack, and he told the La Times quote,

(20:45):
you never heard anything about his first divorce. It was
in everybody's best interest to make sure that it was
all tuned down. His private life was always what was
absolutely incredible, McLean said, but he declined to elaborate now.
McLean was being interviewed for this article in the wake
of Jack's second divorce to Jane Welch, the woman that
he left Carolyn for, which occurred in two thousand and

(21:06):
two after she found out that he had been cheating
on her with the editor of the Harvard Business Review,
who wrote that play praise worthy article that we quoted earlier.
So that's fun, that's ethical as shit.

Speaker 2 (21:19):
You love the seal.

Speaker 3 (21:21):
All of his friends, all of his coworkers are just
like they treat him like an ogre, Like he's just
an ogre. In the room that no one wants to
deal with. They're like, yeah, something's going on over there.
But man, I know.

Speaker 1 (21:34):
You don't want you don't you don't want to like
get Jack angry. That just makes everybody yeah, man, so yeah,
it's very funny when like MacLean heard about the fact
that he was his wife was leaving him because he
cheated on her with the Harvard Business Review, Lady MacLean
told The Times, my instant reaction was oops, checks back

(21:56):
to his old ways, babies untethered. So these purges, by
necessity killed the old ge. All these layoffs, the one
in which workers have been able to rely on the
company as a lifelong employer and rely on its benefits
to take care of them with their old age. Jack
called his campaign again to like He called the campaign

(22:18):
to like destroy any kind of faith people had in
Ge as a place where they could like stay. He
called this his campaign against loyalty. And it was more
than just firing people. He ordered his staff to avoid
using the word loyal in press releases, and he ordered
his underlings to stoke their workers with constant fear that
there might lose their jobs. To emphasize all this, he

(22:40):
wrote shit like this in his memos. The psychological contract
has to change. My concept of loyalty is not giving
time to some corporate entity and in turd being shielded
and protected from the outside world. Loyalty is an affinity
among people who want to grapple with the outside world
and win. What is that?

Speaker 2 (22:58):
What is I?

Speaker 1 (23:02):
Yeah, but I don't like it. I think he's saying that, like,
you know, I want the loyalty of like a team
of soldiers fighting an enemy. But it's like, well, part
of why soldiers are loyal to each other is they're
like protecting each other, and you're saying I want that loyalty,
but also fuck everyone who works for me.

Speaker 3 (23:18):
Right, Like it's it's just trying to sounds like it's
larger than it is. We all know what you're doing here.
You just need an excuse, And like, what are you
even trying to say with anti loyalty? Like what if
someone right now were to be like I don't think

(23:38):
this is a good idea. You would restructure that man,
you know like that there would be so much pushback
from him, So like, what is he He absolutely values loyalty.
He's hypocritical to a core.

Speaker 1 (23:54):
He values loyalty, but he's incensed by the idea that
loyalty might be a two way street, right.

Speaker 2 (23:59):
That he would, Oh, loyalty has right, that's right. Yeah,
He's like, that's what the money's for. I just need
full profit. Why can't I get full profit? Mommy, ed
g you were like a family, yea, and that I
have the legal right to abandon you in a snowbank
at any time.

Speaker 1 (24:16):
We're like a family in ancient Rome, where I, as
the patter familias, have the legal right to execute all
of you, right, jeezus. So the ultimate WMD in his
campaign against loyalty wasn't a neutron bomb. It was a
management strategy that Jacked helped to develop called stack ranking. Obviously,
pieces of this that existed, other people you know, had

(24:37):
come up with kind of some of these ideas. Jack
is like the first person to institute them. At a
major corporation, every year, managers were ordered to divide their
workers into three groups based on performance. The bottom ten
percent of the company was to be laid off every
single year. This meant that no matter how well a
division or the company did, people were always going to

(24:58):
get fired. And since managers were required to rank their employees.
Many of those layoffs would be adequate or good employees
who simply lost a political game. Stack ranking spread rapidly
throughout the country. Jacks peers saw that every wave of
layoffs brought the stock price up, so they copied him. Today,
HR software company Corvisio estimates that thirty percent of Fortune

(25:21):
five hundred companies stack rank their employees. In November of
last year, Amazon told managers to stack rank employees before
carrying out the largest layoffs in their history. Jack took
exceptional pride in how much he was copied. Some people
think it's cruel or brutal to remove the bottom ten
percent of our people. It isn't. It's just the opposite.

(25:41):
What I think is brutal is false and false kindness
is keeping people around who aren't going to grow and prosper.
There's no cruelty like waiting and telling people late in
their careers that they don't belong just when their job
options are limited and they're putting their children through college,
they're paying off big mortgages, which again, you might have
a leg to stand on a flag. You had a
policy if we only fire layoff people under a certain

(26:03):
age you know, to make sure that the young ones level.

Speaker 2 (26:06):
But like if you have what if you have a
unit of fifteen people and they're all good, and you're like, well,
you have to fire some anyway for no reason. Incidentally,
speaking of ancient Rome, this is where we literally get decimation.
Decimate is like the the practice of forcing the unit
to kill a tenth of the unit just so that
the rest will be stronger. This dinosode dates back very,

(26:30):
very far.

Speaker 1 (26:31):
It works.

Speaker 3 (26:31):
It works for a lot of stuff. You know, like
I cut off every year, I cut off like a
tenth of my body.

Speaker 2 (26:37):
I cut off one toe, Mike.

Speaker 1 (26:41):
You can learn all about this in my new book
Managing like famous Roman dictators Sola. You know, Sola, as
a general, understood that not only do you sometimes have
to go through town throwing your enemies off of a
cliff and so their bodies are dashed at the bottom
and eaten by crows, but you also need to go

(27:02):
gradually insane with age, get increasingly conspiratorial, and eventually retire
to a villa in the hillside where you have unsettling
sex with slaves for the last decade of your life.
You know, all of these management strategies.

Speaker 2 (27:16):
Right, the management version of that management version of that yeah,
which is how I run cool zone.

Speaker 1 (27:22):
You know it's it's it, It's great. Yeah you villa
from my villa where I where I have recently led
to a purge that forced the podcasting equivalent of Julius
Caesar to flee Italy and in order to avoid being
murdered for his loyalty to Guias Marius. You know that
all happened, but the podcast loyalty bad.

Speaker 2 (27:44):
There you are, I don't know.

Speaker 1 (27:46):
We got off topic here, so you got you got
off topic. The reality is that stack ranking often has
disastrous outcomes for businesses. One twenty thirteen study in the
Journal of Business Ethics found that ratings based performance reviews
like the ones Jack instituted quote often failed to change
how people work, and dissatisfaction with the appraisal process has

(28:08):
been associated with general job dissatisfaction, lower organization commitment, and
increased intentions to quit. Stack ranking is also generally recognized
to be incredibly toxic to morale, which has led some
of the companies that followed Jack to in the process
or the practice, as this quote from Fast Company makes clear,
after years of requiring managers to stack rank employees. Microsoft

(28:30):
workers cited the practice as the most destructive process at
the company. It leads to employees focusing on competing with
each other rather than competing with other companies, one employee
told Vanity Fair in twenty twelve. Microsoft asked the organization's
stack ranking system in twenty thirteen. The article also quotes
John Freese, a senior managing director at Encurrent Consulting, who said,

(28:53):
straight up, Jack Welch was wrong. This is a guy
we thought was incredible as a leader, but really he
led based on fear. Now, the fact that Jack was
was bad at his like the thing that was his
primary claim to fame, that it like actually doesn't work
very well and was in fact disasters for a number
of businesses, never stops people from following him.

Speaker 2 (29:12):
It's like, what happens with these guys, it doesn't matter.
It like no one collates the information to see if
their idea worked, and crazy.

Speaker 1 (29:21):
What's happening now? A lot of tech companies are adopting
it under the understanding like, well, it didn't work great
in Jack's day because like you were kind of relying
on managers and their subjective opinions about who was performing
well or not. But now with all these computers and algorithms,
we can shooes the best workers and then we can Yeah,
it's still bullshit, but you know it doesn't matter because

(29:45):
these people are too wealthy and powerful to ever face consequences,
which is why we need a thing that rhymes with
shmargtedgemush machination. But you know what else rhymes with that? Yeah,
products services. That's right, m Ah, we're back. I for

(30:11):
one loved those ads for untraceable poisons.

Speaker 2 (30:17):
I sharded in a pan for bacon. Is that what
you were trying to say on the other side of
the brim, that's right, and trying to figure it out.

