Special Guest Blog By Ken Kinlock
(Featured image above is Bob Wright. Long-time GE worker. First as a lawyer, best known as head of NBC, then a Vice-Chairman. Photo from Investors.com).
In our first installment of “What Happened to GE“, I talked about the April 1, 1981 change from the “Old GE” to the “New GE”. In the next installment, I talked about the major event of the Century, the RCA Acquisition.
Now I would like to refer to an important comment in the first blog: “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”: WHAT HAPPENED TO ALL THESE BUSINESSES?
I am going to refer first to Bob Wright. In 1969, about six months after he earned his bachelor’s degree in law from the University of Virginia. He took a staff job at the power transformer plant in Pittsfield, Mass. His reaction: “Everyone had their head down, going about their business. I was just a cog in a huge machine.” Rather than turn him off, it fueled his drive: “I realized I was going to have to push hard and do it on my own, and that is fundamentally where I got into that mode.”
In 1970, he left GE and accepted a clerkship with a federal judge. He returned to GE in 1973, mostly for the opportunity to work with his mentor, Jack Welch. In 1979, Welch appointed Wright to a “job” that ultimately would change his life. GE was about to acquire Cox Broadcasting and sent Wright down to that company’s Atlanta headquarters to head the operation. But the deal fell through.
“My name wasn’t Cox,” he said. So when Welch wanted him to come back and head the housewares and audio electronics business, Wright returned to GE again. There, Wright was asked to offer an appraisal of the unit he was supposed to lead.
“Jack said to me: I need your honest opinion about the business. I came back to him and said you have every reason to be nervous. We put our best products out there and in three weeks they all become promotional items. We’re never going to make a lot of money and all our science” — research designing new products — “is going down the drain.”
Housewares & Audio, Major Appliances and Lighting were impacted in the same way.
Welch saw the wisdom of Wright’s analysis — he ultimately sold those units — and rewarded him with a plum assignment — head of GE Financial Services, a job he held until 1986 when GE purchased RCA and Wright was named CEO of RCA’s NBC subsidiary.