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Jack Welch: King of Outsourcing Dies

At age 84 was heartless, loved the shareholder and his legacy can be questioned

Brian Young's picture
Mar 03, 2020

This week, former General Electric (GE) CEO Jack Welch passed away. Welch served as the chairman and CEO of the company from 1981 until 2001, working his way up from a chemical engineer in 1960. While Welch is being honored as a tough CEO who was immortalized in the NBC comedy 30 Rock, the reality is that Welch fought unions and outsourced jobs.

Welch was the type of CEO that unions love to hate. He once said that ''Ideally, you'd have every plant you own on a barge,” and tried to live by that mantra by shipping tens of thousands of jobs overseas. Welch also helped to popularize the idea that publicly owned companies like GE owe their primary allegiance to their shareholders, not the employees and that their duty is to cut costs, reduce payroll and increase profit. Over Welch’s 20 years running GE he outsourced or eliminated 112,000 American jobs. While the workforce in the United States is still union, it is significantly smaller than it was in the 1980’s thanks to Welch. Currently, there are only about 9,450 union employees at GE.

 His brutal management style, known as Six Sigma, has fallen out of favor in the post-recession world. Welch was once the poster child for a brutal approach to management, demanding perfection, cutting costs and sending jobs overseas. Thanks to that the stock price skyrocketed under his reign, but he also opened the company up to vulnerabilities that caused huge stock losses during the Great Recession.

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