Re Sept. 10 article, “GE’s hot streak continued in 2nd half of century”: The long list of blockbuster products invented and developed by GE in the 1960s through the 1970s is impressive. These included:
1) First U.S. company to use computers in a factory.
2) Solid-state lasers for laser printers.
3) CT scanner and MRI machines used in hospitals around the world that improved health and saves lives.
4) New materials: man-made diamonds, Lexan unbreakable plastic and PPO/Noryl heat-resistant plastic.
5) Aerospace advances in re-entry vehicles and weather satellites. The stream of profitable, innovative new products stopped after the 1970s when Jack Welch became CEO in 1981. He famously nuked thousands of engineers and scientists who were developing new generations of profitable, innovative products. He shuttered the product department labs that supported manufacturing for short-term financial gain.
This is why GE is now struggling. Much blame goes to Wall Street analysts and business publications that were tripping over each other to heap praise on Welch for raising the stock price. During his time at GE, the company’s value rose 4,000 percent. Where was Wall Street to question numbers too good to be true?
Wall Street did not raise the alarm that Welch was using financial engineering and lack of R&D investment and manpower know-how for short-term financial gain. Soon after he retired with a $417 million severance payment, the catastrophic consequences of Welch’s actions became obvious.
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