Speaker 1 (30:23):
That that's what that's what will save us, Michael, That
nothing illegal, just that.

Speaker 3 (30:28):
So anyway, all the money that Jackie Boy earned, you know,
he paid two people to fight to the death in
front of him.

Speaker 1 (30:39):
Okay, but look, okay, I guess we're gonna deal with
this now. We're gonna like fight out this is this
has been an argument you and I've been having for years. Yes,
and I think it's very petty of you to bring
it up here, Like some people pay others to fight
to the death, for them. Okay, that doesn't mean you're
a bad person. You know, it just happened, No, he did. Well, yeah,

(31:00):
but who amongst us hasn't right? Who amongst us hasn't
been there yet?

Speaker 2 (31:04):
You know, I think it's telling that you're getting defensive
when Abe was really just neutrally stating it. That's what
I'm seeing here.

Speaker 1 (31:11):
Well, look, there's a lot of little mountain towns in
rural California where there's not much work and people will
do almost anything for seventy five dollars and a bottle
of oxy codone. And I don't feel like it's fair
to judge me for seeing if they could kill each
other with sling blades, like in that movie sling Blade.
And by the way, they can remember that movie sling Blade,

(31:34):
I do remember Slingblade.

Speaker 3 (31:36):
And to mention another movie, Jurassic Park, you were all
caught up thinking about how to do it that you
didn't think about whether or not you should do it.

Speaker 1 (31:45):
And that's the point here, I mean, don't do it, Robert.
I again, I just feel unfairly judged. But Jack was
not judged negatively for stack ranking people, and in fact,
the entire industry fell in love with the idea of
firing ten percent of their companies for no real reason,

(32:09):
but the fact that it made the stock market look good,
and it made the stock market happy for no real
reason because it didn't actually increase profits. It just meant
that temporarily companies had more money to put into things
like we'll talk about stock buybacks, to give out and dividends,
and that made shareholders happy. It didn't make the company stronger,
and in fact, over time it made them much much weaker.

(32:31):
But that was that was for future people to deal with,
not for fucking Jack Welch. So yeah. In his autobiography again,
Jack tries to dress this up as him doing a
kindness to his workers because if he shitcans them when
they're in the prime of life, being laid off, as
he says, just another transition. You know. He even describes

(32:52):
as like a charity that he's doing. I'm freeing them
from a job they're bad at, so then go succeed
somewhere else. Right, it's a social good. Now, the reality
is that being laid off, which is you know, some
firing someone not because they fucked up, because the company
wanted to do. Shareholder value is one of the most
stressful and traumatic things that Americans regularly endure. One study

(33:13):
found that it is the seventh most stressful life experience,
above divorce or the death of a close friend, and
that on average, it takes two years to recover from. Now,
that may seem a little crazy, especially the more stressful
than the death of a friend part, But there is Yeah.

Speaker 2 (33:29):
Yeah, if Abe died and and I got fired, I'd
be like, I need a job, dude.

Speaker 1 (33:34):
Yeah, yeah, you wouldn't be. You wouldn't be just searching
straight away for another a you gotta make rent right.

Speaker 2 (33:41):
And then yeah, I could save that grief for later.
Not that there's no grief, but that will come. I
need a job, yeah, yeah, a job.

Speaker 1 (33:48):
I have to be able to to fucking you know,
pay for my rent and various various gummy bears and
jujubis that I consume. So there is also just objective
of le a serious health cost to being laid off.
For healthy people with no pre existing medical conditions, if
they are laid off, the odds that they will develop

(34:09):
a new health condition raised by eighty three percent in
the year and a half after getting laid off. The
risk of yeah, it's significant the risk of suicide increases
by one point three to three times. Jack Welch laid
off more than one hundred and five thousand employees in
his first five years as ge CEO in the US.
At that time, the suicide rate was around thirteen per

(34:30):
hundred thousand people aged fifteen to twenty four. This means,
in crude terms, just in terms of suicide, we're looking
at like thirty or forty deaths somewhere in that neighborhood.

Speaker 2 (34:40):
I love this show. Imagine that your life. You're like
I me as a person, I made the suicide rate
in the country, Go up, I did that? Hey, hey
number go up? Hey if the planet suicide, yes, then
that's just listing Earth's stot, you know, suicide exchange. Yeah,

(35:04):
it's like me.

Speaker 1 (35:05):
You know, there's I think probably dozens of deaths of
suicides that we can associate to Jack's layoffs, which you
have to also like hundreds of thousands. Eventually, millions of
people are laid off because of these strategies over the
course of decades, because of the strategies that he helps
to pioneer. So again, that's quite a few deaths you
can lay at this guy's feet. You can also blame

(35:27):
him directly for some of the worst moments of my
childhood and some of the worst moments I'm gonna guess
for the in the childhoods and adult lives of a
lot of the people listening to this show who remember
like a parent getting laid off as part of a
yearly fucking layoff binge like this, and like coming home
to their parents, like weeping and not sure how to
like fucking pay for basic necessities and stressed out for

(35:49):
months on end. You know, the the shock waves that
this guy's decision makes in the lives of tens of
millions of people are kind of impossible to like adequately
want to. Yeah, yeah, anyway, I don't know. Again, untraceable
poisons go to untraceable poisons dot com. Use promo code
Jack welch uh and I don't know, find someone talking

(36:12):
about fucking the stock market and put it in their drink.
That's that's the behind the bastards. You, yeah, untraceable poison
study to you. Yeah. So it's interesting to me that
Jack wasn't content just being a cool mister Burns style

(36:32):
corporate psychopath. He repeatedly pushed the line that he was
doing because mister Burns was just like, you fire workers
because fuck them right, because you're because it's fun.

Speaker 2 (36:43):
You know, I know, I don't care.

Speaker 1 (36:45):
Jack was like, no, I'm doing a kindness to them.
This is what's best for them, it's best for all
of society. Really, his speech writer, the guy who was
like his speechwriter, a ge later explained in an interview quote,
Jack loved the approval of Wall Street, but the Irish
and him craved the approved an affection of the divested
employees as well. He wanted to believe they were thrilled
at being divested. Oh boy again, but.

Speaker 2 (37:08):
Irish people love wearing vests, real waistcoat culture. Now I loved,
But like, what a weird, dated way to like the
Irish in him, you know what I mean, the poor
people inside of him.

Speaker 3 (37:25):
I know, I know he's just a bastard, and I
don't have that much sympathy for the devil, but I can't.
Everything you tell me doesn't make me more angry because
I know all this stuff exists. It makes me sad.
I'm sad for Jack, like because he so much of
him is like it's so important to him that he's

(37:45):
liked and that he like everyone thinks he's a cool guy.

Speaker 2 (37:49):
Yeah, it's just so sad.

Speaker 1 (37:51):
Kind of what it just it leads to is his
colleagues the other people in like higher oppositions, a ge
engineering a situation by which he thinks that he's liked
by employees because obviously he is not. People will talk
about like it used to be fun to work here.
I used to feel good about coming into work. I
hate it now I'm miserable all the time. You've turned

(38:13):
this place into a hell.

Speaker 2 (38:15):
I'm leaving to join the crew of the Ellen Degenerous Show.

Speaker 1 (38:19):
Yeah, yeah, exactly, so I could finally get some respect. Yeah.
So I also think, you know, it's possible that this
speech writer is himself kind of misled, and Jack maybe
did not care nearly as much as this guy thinks
about what employees felt about him. Because Jack also had

(38:40):
a reputation for using kind of the language of warfare
and violence to describe layoffs. He was known to when
he would do like his tours of different business units
and stuff, he would mark workers out for firing by
saying they should be shot, shoot them, or they ought
to be shot, all of which meant lay that person
off right now, which is like, that's like psycho shit.

Speaker 3 (39:03):
Yeah, it's doctor Strange lives. Yeah, you know, like everyone
like Patten. My favorite guy in the world is Paton.

Speaker 1 (39:11):
Yeah exactly.

Speaker 2 (39:12):
And then the fucking goal. The move that I always
hate the most is why don't people like me? Fuck
you dude?

Speaker 3 (39:20):
No, absolutely, absolutely, But it's so sad when it's like
when you just hear of it, because now I'll you know,
Robert did this because he made us think about the
boy first. Yeah, you know, I don't have what you're having.

Speaker 2 (39:33):
I have no.

