GE chairman changes corporate tune

March 04, 1992|By New York Times News Service

General Electric's chairman, John F. Welch Jr., who earned the nickname Neutron Jack on his reputation for eliminating people while leaving buildings standing, has gone through a conversion and is now preaching corporate pacifism.

"We cannot afford management styles that suppress and intimidate," he said in the company's new 1991 annual report. Instead, he called on his managers to adopt a set of "soft concepts" including such warm, fuzzy notions as having "the self-confidence to empower others and behave in a boundaryless fashion."

The statement also carried the signature of General Electric Co.'s vice chairman and executive officer, Edward E. Hood Jr.

In the 1980s, Mr. Welch exemplified the relentless executive willing to mow down any employees standing between him and a brighter bottom line. Through layoffs, plant closings and the sale of businesses, he eliminated 100,000 jobs, leaving 284,000. As his company's profits increased, his style was widely respected and imitated.

His new philosophy appears to be less a revelation than a gradual awakening that came as he developed his ideas by studying other companies and testing them in his own plants over the last few years.

Now Mr. Welch has arrived at a "set of values we believe we will need to take this company forward, rapidly, through the 1990s and beyond."

Trust and respect between workers and managers is essential, he said. Managers must be "open to ideas from anywhere."

In Mr. Welch's view, the sort of manager who meets numerical goals but has old-fashioned attitudes is the main obstacle to carrying out those ideas. "This is the individual who typically forces performance out of people rather than inspires it: the autocrat, the big shot, the tyrant," he said.

Still, tyrants will get a taste of Jack Welch's older motivational techniques. They will adapt, or GE will "part company with them if they cannot."

Workers and their union leaders regarded Mr. Welch as their archenemy when he was closing plants and dismissing them by the thousands in the early 1980s.

He now describes that era as a prelude to his latest strategy for keeping a $60 billion company nimble and competitive.

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