Special Guest Blog By Ken Kinlock
(Featured image above is Jack Welch in 1980. My photo)
So why have I been asked to write this? Well, I was THERE for a lot of the changes at General Electric. I started with the Company in 1966, working in Corporate Finance until the end of 1989. First in Schenectady, New York then in Fairfield, Connecticut. In 1990, I formed an EDI outsource company with basically one client: The General Electric Company!
I know the Company was formed in 1892 but let’s start with the GE of 1980. This was the last year of the Company being headed by Reginald H. (Reg) Jones. On April 1, 1981, John F., Jr. (Jack) Welch took over. Jack was the 8th CEO since the corporation was founded. While Reg came from a financial background, including the Corporate Audit Staff, Jack had risen through the Plastics Business.
“Innovation and self-renewal: these are the themes that characterize General Electric as we enter a new era.”
At the start of the 1970’s, 80 percent of earnings came from traditional businesses in the electrical & electronic goods manufactured area. These businesses are all healthy, but end of 1980 they provided less than half of earnings. The remainder came from growth businesses in man-made materials, natural resources, aerospace, transportation equipment, and services. International was 42 percent in 1980 compared to 16 percent a decade earlier.
Electronics will dominate the 1980’s. For example, the purchase of Calma Corporation (interactive graphics equipment) and Intersil (advanced microelectronic chips). In the growing energy field, the Company purchased Utah International (coal) and Ladd Petroleum. Note that these four companies are now history!
The Company invested $6 billion in last 5 years and $2 billion in 1980 alone. Does not include Corporate R&D.
In the next blog (#2). I will discuss Jack’s early years.