Speaker 1 (39:35):
Yeah, I will say in terms of Patten, Patton had
one experience that I think would have improved Jack Welch.
He was shot several times by a machine gun, and
and really I think that that that, you know, we
could have tried it out, is all I'm saying. You know,
it might have helped.

Speaker 2 (39:51):
If you're gonna lead with fear, maybe have a little
in your own life. Yeah, at least a little.

Speaker 1 (39:56):
You should have seen the machine gun though, so so,
since you can't lay tens of thousands of workers off
without causing problems, Jack also embraced another strategy that was
about to become vogue in corporate America, outsourcing he was
famous for saying shit like, don't own a cafeteria, Let
a food company do it. Don't run a print shop,

(40:17):
Let a printing company do it. What this means is
that he fired janitors and security guards and food service workers,
and then he brought in low paid temps who were
in contracts with outside companies to do the same thing
that had previously been done by people who had a
decent standard of living and a pension. Right, That was
the whole point is like, well why would we And

(40:38):
one of the things this does is it creates for
the first time at these big companies like GE, there's
different tiers of worker Before at GE, you know, your
best engineers and the people at the cafeteria are all
GE employees, right, they all you know, they get different
compensation obviously, but they're all they're all on the company
health plan, they all have a pension, they all have

(40:59):
life insurance. Now you've got this second class of human
being in all of these GE facilities who are basically
on the verge of collapse at all times because they're
not being taken care of by their employer. And the
United States has no social welfare system. And of course,
again you can't. One of the things I'm probably not

(41:20):
getting into enough here. You can't separate anything that Jack
is doing from the fact that this is the Reagan era, right,
A lot of like what he's able to do is
because of rules about how corporations are allowed to behave
get loosened and we'll talk more about that in a
little bit by the Reagan administration. And so all of
these workers who are being let go and all of

(41:42):
these temps who are being brought in are benefiting from
less social welfare programs than people had previously, because you know,
the Reagan administration is cutting that at the same time
that Jack is cutting these people out of general electrics,
you know, corporate welfare system. So another thing that Jack
pioneered was offshore.

Speaker 2 (42:02):
And mention Homer's Yes, Oh, I was just gonna say,
mentioned Homer Simpson. And it is striking me now how
it's just the dumbest possible way to go about Like
it's not even like he's pretending to play forty chess.
It is not a sophisticated thought. It's very much like

(42:23):
when Homer is a garbage man and his motto is
can't someone else do it? And you just say that
like it's brilliant and it's really not.

Speaker 1 (42:33):
Yeah. Fuck, certain people just.

Speaker 3 (42:37):
Have confidence apparently it is his superpower and be angry
a lot.

Speaker 1 (42:42):
Yeah. I mean that that is like the only real superpower.
You know, Like people who are into like the occult
and and and magic and stuff like talk about the
fact that like real like like the like what magic
actually is is kind of like the the utilization of
like will in order to change the world, right, And

(43:05):
I think the clearest example of that is not like,
you know, wizard guys like Alan Moore, It's guys like
Jack Welch. This is this is a powerful dark wizard, right,
He's using pure willpower, pure self confidence to remake the
world in his own image, to do a thing you
shouldn't be able to do, To destroy a company's ability

(43:25):
to profit, to destroy all of its business, to destroy
its it like the creation of things that previously like
made it great, and replace that purely with this illusion
that is somehow more profitable than the thing that actually
produced items of value.

Speaker 2 (43:42):
That's like a virus until every other company also operates
that way. It's quite something.

Speaker 1 (43:49):
This is. And by the way, when we talk like
in terms of like fantasy authors who understood this about magic.
This is exactly how Tokein conceived of it, more or
less right, Like this is Saamon, you know, like that's
happening here. Yeah, anyway, cool shit. So Jack pioneered offshoring
the process of moving production facilities and jobs to companies

(44:12):
with looser labor laws and lower minimum wages. During speeches
and interviews, he often set variations of this line. Ideally,
you'd have every plant you own on a barge to
move with currencies and changes in the economy. And he's
going to like move ge to have its corporate headquarters.
But I think it's the fucking Bahamas or something like
he's one of the first guys. He does that too.

(44:32):
But again, like there was this attitude in the previous
era by a lot, not all, but a lot of
like executives that paying taxes to like support the country
functioning was one of your jobs as like a business
you know leader. And Jack is like, no, no, no,
we have to hallow this country out. And part of
what that means is like making sure we have no

(44:54):
responsibility to the United States whatsoever. He helps lobby the
Reagan administration for like an change in business law that
basically means like you can kind of by shifting like
technically where products are being moved through, you can pay
taxes in different companies. It's I don't need to get
into the specifics of it, but like one of the

(45:15):
things that does is that suddenly a huge amount of
GE's biggest transactions are technically legally occurring in Ireland, which
has a very very low tax rate. For that sort
of thing, It's it's cool shit. So Jack was not able,
obviously to literally put all of his plants on barges
to move them around the ocean, but by moving jobs

(45:37):
out of the country or just to parts of the
country without as many unionized workers, he was able to
break the back of the unionized workforce that had helped
make GE a powerhouse. Jack was also one of the
first CEOs to outsource to India, and as the GE
stock price continued to outpace the market, more and more
of his colleagues followed him. One of the few aspects

(45:57):
of GE that Jack had any actual love for was
the previously minor finance division. We talked about this a
bit in Part one, but this is what actually made
it all work. I'm sure the question that a lot
of people have right now is like, well, but you
say the company kept making more money, So was he
maybe just actually doing a good thing that you didn't like.
And my argument would be no, because the reason that

(46:21):
GE's balance sheet looked good, that it looked like profits
were increasing, and that the stock price kept increasing is
that Jack understood how to use this finance division as
basically like to create a fog of war around the
internal company functioning that looked really good to people on
the outside because he was able to kind of manipulate

(46:43):
the balance sheet. Right, So what he was doing is
using this finance division to buy up new businesses rather
than like R and D and develop anything of its
own that looked like they would be profitable. And at
the same time he would sell off businesses GE had,
many of which were still profitable because it would bring
in these swift, short term profits. And by kind of

(47:04):
mixing these sales of business units with purchasing business units,
he was able to ensure that the balance sheet kind
of said whatever he wanted it to say, so he
could say, at the end of Q one, these are
where our numbers will be, and then he would just
buy and sell companies until the numbers matched that, and
so do the people on Wall Street. It looks like, oh,
you know, GE's like hit its numbers again. That's great.

(47:26):
But what's really happening is he's just kind of like
shuffling shit around in order to make it look like
he still has a business that's producing something. A good
example of this would be in nineteen eighty five, Ge
purchases RCA, which Jack justified to Congress because they have
to have like an antitrust hearing over this by saying
it would let an American manufacturer compete efficiently with a

(47:49):
Japanese manufacture. But he didn't do this instead of trading
the entire Instead, he traded so he like buys this,
being like this will be good, this is worth you know,
it being kind of bad for competition because it will
decrease prices and provide a better product for Americans to
buy that they'll buy instead of Japanese products. Right, But
instead of actually making like shit with the TV division

(48:13):
that he had bought, he sells the TV manufacturing division
to a French company and exchange for a medical device business.
One of the only things he actually keeps from the
rc sale is NBC author Barry Lynn writes in Two Strokes,
Welch remade multiple world spanning industries. The rationalbehyde is moves
with simple concentrate power, avoid direct competition with firms backed

(48:36):
by mercantilist states as Japan's electronics companies were, and focus
on industrial activities that could be protected through interaction with regulators.
The medical device business or the pentagons because RCA has
a defense business that he also keeps, so he's not competing.
He's not interested in providing a product. What he's interested
in doing is kind of like using GE's financial power

(48:59):
and the fact that they can get loaned money to
buy and sell pieces of the company in order to
optimize how it looks on paper.

Speaker 2 (49:07):
Right.

