Pontifications: Two books explore the fall of GE

Lights Out: Pride, Madness, and the Fall of General Electric

By Thomas Gryta and Ted Mann

Mariner Books, $17.99, 361 pages

The man who broke capitalism, how Jack Welch gutted the heartland and destroyed the sole of corporate America – and how to undo his legacy

By David Gelles

Simon & Schuster, $28.00, 264 pages

August 1, 2022 © Leeham News: Two recent books about GE and its most prominent CEO, Jack Welch, offer different focuses and fascinating insights.

By Scott Hamilton

one, Lights out, is a detailed chronicle of the Welch era and those that followed. This book goes into far more detail than Gelles’, which is more of a biography of Welch than a company history – although there’s obviously a cross-pollination of both.

Gelles, a reporter for the New York Times, addresses some discussions about Boeing and the Welch-influenced people who came to run Boeing, particularly Jim McNerney and David Calhoun. But don’t expect Gelles’ book to delve deep into the impact of Welch’s tutelage of McNerney and Calhoun on Boeing. The discussion is superficial. This is, after all, a book that focuses on Welch.

damn picture

Gelles paints a damning picture of how these executives, who left GE to become CEOs at other companies, have by and large ruined the shareholder value (GE’s mantra) in their new positions. Ironically, for all his criticism of McNerney, Gelles points out that McNerney has increased shareholder value at Boeing in contrast to other Welchies.

Lights out, on the other hand, Boeing is hardly mentioned and McNerney is mentioned only in passing. Calhoun is only mentioned once. But the GE story is much more detailed in Lights out than in Gelles’ book. This might be expected when you realize that the authors are economic reporters for the wall street journal, while Gelles’ Employer is for a general audience.

Gelles’ story about Welch is more personal, going into his childhood and giving us a close look at what shaped his personality. He makes a good case for how boards not only sought GE executives to run their companies, but other companies also emulated GE’s business model. Lights out is more of a corporate story.

Culture

Gelles writes about the culture at GE and how it permeated other companies, including a cursory look back at its impact on Boeing. Lights out does not expressly make this connection, especially since Boeing is a footnote in a figurative sense. But by reading either book or both, the culture and business practices at GE are very familiar with what emerged at Boeing when GE practices were first introduced by Harry Stonecipher, also a GE alumnus, starting in 1997, followed by McNerney and even non-GE CEO Dennis Muilenburg. That’s not a compliment.

A more incisive look at GE’s culture comes from an older book, lessons from the titans, Co-authored by a director of Melius Research, Scott Davis. Davis recounts how GE tried to fire him for writing a negative research note while he was at Morgan Stanley. Boeing tried that in 2007 or 2008 with a new reporter Flight international before reporting for work because Boeing was annoyed with his previous coverage of the 787’s development difficulties. The cultural parallels between GE and Boeing told in the three books are stark.

Lights out and the Welch book are worth reading. Lights out is a bit fiddly. Gelles makes you want more. It’s your decision.


air wars

My book, Air wars, the global battle between Airbus and Boeing, tells the story of 33 years of competition between the two rivals and the impact on both of John Leahy over those 33 years. The book is a quasi-biography of Leahy and sort of a sequel to the 1982 book, sports game, which was then considered the definitive story of the competition between Boeing, McDonnell Douglas, Lockheed and Airbus, which was only 12 years old at the time.

air wars is rated 4.5 out of five by readers on Amazon and 4.3 on Goodreads. The book was also ranked among the top 10 books read for 2021, including by the prestigious Royal Aeronautical Society.

Royal Airline

Named to Top 10 List of Aerospace Books for Christmas Picks, 2021

Puget Sound Business Journal

(Seattle area.) #1 on the 2021 Christmas list of aerospace books.

book authority

#1 on his list of Best New Aerospace eBooks to Read in 2022.

Chris Sloan, The Airhive

‘A worthy follow-up to ‘The Sporty Game’, the 1982 book by John Newhouse, considered at the time to be the definitive book on the competition between Boeing, McDonnell Douglas and the nascent Airbus.

Jim Sheehan, Aviation Industry Consultant

There is so much model and OEM information that it is sure to become required reading for anyone wanting to understand the last fifty years of commercial aviation.

Loved all the quotes and stories.

Dan Catchpole, aviation author

Air Wars is a behind-the-scenes tour de force look at global competition from Boeing and Airbus, and in part a biography of Airbus chief salesman John Leahy, the man who forced Boeing to redesign the 737. Longtime aerospace analyst and journalist Scott Hamilton guides readers through the twists and turns of the decade-long battle between the two companies.

Dan Reed, aviation writer

Using the long and monumental career of John Leahy as a vehicle to tell readers about the 51-year struggle between Airbus and Boeing is an interesting and inspiring choice by the author.

air wars is available in paperback and e-book from Amazon and paperback from Barnes & Noble.

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