First, GE Capital, the finance subsidiary of the giant American conglomerate he runs, General Electric, was obliged to abandon a planned takeover of its one-time arch-rival, Westinghouse Capital. Then, after years of being the butt of the jokes of David Letterman, the host of a late-night talk show on GE's television network, he lost out in a multi-million-dollar bidding war to retain his services. (CBS agreed to pay the comedian dollars 42m to defect from GE's NBC.) And finally, Jack Welch, the chief executive, had to watch GE's shares lose ground, despite announcing record 1992 profits, up 6.2 per cent to dollars 1.34bn, the best in US industry in a decidedly difficult year.
But Mr Welch's year was nothing compared with that suffered by many of his colleagues at other US corporate giants. One by one, the leaders of America's best- known companies - General Motors, IBM, Sears Roebuck, Westinghouse - have succumbed to boardroom coups or shareholder revolt in the past 12 months, forced either to step down or to accept humiliating restructuring plans that undid much of the ambitious expansion they undertook in the past decade.
And the bleeding in American executive suites is hardly over: on Monday, the board of American Express meets to decide whether it will oust its chief executive, James Robinson III, whose plan to transform Amex into a financial services supermarket came a cropper. On Tuesday, the directors of IBM - the biggest management disaster of them all - gather to consider the fate of John Akers, chief executive, in the wake of 1992's record dollars 5bn loss.
While just about every other big US conglomerate, from ITT to Gulf & Western, has been obliged to acknowledge the folly of costly diversification and acquisition strategies, General Electric - with 13 distinct business groups ranging from appliances and aircraft engines to lightbulbs, broadcasting and investment banking - has somehow managed not only to survive but also to prosper in the 1980s and 1990s. From being the fifth-largest industrial company listed on the New York Stock Exchange in 1980, it has become the biggest, worth more than dollars 60bn at Friday's prices.
The secret of GE's success is now generally accepted to be Mr Welch himself. After years of bad press - an Academy Award- winning documentary called Deadly Deception, and dozens of articles labelling him a polluter, an arms manufacturer and a nuclear hazard - 'the toughest boss in America' has suddenly become the darling of American management gurus, and the subject of two new books as well as feature interviews in magazines ranging from Newsweek and Time to Fortune.
What most US companies are doing now - refocusing on core businesses, stripping out layers of unnecessary bureaucracy, shedding jobs - GE did a decade ago, before signs of ill health were evident to outsiders. Mr Welch recognised early the threat foreign competition posed to America's industrial giants, large command-and- control structures that belonged to an era when US business enjoyed hegemony over markets and consumers. In GE's case, some 75 per cent of the competition is foreign.
Within five years of taking control in 1981, Mr Welch had sacked 130,000 people - 25 per cent of GE's workforce - sold off 200 of its 350 businesses and eliminated six layers of management. IBM and GM are grappling with similar numbers today; but GE did it at a time when it was profitable and could afford it. 'The only thing different about our actions was that they were 10 years earlier, and that we were perceived at the time to be a very healthy company,' Mr Welch told a recent interviewer.
'My biggest mistake by far was not moving faster,' he adds in the current issue of Fortune. 'Pulling off a Band-Aid one hair at a time hurts more than a sudden yank.'
Mr Welch decided early on that GE's divisions had to be number one or number two in their markets to survive; otherwise, they had to be 'fixed, sold or closed'. In short order he disposed of GE's small appliances, oil, consumer electronics, semi-conductor and computer divisions.
At the same time, he bought billions of dollars worth of new assets to bolster the 13 divisions he settled on, acquiring RCA Corporation through a dollars 6.3bn stock swap in 1985, trading its electronic appliance division for the medical instruments business of France's Thomson in 1987, establishing a joint manufacturing venture with GE's unrelated UK namesake, GEC, in 1989.
But GE's shape remains fluid: one measure is the fate of the assets acquired in the 1985 RCA deal. By last year, only two of its divisions remained: defence electronics, which were subsequently spun off with its aerospace business and merged with the Pentagon contractor Martin Marietta; and the NBC network, which is on offer to potential suitors including the comedian Bill Cosby, the former Fox studio head Barry Diller and Paramount Communications.
For a long time, Mr Welch's furious trading confused Wall Street, which signalled its misunderstanding by pricing its shares in multiples usually reserved for shapeless conglomerates like ITT or Textron.
'We may be a diverse company, but we're not even close to being a conglomerate,' Mr Welch argues in one of the books, The New GE by Robert Slater. Increasingly industry analysts and the Harvard School of Management tend to agree. GE now trades more like a growth stock than the hodge- podge of cyclical core businesses, high-technology and service businesses investors once mistook it for.
GE's businesses, with the exception of NBC and its securities subsidiary Kidder Peabody, enjoy a form of cross-pollination he calls 'integrated diversity', which seems to owe more to his energetic management style than to any natural symbiosis.
With a worker-empowerment philosophy that makes him sound like a combination of Mao Tse-tung and Robert Reich, the US Labor Secretary, the Neutron Jack of the early 1980s has evolved into an advocate of 'boundaryless' organisations, encouraging shop-floor employees to break down corporate hierarchy, challenge weak managers and liberate their own productivity.
'We've got to invest totally in our people,' Mr Welch says. In a decade where value is everything and capacity can come from anywhere on the planet, 'only the most productive are going to win'.
Companies and countries that tried to ignore new global realities in the 1980s are paying for it now, as are their employees and consumers, he says. 'Our people come to work knowing that customers are their only source of job security.'
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