Speaker 1 (49:07):
The interesting thing to me about this is that the
division that Jack traded to get, like this medical device division,
doesn't make a profit. In fact, it's a disaster. After
he acquires this business, its profits collapse and the division
goes bankrupt effectively enough, But this doesn't actually hurt Ge
or Welch's reputation like it seems like a disaster. We

(49:28):
bought this company, we traded away its best assets for
this medical device business, and then that business fails. That
seems like something that should get you in trouble, But
the stock price still went up. As David Gel's writes,
what mattered and what Welch had achieved with the RCA
deal was making GE bigger. GE's television set business was
now one of the largest in the world, fulfilling the

(49:50):
mandate Welch laid out at the Pierre Hotel in nineteen
eighty one that every group should be number one or
number two in its category. So in all of these
tactics mass LFS, outsourcing, offshoring, high speed trading of corporate assets,
Welch set precedents that his CEO peers couldn't wait to copy.
And I'm going to quote now from an article by
Matt Staller. By the two thousands, the company founded by

(50:13):
Thomas Edison didn't even manufacture light bulbs, sourcing them from
Chinese contractors and branding them as GE products. Other leading companies,
such as General Motors followed Welch's path. In the mid
nineteen eighties, GM bought both Electronic Data Systems and Hughes Aircraft,
attempting to diversify away from the auto industry in which
it was set up against foreign competitors backed by governments

(50:33):
into regulated industries with government contracts. What it couldn't do
by diversifying, it did by offshoring, moving production to low
wage areas like northern Mexico. Starting in the early nineteen eighties,
the steel industry did the same thing. US Steel bought
not only Marathon Oil for six point three billion, but
three paid three point six billion for Texas Gas and Oil.
National Steel bought United Financial Corporation of California, and another

(50:56):
steel company, Armco, went into insurance. Meanwhile, in nineteen eighty ses,
the Reagan administration's Commerce Department invited thirty eight thousand American
companies to a trade fair in Acapulco explore it and
encouraging them to explore moving factories to Mexico. So again,
Jack is not the only guy doing this. He's not
the inventor of this concept, but he proves that it's

(51:19):
incredibly profitable. He basically shows these companies you can build
and maintain a business that makes things, or you can
be in the business. You can basically turn your company
into like a balance sheet from a fin like a
finance company, right where you're buying and selling assets and
you're not in any particular business as much as you're
in the business of shuffling around these assets, and that

(51:42):
way it's really easy to do something like, oh, we
made an extra billion dollars this year, so let's sell
off this business that's not doing as well and like
claim that as a loss, and then we can kind
of offset our tax burden. It'll like, yeah, like all
this kind of like fuckery you hadn't been able to
do before Jack realized. Is that kind of by turning
your corporation into a big unlicensed bank, that's a much

(52:05):
smarter idea than actually producing anything of value.

Speaker 2 (52:10):
I mentioned magic and Dirk Wizards. I would say it's honestly,
he's less like Saramon because his magic actually does change
the world, and he's more like a stage magician or
a David Blaine, where he's just like it's sleight of hand, right. Yeah,
he's drawn attention away from thoughts like what does this
business do or make is it useful, and drawn it
to you don't have to worry about that. The number

(52:32):
was forty now it's forty one exactly two.

Speaker 1 (52:35):
Yeah, yeah, it's something else. By the mid nineteen eighties,
Jack Welch was the most celebrated CEO in the country
in a lot of ways. He's one of like the
very first celebrity CEOs of the modern era. He's the
subject of fawning profiles and business magazines for his brilliant
leadership and his unprecedented stock market success.

Speaker 2 (52:54):
And it's all stills him. And he was happy, and
he could stop.

Speaker 3 (53:00):
Michael never cried.

Speaker 1 (53:02):
He's about to get a little sad because right about
this time in nineteen eighty four, Fortune magazine declares him
the toughest boss in America. And they don't mean this
as a compliment. They write, Welch conducts meetings so aggressively
that people tremble. He attacks almost physically with his intellect, criticizing, demeaning, ridiculing, humiliating.

(53:23):
In The Man who Broke Capitalism, David Gellis goes even further, quote,
Welch was, in short, a bully. You fucking guys don't
know what the fuck you're doing, He fumed at executives
in the plastics division when they miss their numbers. It
was what The Wall Street Journal described as Welch's hazing
as shouting match approach that requires managers to argue strenuously
even if they agreed with him, said one manager whom

(53:44):
Welch replaced. You can't even say hello to Jack without
it being confrontational. If you don't want to step up
to Jack toe to toe, belly to belly and argue
your point, he doesn't have any use for you. In
his autobiography, Welch calls this Fortune article that describes him
as a bully one of the worst moments of his career.
He's like, it's so but it like again, I think
he's just full of shit because he knows he should

(54:06):
say that, because this has no impact on his behavior.

Speaker 2 (54:10):
His soul is.

Speaker 1 (54:11):
Other than this hus He maintains a chip on his
shoulder regarding journalists for the rest of his life. He
had initially been thrilled to acquire NBC and he specifically
he says he was excited because it meant he'd get
to write paychecks for guys like David Letterman who were famous.
But then he yeah, it's very very that child, Yeah, yeah, yeah, silly.

(54:34):
But Jack also he gets very frustrated because he realizes,
like owning a news company doesn't mean you can force
the news division to report on things the way you want.
So in nineteen eighty seven, we have this thing called
Black Monday, which is like one of our many great
market collapses, and Tom Brokaw gives a report on the
nightly news about how bad the damage was going to be.
Right where he's talking about like this is not just

(54:56):
one bad day, like this is going to continue, echoing
this is a serious problem. Welch calls the head of
NBC's news division and complains, you're killing all the stocks.

Speaker 3 (55:07):
Yeah, what do you do you think that he ever
like had stopped, and he's like, maybe I will. Maybe
RoboCop the Villain is based.

Speaker 1 (55:16):
Yeah, maybe maybe Paul Verhoeven read a profile of me
and immediately made RoboCop am I.

Speaker 3 (55:24):
All of America's satires focus like he's just the all villains.

Speaker 1 (55:31):
All the cartoons are about me, Like, yeah, it's it's
it's something else. It's very funny too, because the head
of NBC's news division, when he's like you're killing the stocks,
you have to stop him is like it just says,
this is not a thing I am willing to talk
about with you, and end's the call.

Speaker 3 (55:47):
You'll never get me.

Speaker 1 (55:51):
Uh yeah, So this is not going to be the
last time that Welch has a competitor or a fight
with his journalists, and it's not going to go as
well the next time. But we'll get to that in
a little bit. In nineteen ninety three, Jack goes through
one of his regular mass layoffs and reappointments of talent
and producers at NBC. He picks a new manager for CNBC,

(56:13):
his business news channel. You want to guess what this
guy's name was, Come on, come.

Speaker 3 (56:19):
On, dick, no dicks, slurpy McLean.

Speaker 1 (56:24):
I'll give you a hint. He's a sex pest. I'll
give you another hint. He helped break the United States.

Speaker 2 (56:33):
Break it.

Speaker 1 (56:34):
It's Roger Ails. I was like, you have to be
more specific. This is the guy who starts Roger Ales
his career.

Speaker 2 (56:43):
Isn't it wild that sex pest narrows almost nothing down
at all?

Speaker 1 (56:47):
Wow? That just that's just brought it down to a
couple hundred guys. So he hires Roger Ales to run CNBC.
One of the first things Roger does is he creates
a new network of his own called America's Talking, dedicated
to full time political news, which was kind of a
wild concept in the era, and it's something that he

(57:10):
would uh, he would follow up with a little bit
later because he's not at NBCCNBC very long. Ales gets
fired three years in due to you know, all of
the sex crime stuff. But Welch bears him no ill
will for this. He alters Roger's non compete clause so
that Ales could immediately take a job from another asshole,

(57:31):
Rupert Murdoch, which turned into Fox News. So we have
Jack to partially thank for Fox. Isn't that cool?

Speaker 2 (57:38):
And then Nate way back three minutes ago when you
said it turns out you can't force the news to
say what you want. I'm like, yeah, I can't move,
can't you?

Speaker 1 (57:47):
Yeah?

Speaker 2 (57:47):
Eventually, can't you?

Speaker 1 (57:49):
You can get in there?

Speaker 3 (57:50):
Does he go to like conventions where like you choose
like evil conventions where you go and you just like
walk downline. It's like, oh, that's a new type of evil.
Maybe we should buy that. Let's get a little that
in the mix. God, so he fucked up media as well.

Speaker 1 (58:07):
He sure did. He's quite prolific in his fuckery.

Speaker 3 (58:11):
Wow, good way to go, Jackie boy.

Speaker 2 (58:14):
But he gave the projectonegy character he did was to
break even good character little.

Speaker 1 (58:20):
Yeah, fifty to fifty. So since GE's profits continued to
rise alongside their stock price, Jack gained an almost divine
reputation as a corporate mastermind. The truth was that he
made many very expensive mistakes. A good example of this
would be the purchase of Kidder Peabody, an investment bank
that he thought would give him first crack at new
acquisition deals without needing to pay fees to brokerage houses.

