The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America-and How to Undo His Legacy

by David Gelles Narrated by Kevin R. Free

Overview

New York Times Bestseller

New York Times reporter and “Corner Office” columnist David Gelles reveals legendary GE CEO Jack Welch to be the root of all that's wrong with capitalism today and offers advice on how we might right those wrongs.

In 1981, Jack Welch took over General Electric and quickly rose to fame as the first celebrity CEO. He golfed with presidents, mingled with movie stars, and was idolized for growing GE into the most valuable company in the world. But Welch's achievements didn't stem from some greater intelligence or business prowess. Rather, they were the result of a sustained effort to push GE's stock price ever higher, often at the expense of workers, consumers, and innovation. In this captivating, revelatory book, David Gelles argues that Welch single-handedly ushered in a new, cutthroat era of American capitalism that continues to this day.

Gelles chronicles Welch's campaign to vaporize hundreds of thousands of jobs in a bid to boost profits, eviscerating the country's manufacturing base, and destabilizing the middle class. Welch's obsession with downsizing-he eliminated 10% of employees every year-fundamentally altered GE and inspired generations of imitators who have employed his strategies at other companies around the globe. In his day, Welch was corporate America's leading proponent of mergers and acquisitions, using deals to gobble up competitors and giving rise to an economy that is more concentrated and less dynamic. And Welch pioneered the dark arts of “financialization,” transforming GE from an admired industrial manufacturer into what was effectively an unregulated bank. The finance business was hugely profitable in the short term and helped Welch keep GE's stock price ticking up. But ultimately, financialization undermined GE and dozens of other Fortune 500 companies.

Gelles shows how Welch's celebrated emphasis on increasing shareholder value by any means necessary (layoffs, outsourcing, offshoring, acquisitions, and buybacks, to name but a few tactics) became the norm in American business generally. He demonstrates how that approach has led to the greatest socioeconomic inequality since the Great Depression and harmed many of the very companies that have embraced it. And he shows how a generation of Welch acolytes radically transformed companies like Boeing, Home Depot, Kraft Heinz, and more. Finally, Gelles chronicles the change that is now afoot in corporate America, highlighting companies and leaders who have abandoned Welchism and are proving that it is still possible to excel in the business world without destroying livelihoods, gutting communities, and spurning regulation.

Editorial Reviews

FEBRUARY 2023 - AudioFile

This takedown of the legendary CEO of General Electric would be interesting even without Kevin R. Free’s exceptional performance. But his artistry provides exceptional listening. Nevermind Free’s appealing diction, impressive phrasing, and ability to orchestrate the ebb and flow of mood or tone. What really impresses is how perfectly he applies these vocal skills to every dramatic detail and underlying thread in the gripping story of Welch’s brutal management style and its lasting impact on American business culture. The author shows how Welch and his acolytes reneged on traditional corporate responsibilities by prioritizing short-range profits, cutting jobs, and misleading the public with dishonest accounting practices. They rewarded shareholders and managers at the expense of workers, customers, innovation, and even safety. T.W. Winner of AudioFile Earphones Award © AudioFile 2023, Portland, Maine

Publishers Weekly

03/21/2022

New York Times reporter Gelles (Mindful Work) delivers a cutting takedown of former General Electric CEO Jack Welch. As chairman and CEO of GE from 1981 to 2001, Gelles writes, Welch reshaped corporate capitalism with his focus on growth at the expense of anything else. Gelles depicts his subject as an aggressive, argumentative kid who grew up to be a validation-seeking, temperamental adult. His two decades at the helm of the electronics giant were characterized, Gelles asserts, by a “relentless pursuit of financial glory,” during which he fired thousands of workers, cobbled together unrelated businesses that could turn a quick buck, and turned GE into a company that “paid little regard to its employees and was addicted to short-term profits.” The CEO’s actions sapped morale at the company, Gelles contends, yet his “extreme practices became commonplace” as profits grew and “Welchism” prevailed at more and more companies. For businesses interested in putting “an end, once and for all, to the bankrupt practice of making men like Welch our heroes” the author suggests remedies such as sharing “wealth with our workers” and “celebrating CEOs who... prioritize long-term growth over short-term gains.” Full of color and vitriol, this is an incisive, eye-popping history. Agent: Amanda Binky Urban, ICM Partners. (May)

From the Publisher

A vigorous argument for a more humane capitalism.” –Kirkus Reviews

“An indispensable history of how we wound up with a business culture that believed employees were owed nothing more than yesterday's paycheck. But David Gelles does not just sound the alarm. He contrasts this warped world view with a new emerging reality — accelerated by the pandemic — that puts the employee experience and well-being at the center of business priorities. A must read for anyone who wants to say goodbye forever to a toxic chapter of American capitalism.” —Arianna Huffington, Founder & CEO, Thrive

“In vivid prose and reporting that lights up each page, Gelles probes how Jack Welch influenced a generation of business leaders to ignore the feelings of employees and the malign impact of corporate mergers, and how decisions made today might strangle a company’s long-term health. This powerful book shows why GE and so many companies run by Welch’s disciples have badly stumbled, along with Welch's reputation.” —Ken Auletta, author of Hollywood Ending

“A compelling indictment of short-termism that offers an urgent call for business leaders at all levels to be responsible and care. Gelles clearly makes the case that business is more than for profit and that it is by doing good that you can do well, and provides us a roadmap for the way forward. An indispensable read for our time.” —Hubert Joly, former Chairman and CEO Best Buy, author The Heart of Business

