Barry Ritholtz on the criminality of Jack Welch

Some thoughts on the fall of GE from one of its sharpest observers.

GE began the 21st century as the most valuable conglomerate in America. The architect of this success was Jack Welch, often described as the best CEO of the 20th century.

I suspect he wasn't.https://t.co/WjUjG6wiYw

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— Barry Ritholtz (@ritholtz) November 10, 2021

Welch was a PR master, skillfully working the press. He regularly appeared on GE-owned CNBC in the 1990s, touting GE’s stock. It was an obvious conflict of interest that he flouted regularly.

The result was a staid industrial old firm trading at lofty tech stock multiples.

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— Barry Ritholtz (@ritholtz) November 10, 2021

His successor Jeff Immelt couldn't manage profits the same way.

Those smooth quarters under Welch turned out to be based on accounting fraud. Earnings returned to more normal volatility after Welch left. Earnings, not the 2000 crash, were the issue.https://t.co/m4tZEWArYf
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— Barry Ritholtz (@ritholtz) November 10, 2021

We cannot blame the most recent GE disaster -- $200M penalty for misleading investors on its earnings in its power and insurance businesses -- on Welch.

But it does reflect a corporate culture he created.https://t.co/s6iSnXlGFA

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— Barry Ritholtz (@ritholtz) November 10, 2021

If you're up for more Welch fun and games, check out this 2012 post from Andrew Gelman.