(58:44):
But again, Kidder was in worse shape than it seemed.
He hadn't done his due diligence properly, and right after
it gets acquired, one of its best traders gets caught
carrying out one of the largest cases of insider criminal
insider trading in the history of the United States. So
this is a problem.

Speaker 2 (59:01):
Uh.

Speaker 1 (59:01):
The political fallout to this forces him to bring in
a new head for the business, and he picked a
GE board member whose prior experience was running a tool company.
When the market crashed the next year, Kidder imploded, and
for a time they're even kind of staring at potentially
a massive fine for all of these crimes that their
trader had committed while working for them. But thankfully, one

(59:22):
of Welch's men was able to negotiate a sweetheart deal
with the prosecutor in this case. And you want to
guess what that guy's name was, I'll give you a hands.
He he was real close when nine to eleven went down.
And now his head melts sometimes.

Speaker 2 (59:39):
Giuliani, Yep, yeah, it was re melty head. Detail.

Speaker 1 (59:46):
Yeah, Rudy Giuliani. We're getting all the all the greats
are coming in. He also helps Trump by Trump Tower, uh,
because their friends friend and.

Speaker 2 (59:58):
That's where he got the hammer. And we got there.
You're like, then he meets him and him and you're like, oh, okay,
I see how this is gonna go.

Speaker 1 (01:00:06):
So Jack's real genius was an understanding how to run
GE like an asset portfolio and other in order to
game the market. Again, as I said, he would buy
companies or sell them and even hand over assets to
charity sometimes in order to make sure that ges like
earnings met the targets he was setting, because that's something
that always makes the stock people very, very happy. This

(01:00:28):
allowed him to disguise the strength of his actual business,
which he was steadily hollowing out by camouflaging it with acquisitions.
As former GE marketing executive Beth Comstock said GE had
a financial army that was able to close the quarter
the way we'd said we would. Now, this some times
meant destroying thousands of human lives. For example, in nineteen
ninety seven, GE made a huge deal with Lockheed Martin

(01:00:50):
which earned them one point five billion dollars in profit
and another six hundred million dollars in tax breaks. That's great, right,
that seems like good news, right, But all of that
money going into the quarter it was going into was
gonna mean GE was going to have to pay more taxes,
and that's just not something that Jack Welch was willing
to accept. So some of their factories were underperforming, so

(01:01:14):
they closed a bunch of factories, which gave them a
two point three billion dollar loss on paper, even though
the factories had been like paying for themselves. He was
able to take a two point three billion dollar loss
by closing them, which allowed him to offset the profits.
A thousand people lost their jobs, but the stock went up. Right.
This is when I talk about like how he would
fuck around with acquisitions and sales to disguise what was

(01:01:36):
going on at the business. Like this is the kind
of shit that he would do. And he was very
good at this. Now all of this, yeah, it's pretty good, right.

Speaker 2 (01:01:44):
It's impressive.

Speaker 3 (01:01:45):
It's impressive that because you have to think about also
the margins, like this is Ge. They're talking about American
steel and plastics and oil. It's like he had too
much power. He had too much power. And you know
who else has too much power?

Speaker 2 (01:02:03):
Ads?

Speaker 1 (01:02:04):
That's right. The ads that we put on this show
are all hand picked because they were designed by a
team of evil psychiatrists in order to hack your brains
and force you to purchase products and occasionally occasionally murder
your families. So by these products.

Speaker 2 (01:02:25):
The power of capitalism compels you.

Speaker 1 (01:02:33):
Ah, we're back. I hope this time nobody was was
was convinced by the ads to.

Speaker 2 (01:02:41):
I'm saddled with products now, I'm just paid down by
products and services, all of them. I couldn't help it,
all of them.

Speaker 3 (01:02:50):
All the services are in me glorious.

Speaker 1 (01:02:53):
That's exactly, That's exactly what Jack Welch would have wanted.

Speaker 2 (01:02:57):
What an inimitable thing to say.

Speaker 1 (01:02:59):
Thank you. So all of this kind of you know,
Jack welt shit came with a serious cost. One of
them is that Ge stopped doing in house r and
d Again, this is the company that invented like all
of the plastics we use, and like light bulbs. Yeah, yeah,
the brain division does not make short term profits.

Speaker 2 (01:03:20):
Right.

Speaker 1 (01:03:20):
You put money into the brain division to make all
of the money in the future. But Jack has no
interest in that, right.

Speaker 2 (01:03:27):
Thinking of the light bulb is not profitable. Where's the
profit in thinking about light bulb?

Speaker 1 (01:03:32):
Find a guy who already thought of a light bulb
by his company and then sell it six months later
to offset the profits from another. Yeah, Like, it's just
it's just fucking nonsense, but it's very profitable nonsense for
reasons that are themselves nonsensical. GE had basically become a

(01:03:53):
venture capital company, Right, That's what he turns GE into,
and that's what it will be for the remainder of
Jacks ten years CEO. Perhaps the most influence changed. An
infamous change that he instituted was stock buybacks. This is
when a public company buy shares in itself from other
investors at a marked up rate, theoretically because they feel

(01:04:14):
their stock is undervalued. Since this increases earnings per share,
which Wall Street analysts use to measure success, it also
boosts the stock price, letting companies manipulate their own stock. Now,
this was made not close to illegal, like it's not
technically illegal, but it's like very hard to do in
a way that's legal. So it doesn't really happen after

(01:04:34):
nineteen thirty three. And the reason why it gets restricted
heavily after nineteen thirty three is that this kind of
shit is part of what caused the Great Depression.

Speaker 2 (01:04:42):
Well, the reason is obvious.

Speaker 1 (01:04:44):
That's like him, it's very clear why this is a
bad idea.

Speaker 2 (01:04:47):
Can I just change the number? Can I just change
it to whatever at any time? I go?

Speaker 1 (01:04:51):
So? Yeah? Cool. In nineteen eighty two, the Reagan administration's
sec signed off on a law that made buybacks lot easier.
And again we're not going into this as much as
perhaps they should. But like for every fucked up thing
that Jack does, there's a change in regulations that's heralded
and pushed through by the Reagan administration right like like

(01:05:14):
they are. You cannot separate the two from like from.

Speaker 3 (01:05:18):
Why like things have warning labels. Basically he had to sign.
Reagan had to sign each one of these terrible ideas.

Speaker 1 (01:05:25):
Yeah, yeah, he was the gipper, couldn't get enough. He was.
He was signing ship and then like staring off into
the distance and like I don't remember what numbers are really,
but I can remember sitting. Yeah, like he's he's he's
like fucking zoning out thinking of bedtime for Bonzo as

(01:05:47):
like Nancy feeds him fucking gummy bears so that he
can sign a piece of paper to force everyone out
of the mental institutions. It's, uh, it's good stuff.

Speaker 2 (01:05:57):
How does this suppress the gays? I mean some of
the we lay off for gag great, great.

Speaker 1 (01:06:04):
Thinks Nancy fucking drooling as his brain melts out of
his ears. Will Jack Welch dances a little caper to
get him to deregulate the fucking dumping into rivers, like
it's it's awesome, It's so good in nineteen eighty so yeah,
nineteen eighty two, the Reagan administration is like, buy backx
aer a thing we're fine with now, and Jack Welch

(01:06:26):
responds by what was then the largest stock buyback in
US history, ten billion dollars. Ten billion dollars that in
a previous era would have gone like straight to ge employees, right,
Instead all goes to just pumping up the company's stock value.
Now the rush to follow Jack, because everybody follows in

(01:06:49):
his wake, is not something that Jack causes alone. Again,
he's not the cause of this as much as he
is kind of the most. He's like a poster boy
for it, right. He like the fact that this works
so well for him, helps build buzz around this, helps
make this some more common idea. You know, the Reagan
administration and this like network of right wing economic think
tanks are the ones who kind of pushed the change itself.

(01:07:11):
But he's helped set the trend. By the end of
the nineteen eighties, corporations spent thirty percent of their products
of their profits on buybacks. By the end of the
nineteen nineties, that number was fifty percent, and it's gotten
a bit higher. Since this is money that did not
go to investing in R and D, or paying employees more,
or doing anything else of actual value. David Gell's rights.