“Jack Welch is one of the more important political and business leaders in modern American history. His strategies destroyed a once-great company, and more broadly, he helped pave the way for the destruction of the American middle class and the erosion of American democracy. For years, the business press has lauded Welch's visionary spirit, but few reporters have ever asked what that vision was. With The Man Who Broke Capitalism, David Gelles has delivered a book that explains what we can learn from a man like Welch, as we try to restore the shattered society he left behind.” —Matt Stoller, author of Goliath: The 100-Year War Between Monopoly Power and Democracy

“A robust and necessary portrait of a complex figure. A lesson in shareholder value vs. stakeholder value that will only become more relevant in the coming years.” —Scott Galloway, New York Times bestselling author and serial entrepreneur

“A provocative page-turner that exposes the dark truths about Jack Welch, America's first celebrity CEO. After building a sprawling global empire through unmanageable mergers, shady accounting, and heartless downsizing, with undue veneration, and countless imitators, it's good to see Welch finally cut down to size.” —Jennifer Taub, author of Big Dirty Money

Library Journal

12/01/2021

In Wastelands, award-winning novelist Addison turns to nonfiction to profile a rural community so angered by the damage done by pollution-spewing Big Agriculture that it sued the worst offender—and won. New York Times best-selling author Bremmer sets us on a Collision Course, predicting that more pandemics, increased climate-change complications, and life-altering new technologies will inevitably be a part of our future (100,000-copy first printing). Distinguished Stanford political scientist Fukuyama, perhaps best known forThe End of History and the Last Man, now examines Liberalism and Its Discontents at a time of political upheaval (75,000-copy first printing). "Corner Office" columnist at theNew York Times, Gelles calls General Electric CEO Jack Welch The Man Who Broke Capitalism, indicting him for the harm done by his brand of capitalism and showing how some companies are trying to undo it with different strategies. Award-winning journalist Hill ( BET News) and New York Times best-selling author Brewster (The Century) join forces in Seen and Unseen, considering videos like those showing the killing of George Floyd and the harassment of Christian Cooper to investigate how technology has impacted our conversations about race (100,000-copy first printing). Photographer Palley's Into the Inferno recalls eight years spent documenting California's raging wildfires, showing that the state's fire season now lasts year-round and calling for climate action (see also poet Kevin Goodan's Spot Weather Forecast). Former president of the Uyghur Humans Rights Project and now a commissioner for the U.S. Commission on International Religious Freedom, Turkel uses memoir in No Escape to reveal China's ongoing repression of the Uyghur people.

FEBRUARY 2023 - AudioFile

This takedown of the legendary CEO of General Electric would be interesting even without Kevin R. Free’s exceptional performance. But his artistry provides exceptional listening. Nevermind Free’s appealing diction, impressive phrasing, and ability to orchestrate the ebb and flow of mood or tone. What really impresses is how perfectly he applies these vocal skills to every dramatic detail and underlying thread in the gripping story of Welch’s brutal management style and its lasting impact on American business culture. The author shows how Welch and his acolytes reneged on traditional corporate responsibilities by prioritizing short-range profits, cutting jobs, and misleading the public with dishonest accounting practices. They rewarded shareholders and managers at the expense of workers, customers, innovation, and even safety. T.W. Winner of AudioFile Earphones Award © AudioFile 2023, Portland, Maine

Kirkus Reviews

2022-03-15
A deconstruction of a famed mogul’s harmful influence on American business.

Gelles, the “Corner Office” columnist for the New York Times, focuses on Jack Welch (1935-2020), CEO of GE from 1981 to 2001, whom he sees as “the personification of American, alpha-male capitalism, a pin-striped conquistador with the spoils to prove it.” Welch joined GE in 1960 after completing a doctorate in chemical engineering, soon rising through the company’s ranks. Notoriously “impatient, impulsive, and crass” as well as ambitious and energetic, when he took over as CEO, he lost no time inaugurating his vision—and that of economist Milton Friedman—of “maximizing profits at the expense of all else.” GE had been known as a caring company that gave its workers exceptional benefits. Welch shattered that reputation, enacting massive layoffs, carrying out extensive mergers and acquisitions, and turning GE into “a giant unregulated bank.” When Welch ascended at GE, writes Gelles, “half of GE’s earnings came from businesses dating back to the Edison era: motors, wiring, and appliances. Yet Welch, an extremist in all he did, drastically overcorrected. Instead of trying to fix American manufacturing, he effectively abandoned it, and would soon start shuttering factories around the country and shipping jobs overseas.” His influence was far-reaching. By the time he retired, 16 public companies were run by men “who had studied at his knee.” However, remarked a Goldman Sachs board member, “they were just cost cutters. And you can’t cost-cut your way to prosperity.” Gelles capably traces GE’s downfall from being the most valuable company in the world in 1993 to its begging for a bailout in 2008, and he exposes the many business titans who followed Welch’s strategies. He sees hope, however, in the “handful of idealistic capitalists”—leading businesses such as Unilever, PayPal, Patagonia, and Seventh Generation—who consider their companies’ impacts on employees, the environment, and society.

A vigorous argument for a more humane capitalism.

Product Details

BN ID:	2940176380651
Publisher:	Simon & Schuster
Publication date:	05/31/2022
Edition description:	Unabridged
Sales rank:	783,650

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