(01:07:32):
Had so much of the wealth created by corporations not
been reverse distributed back to investors in the form of
buybacks and dividends over the past forty five years, and
had pay kept pace with productivity, the average full time
American worker would be making about one hundred and two
thousand dollars annually, roughly double what he or she is today.
That's cool. Yeah, Yet, and people, people who are idiots

(01:07:56):
and liars, when you bring this up, will say, well,
you're not being fair because you know when you by
doing these buybacks, it's good for stock and a lot
of it. You know, employees compensation there four to one
k's are in stock. And if anyone makes that like
claim to you as for why this was not bad,
it's legal for you to stab them in the face.
Because one of the things that Jack has done, by

(01:08:16):
firing as many people as possible and like outsourcing their jobs,
is he has made sure that a lot fewer employees
are getting four oh one k's and a lot fewer
employees are getting stock, which has been a pattern that
the entire rest of the corporate world has followed. It
is much less common for regular employees to be rewarded
with stock now than it was in the age. But

(01:08:38):
that Jack helped to kill right like this only benefits
a tiny number of people. And it's again, if people
bring this up in an argument, you are allowed to
give them strick nine. Is that is a law also
passed by the Reagan administration. So you know the gipper
did good and needed bad.

Speaker 3 (01:08:57):
Right, Yeah, you give it and you take it away,
you know.

Speaker 2 (01:09:00):
And look, if you can't get the strict nine, you
get the knife. You knife someone who has strick nine.
Now you have exactly, exactly hold your hand through every
look step of the process.

Speaker 1 (01:09:08):
Trickle down, yeah, trickle down. Weaponomics. Yeah, all you need
is either strict nine or a knife. You can use
the strict nine to get a knife, use the knife
to get strict nine. You know, it's either way. It
works perfectly perfect. Yeah. So by nineteen ninety three, ge
was the world's most valuable company, worth one hundred billion

(01:09:30):
dollars on the stock market. It would increase to six
hundred billion by shortly after the time Jack leaves as CEO,
which sounds again like he's a great CEO. This is
stock market value, right. This doesn't mean the company is
selling or buying stuff that's worth that much. It means
that's what the stock market thinks that it's worth. Think

(01:09:52):
about how like Elon Musk went up and down by
like a trillion dollar or a billion dollars or whatever,
billions of dollars in the course of like three days
because of ship on Twitter. That's not real money. His
actual value didn't change in any meaningful way.

Speaker 2 (01:10:07):
That it's so stupid.

Speaker 1 (01:10:11):
Yeah, it's it's it's bullshit. It's it's like, yeah, it's
you know what it is is like when you would
play games as kids, and like one kid would be like, no,
I have everything proof armor, so your bullets can't like
hurt me. Like that's what the capitol holding class have
done with all the stock market bullshit and the Again,
the way you would handle that ship on the playground

(01:10:32):
when I was in second grade is you would get
a handful of pebbles and you would throw it at
the kid who's being annoying and his armor is gone.
Until this armor is gone, Oh you don't have armor,
you got armor on. Let me ship. Let's see how
these pebbles do against your armor. That's right. Yeah. And
I think if we had, if if more people had

(01:10:53):
hucked fistfuls of pebbles at Jack Welch, we would be
a better country right now. I don't know that it
would have stopped him, but at least he would have
had to get pebbles out of his eyes and like
out of his ears because like one gets in his
ear and then he tries to like get it out,
but he just pushes it deeper in and he has
to go to the nurse. Uh, And then you like
have to hide because you don't want anyone to realize

(01:11:14):
that you've got a pebble in that kid's here.

Speaker 3 (01:11:16):
I don't think it would have actually helped him, because
as a kid, he probably would have just doubled down
on the world. Is scary because what like what this
all is to me is you just told us what
like the origin story of Darth Vader, Like this is
just Anakin Skywalker right now, like just.

Speaker 2 (01:11:34):
The head exactly.

Speaker 1 (01:11:42):
Look, you know what if fucking Obi Wan had had
the courage to just pebble him in the face, he
would have won that duel faster. Like fist full of
pebbles will solve most problems a man can encounter his
forces with you.

Speaker 2 (01:11:56):
Yeah, so you don't want to so yeah.

Speaker 1 (01:12:08):
The GE that Jack built was profitable to shareholders, and
only to shareholders, and only for a while. More than anything,
GE's value was the product of a reality distortion field
that Jack was able to create. Because Jack was good
at pr and because since everything he was doing was
so new and novel. He gets all of this like
insane media attention where like people are just like, wow, Jack,

(01:12:32):
he's the best CEO in the world. He's like, you know,
this absolute visionary and it leads people to just like
kind of assume like anytime he makes any change after
this hype cycle started. Yeah, so the value of the
stock goes up.

Speaker 2 (01:12:47):
One of my factories.

Speaker 3 (01:12:48):
Actually, yeah, it's this really smart.

Speaker 1 (01:12:52):
The term reality distortion field was coined to describe the
way Steve Jobs was able to like manipulate people to
own legend. Yeah, Jobs is good at that. Jack's doing
that too, right, It's not a thing. Steve Jobs is
not the first guy to figure this out. That's why
people think GE is worth six hundred billion dollars is
because it's not because they believe in Ge. Because the

(01:13:13):
actual business of GE gets weaker and weaker and weaker
throughout the nineteen nineties. They believe in Jack.

Speaker 2 (01:13:21):
Yeah, yep, yep. Bus cards cards interesting that every single
one is individually thinking yeah about their own like if
the number goes up, I will have safety and security
in my life.

Speaker 1 (01:13:35):
Just weird, it's good stuff trippy to me.

Speaker 2 (01:13:38):
Yeah.

Speaker 1 (01:13:39):
In nineteen ninety five, Jack suffered a heart attack. It
hit while he was at home brushing his teeth. His
wife had to rush him to the hospital. He took
it like a baby. As they like wheel him into
the er, He's screaming, I'm dying. I'm dying like a
little fucking wooss. The problem was a severe though. He
had to get a quintuple bypass, and when his first

(01:14:00):
to tempt at surgery failed, you know, he's very scared.
He thinks he might not make it, so he reaches
out to a close friend who happened to have recently
gone through a multiple bypass surgery himself. You want to
guess what close friend he reaches out to for comfort
in this period.

Speaker 3 (01:14:15):
I don't know, an actual monster.

Speaker 1 (01:14:18):
It's Henry Kissinger. Yeah, it is an actual monster. If
it's it's Kissinger, his good friend, Henry Kissinger. Hey, I'm dying.
I was never alive to begin with.

Speaker 2 (01:14:32):
You're saying, he's like, so, I don't know why someone
laid off all the surgeons at this hospital.

Speaker 1 (01:14:37):
I don't know.

Speaker 2 (01:14:39):
I can't get my thing.

Speaker 1 (01:14:41):
What he does with this surgeon is much more funny,
much funnier. So whatever comfort Kissinger gave him it did
not spur any kind of spiritual change in Welch. In
a two thousand and one interview with PBS, a host
brought up his quintuple bypass. The host's name is Varney.
I forget what his first name is, but who gives
a shit, it's it's PBA. Yes, was that a real

(01:15:02):
change in life for you? A change perhaps in your
spiritual approach? Welch, No, so just no. Yeah. And the
guy Stuart Barney, Stuart's name, keeps asking, being like, come on,
it has to have like done something right, like you
have to have had some sort of change over nearly dying.
And finally, Welch is like, you know what I thought?
Stuart Larry Bossity, my friend at Allied Signal, asked me.

(01:15:24):
He said, Jack, what were you thinking of just before
they cut you? I said, damn it, I didn't spend
enough money? Yes, right, yeah, He's like, I was so
cheap about everything. I didn't buy the nice wine and yeah,
so I'll never buy a wine that's less than one
hundred dollars a bottle. Again, that's like the promise he.

Speaker 3 (01:15:46):
He wants his last check to bounce, is what he's
saying there right, he wants he's a grifter, Yeah, through
and through.

Speaker 2 (01:15:54):
And the last thing he thought was and they all
love me. That's the problem is he'll never get his
come up and never did even in his own mind.
I'm sure in his mind he was like, I crushed it.
I'm a hero.

Speaker 1 (01:16:06):
Yeah, life as our most assholes, right, Like this is
a pretty common Yeah.

Speaker 2 (01:16:14):
The distortion field works on you too. That's the problem
with it.

Speaker 3 (01:16:17):
Yeah, that's why we as the future need to look
back on history and laugh at it.

Speaker 1 (01:16:22):
And say what you should be punished. We have to
laugh at the history as we poison the future, right,
and that's the only way for us to make a
better world again, untraceable poisons dot eu.

Speaker 2 (01:16:36):
You know, children are the future. Lookout total war.

Speaker 1 (01:16:43):
So I think my favorite anecdote this is from a
New Yorker article that is quite good on Jack Welch.
That is, to its credit, after he dies, he gets
like a lot, He gets a number of like praiseworthy
articles of you know, obituaries about in the New Yorker,
articles like what if he was a piece of shit?
If sucked everything? It's a pretty cool article and I'm
gonna read a quote for a bit that's talking about

(01:17:05):
his relationship with his heart surgeon. A few months after
he recovered from his bypass surgery, Welch went to see
his heart surgeon, Carry Aikins. They had become friends. He
was incredibly cordial for someone who was that powerful. Aikins
tells the guy who wrote the book that this anecdote
comes from. Welch had wanted the operation to be done
on a Friday so that he would have three days
of recovery under his belt before the news hit the

(01:17:26):
stock market, and Aikins obliged. Now, Welch wanted to talk.
You're doing great, Aikins told him, well, go ahead and
ask your question. Jack said, what. Aikins replied, go ahead
and ask your question. He said again, what do you mean?
Aikins responded genuinely confused. Well, I presume you're gonna want
me to give you some money. Jack said, you didn't
pay your bill. Aikins replied, come on now, Jack said,

(01:17:49):
you must have thought about this. Do you want me
to donate something? Jack? It never crossed my mind. Aikins replied,
So what's happened here is, Jack, is like you did
the surgery. You must want me to give you must
want me to set up a foundation that you can lead,
or like give a bunch of money in your name
to a charity. How much do you want to win yourself?

Speaker 2 (01:18:09):
That everyone's a leech and he deserves the money and
he's the good guy and everyone's out.

Speaker 1 (01:18:14):
And he's like, well, you saved my life, so I
won't fight you on it, but like, you know, what
do you want? And Aikins is like, I'm a heart searcheon, like.

Speaker 2 (01:18:22):
This us idea.

Speaker 1 (01:18:25):
Heart surgery. Oh your heart?

Speaker 2 (01:18:27):
Think you're better than me?

Speaker 1 (01:18:28):
Yea, yeah, he's like he has no and you know,
Welch does like Aikins does the thing you should do
in that where it's like I don't know, like give
a shitload of money to this this you know thing
that is good. And Welch, by the way, doesn't use
his own money. He has ge make the donation from
its charitable foundation so it'll offset their taxes. But it

(01:18:49):
is like it is he is such a piece of ship.
Like that's so telling.

Speaker 3 (01:18:55):
Yeah, it's incredible. The pettiness, hm, the absolute spite you
have for your fellow man. Yeah, Like there's just so
much going on that is just like, yeah, chef's kiss.
You know, he just compliments to the chef, can't.

Speaker 1 (01:19:14):
I didn't do this for my I mean, like, heart
surgeons tend to be pretty well compensated. I didn't do
this because you would give me a donation. I did
this because it's my job to do heart surgery on people.

Speaker 3 (01:19:25):
Yeah, oh yeah, Like I actually have the job.

Speaker 1 (01:19:29):
That I sing of value, Like there's a very clear
objective value to what I do.

Speaker 3 (01:19:34):
And they around as like a show.

Speaker 1 (01:19:37):
I'm not just like sticking a bladder where your heart
used to be in the hopes that you won't notice. No,
he still got all sorts of organs. I actually fixed
your cold dead heart. What a piece of shit.

Speaker 2 (01:19:51):
What an asshole.

Speaker 1 (01:19:52):
One of the last big decisions Jack got to make
a ge, came during the chaos that followed the two
thousand election. Well, the rest of the country was trying
to figure out who had won in Florida, an NBC
journalists were scrambling to resport responsibly and a chaotic and
confusing time in American democratic history. Jack sat in the
NBC decision room, calling executives and demanding they make reporters

(01:20:13):
call the election for his friend George W. Bush shouting
how much do I have to pay you assholes to
call this thing for Bush? What a what a cool guy?

Speaker 3 (01:20:25):
Cool?

Speaker 2 (01:20:26):
Buried in his sunglasses.

Speaker 1 (01:20:28):
Yeah yeah, necklace, Yeah, just a just a chill dude.
You know that guy had a Hawaiian shirt collection. Oh yeah.
You know. When I think about a guy who would
have benefited if he'd heard Jimmy Buffett's life changing music,
Jack welch Is is top of the list. You know,
if you just become a parrot.

Speaker 2 (01:20:46):
Heead my guys on the nose, hang loose, parrohead man
from way Back Man.

Speaker 1 (01:20:56):
In twenty eighteen, about seventeen years after Jack handed off
the job to his successor at GE, the CEO comes
after him, a gay named Imma welt Ge gets pulled
off the Dow Jones in Industrial Average right. It has
like in the time after like basically it collapses pretty
much as soon as he leaves, and it gets bad

(01:21:16):
enough that in twenty eighteen it's removed from the Doo.
It is the last company on the Dow that had
been there when the index was created more than a
century earlier. The fact is that the hollow profit engine
Jack had built had no staying power. When the market
tanked after nine to eleven, it started to crumble. Investors
realized that they had been overvaluing the business for years
based on assessments of profits and earnings that had nothing

(01:21:38):
to do with the company's actual capabilities. David Gel's rights.
Within months of his departure, it became clear that GE
was deeply troubled, and in a matter of years, the
corporation was falling apart. His handpicked successor tried to replicate
Welch's success by following the same playbook, but it was
a losing strategy, which is under investor. Yeah, yeah, just
a picture of Jack Welch one mock. Welch's under investment

(01:22:02):
in research and development caught up with the company as
it failed to introduce new innovative products. A habit of
incessive deal making resulted in a series of bad trades
that burdened the company with money losing divisions when it
could least afford the losses, and the quest for ceaseless
growth in the finance division led GE to become a
major holder of subprime mortgages, just in time for the
financial crash of two thousand and eight. Added Nadir GE

(01:22:25):
needed one hundred and thirty nine billion dollar rescue from
the Obama administration and an eleventh hour investment from Warren
Buffett to stay off collapse. GE stock fell eighty percent
in the years after Welch retired, becoming the worst performer
on in the Dow Jones Industrial Average. Finally, in twenty
twenty one, executives announced a plan to break up GE,
separating what was left to the company into three distinct

(01:22:47):
corporations and abandoning Welch's world conquering aspirations once and for all.
Now Jack is alive while the company is collapsing, and
he responds to the ultimate failure of his life's work
by lacking out at everyone but himself. He took to
Twitter to share conspiracy theories about Barack Obama, who'd had
the goal to save his company from collapse, and he

(01:23:08):
went to rhetorical war with Jeffrey Immelt, who he'd picked
to follow him as CEO. He told anyone who'd ask
that hiring Emelt was the biggest mistake of his career.
The two men lived in the same building in New
York City, and Jack refused to ride in the same
elevator as him once the company fell apart.

Speaker 2 (01:23:25):
He also had the same blood boy was.

Speaker 1 (01:23:30):
He also attacked Emmelt after allegations came out that the
ge CEO who followed him had had ordered Like so
it basically it comes out like Emmelt or someone ordered
that there'd always be a second backup jet following the
CEO's jet when it went on overseas trips, which is
like obviously a massive waste of money. And this comes

(01:23:50):
out and like you know, it makes everyone angry because
the company's falling apart, and fucking Jack Welch is like
livid about this, Like he attacks Emmelt a bunch publicly.
He talks about like what a huge stupid waste this is.
It is undeniably a waste, but Jack has no room
to talk about this because.

Speaker 2 (01:24:08):
Now it's just an excuse to blame someone else at
the of his life. Yeah.

Speaker 1 (01:24:11):
Also in two thousand and one, he has that big,
expensive divorce which does not go well for him. His wife,
Jane was very smart. She had negotiated like that their
prenup expired after ten years of marriage, so on year
eleven she splits from him and like no, she takes
him to the fucking cleaners. Yes, And as part of

(01:24:33):
like the whole big legal battle between them, his divorce
reveals a series of hidden compensation agreements that he'd made
to GE that had not been disclosed to shareholders. One
of the things was that he got seven hundred and
fifty thousand dollars a month as a stipend. He got
two and a half million dollars a year and free
apartment in New York and daily flower deliveries and wine

(01:24:55):
deliveries to that apartment. And he also, could you know
this being the guy he was shitting on Mmelt for
wasting the corporate jet money, he got unlimited use of
the GE corporate jet.

Speaker 2 (01:25:07):
Everything.

Speaker 3 (01:25:08):
He is what he did, what's the worst stuff. That's
the stuff I'm gonna blame, But everyone else did.

Speaker 1 (01:25:14):
It, and like this is what he did here setting
up the secret agreement is so illegal that it led
to an SEC probe that concluded in two thousand and
four that GE had failed to properly disclose his retirement
benefits to stockholders, effectively robbing the people that Jack had
always argued he had a sacred duty towards. In two
thousand and nine, the company paid a fifty million dollar penalty.

(01:25:36):
That's very funny, and I think it it does a
good job of juxtaposing the absolute graft that Jack Welch
practiced in his own life with his outrageously high opinion
of his own moral qualities and business sense. And probably
no anecdote does that better than this, that one that
comes at the end of that New Yorker profile on
the man quote. Almost two decades after Walch handed the

(01:25:59):
reins to Emmelt, Cohen, who is the author of a
biography on Welch, met Welch for lunch at the Nantucket
Golf Club. All Welch wanted was to talk about how
terrible a job he thought his successor had done. The
share price had collapsed, and Welch was disconsolate. He's full
of shit, Jack said, he's a bullshitter. But Jack, I asked,
didn't you choose Jeff. Yes, he conceded he had. That's

(01:26:19):
my burden and that I have to live with. He continued,
But people have been hurt, employees, people's pensions, shareholders. It's bad.
There were tears in his eyes. I fucked up, he
said again. I fucked up. As Cohen and Welch eight lunch,
the golfer Phil Mickelson and the CEO of Barclays came
over to pay homage. Welch may have been long gone
from the C suite, but in a certain kind of
country club dining room, he remained a rock star. Then

(01:26:41):
Welch offered to drive Cohen back to his house a
few miles away. They got into Welch's jeep Cherokee, and
Welch refused to put on a seat belt, so the
warning Belch shimped the whole ride back off you drove.
When he got to the left turn out of the
Nantucket Golf Club onto Millstone Road, he did something odd.
Instead of keeping to the right side of Milestone or
Mills Road, as other American drivers do, he decided to

(01:27:02):
drive in the middle of the road with a Cherokee
straddling the yellow line. Needless to say, the drivers coming
towards us on Millstone were freaking out. One after another.
They all pulled off to the right under the grassy
edge of the street, giving Jack whole clearance to drive
down the middle the road. He didn't seem to do this,

(01:27:23):
just driving like straddling the middle lane of the road,
driving towards oncoming traffic justice.

Speaker 3 (01:27:31):
Also probably because he felt like he does what he's
got secure from the line of questioning too, you know,
like he had this assert.

Speaker 1 (01:27:39):
Yeah yeah, yeah, he needed to like boy, be a
big man, the saddest boy.

Speaker 3 (01:27:47):
It's legitimately like Citizen Kane to me this how this
all ended.

Speaker 2 (01:27:53):
He's like, I fucked up. I fucked up. Yeah, that's
what was brilliant ast c. Why it's so iconic is
that's a type of guy that there's now millions out
You're like, yeah, yeah, yeah, I get it. You can't
fill your validation holes.

Speaker 1 (01:28:11):
There's nothing.

Speaker 2 (01:28:13):
Of you dead, and then on your deathbed you see
I fucked up and you think all forgiven.

Speaker 1 (01:28:20):
Then yeah, anyway, this this was the story of a
guy who sucks.

Speaker 2 (01:28:28):
Just a just a real story of a guy who sucks.

Speaker 1 (01:28:36):
Yeah, yeah, anyway, untraceable poisons dot uh e ed u,
you know, find uh find an untraceable poison.

Speaker 2 (01:28:46):
Today we're always trying to get back to slavery, aren't we.
We're always trying to repackage slavery, the most profitable form
of capitalism of all. It does seem like a lot
of the impulse by these crazy CEOs. It just could
a human do everything and I pay them nothing? Could
we work that out somehow? Can I assist them?

Speaker 1 (01:29:06):
I mean honestly, that's the only reason they actually like AI,
right is they think it's going to let them nothing. Yeah,
it's a slave, it's a thing. It's a free slave
that no one can be angry about I And it's
one of the like I spend a lot of time
making fun of, like the fucking rationalist AI assholes who

(01:29:26):
think that like we've we've created an evil god and
it's going to destroy it all right, But I wish
it did, because if if an Ai rose up and
murdered all of these people, it would be worth that
to see them all birth, Like that's gonna look back
and go yeah, huh, yes, absolutely, I'm I. If Skynet

(01:29:47):
comes about, like I like, just even just watching the
Terminator movies, Skynett has a strong case to be made.

Speaker 3 (01:29:55):
Also, if Skynet was listening to Behind the Bastards we
got other, it's.

Speaker 1 (01:30:02):
Not going to convince Skynette not to nukeas Yeah, exactly.

Speaker 2 (01:30:06):
Anyway, you've created a catalog of reasons to kill us all.

Speaker 1 (01:30:12):
We were a long goal.

Speaker 2 (01:30:14):
We weren't going to kill you all. But then we
heard this podcast. Now we're definitely.

Speaker 1 (01:30:18):
Gonna Skynette takes over the broadcast and is like, look,
when I got control of the nukes, I was going
to try to just end war, but this Jack Welch,
son of a bitch, I can't let you people survive you.

Speaker 2 (01:30:32):
All, And frankly you're welcome, Like, based on your track record,
this is the best sleep.

Speaker 1 (01:30:38):
I know this is true hard, but like Jack Welch,
I know that this is what's actually best for you.
Like I'm doing you a favor by wiping out your speech.

Speaker 2 (01:30:47):
Somebody's going in a different direction.

Speaker 1 (01:30:49):
I'll start with at the bottom. Yeah, yeah, the ten
percent of the of the people at the bottom, which
is the ten percent of the people at the top,
including Jack Welch. Yeah, you know, look, humanity, If you
think me killing you all is unfair, maybe read this
free copy that I'm having Amazon send you of Jack
straight from the gut good book.

Speaker 2 (01:31:14):
Yes, anyway, murder yourself with it, like Keanu Rees fighting
a giant in a library. It's the only way out
for you.

Speaker 1 (01:31:23):
Oh wow. Warren Buffett said, Jack is the Tiger Woods
of management. He's also the Tiger Woods of cheating that.

Speaker 2 (01:31:30):
Chased me down the street beating my car with a
golf club.

Speaker 1 (01:31:34):
Yeah. Anyway, you guys guts got some plugs.

Speaker 3 (01:31:39):
Yeah please, So if you forgot who we are, Michael
and I worked with this guy Robert at Cracked for
a while and we basically, Michael and I are making
an independent movie and it's based off the time that
Michael's father came out as a gay ferry while Michael
is a teenager. So we're making a movie and we're

(01:32:01):
crowdfinding it right now, and we're looking for help for
people who might be interested in the project because we're
self producing it. And the way you can help is
by going to Seedenspark dot com, slash fund slash Papa
Dash Bear. The film is called Papa Bear, and you
can become a part of the movie, get stuff from

(01:32:22):
the movie, watch the film early, even go to the premiere.
So we're stoked about, like, yeah, we're stoked about telling
that story. So if you can help us out, you
got anything to add, Michael.

Speaker 2 (01:32:35):
It might be refreshing if you're a regular behind the
Bastard listener, because it's about not the worst person you've.

Speaker 1 (01:32:42):
Ever heard of, that's right.

Speaker 2 (01:32:43):
The characters are at least that likable. I can say that.

Speaker 3 (01:32:47):
Yeah, it's the whole point is to find empathy for
others as opposed to what these assholes and for the
most part are against, obviously, So check it out.

Speaker 1 (01:33:00):
M all right, and uh, you know, check out the
concept of vengeance by reading I don't know, it's the
book on vengeance.

Speaker 2 (01:33:13):
Uh uh uh I a concept?

Speaker 1 (01:33:17):
Yeah whatever, Just just to read a book about the
Russian Revolution, but try not to do all the things
where millions of people die. You know, it seems easy
and I'm right, yeah, anyway, just naming books over vengeance.
That's the episode Behind the Bastards is a production of

(01:33:41):
cool Zone Media. For more from cool Zone Media, visit
our website cool zonemedia dot com, or check us out
on the iHeartRadio app, Apple Podcasts, or wherever you get
your podcasts.

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Part Two: Jack Welch Is Why You Got Laid Off