General Electric CaseJohn D’Arco10/17/121) I believe that fix, sell, or close is an effective strategy for a conglomerate like GE because a company with as much capital and reach as GE shouldn’t have to settle for being a small player in an industry. Since GE is a conglomerate, there is no aspect of their business that defines them, that is irreplaceable, putting every sector in the crosshairs to perform or to be disposed of. With the ability to perform M&A, GE can make acquisitions into markets that they feel can be successful, and divestiture those businesses that are not performing. Between 1981 and 1991, under Jack Welch’s tenure, GE sold off more than 200 businesses while acquiring 371.
An important aspect of the Fix, Sell, or Close strategy is that it serves as a quick snapshot, a mission statement, into how Jack wanted his company to run, but he elaborated on how it could be effective for GE. He elaborated on this strategy by categorizing his businesses. Core businesses, with a priority of productivity and quality; high-technology businesses, challenged to “stay on the leading edge” by investing in R&D; and services, required to “add outstanding people and make acquisitions”. With a clear picture as to how their businesses were to run, managers were able to implement Jack Welch’s plan with more conviction and vigor than if he had just shouted Fix, Sell, or Close at them.
Jack also wanted to make sure that his vision was being carried out, so he was determined to make GE more “lean and agile.” He eliminated 74,000 workers and cut hierarchical levels from nine to as few as four. Before, businesses would have to communicate with sector groups if they wanted to reach the CEO. Now Jack can effectively run each business since he is closer to all of them than ever before. This effectively acts as a vertical integration, eliminating the middle-man, much like the CSD companies did in the cola wars by buying the bottling companies to improve efficiency in their business model.
Also, since they were getting rid of businesses that were not #1 or #2, they did not have to worry about running into the problem that Continental did when tried to straddle Southwest. There would be no straddling under Jack Welch. Either the business became fundamentally better (Fix), or it would be gone. (Sell or Close) Straddling has ruined many companies’ brand names and profit margins, and GE was not going to chase after competitors that could not be caught. He wouldn’t let them become Microsoft, chasing after search because they missed the boat. If Jack Welch was CEO of Microsoft, I imagine that after a bid to get Yahoo fell through, he would have gathered his 14 business heads in one of his “shirtsleeve sessions” and tell them, “Hey, we tried. Let’s go find another industry to be number 1 or 2. Don’t
In 2009, the Federal Trade Commission charged the four-nation company with illegal trademark infringement. Microsoft was fined $25 million, as part of a class action lawsuit against the company in 2011. And after Microsoft was found liable, Microsoft brought a class action lawsuit against other companies, too (Apple and Google).
Why would a company like General Electric that was found to have violated America’s laws be fined millions of dollars by the U.S. government for refusing to use the European Union’s “Clean Tech” initiative? If you look at General Electric’s compliance record, which the FTC’s complaint lists as “a clear and present danger to consumers,” it’s clear that the average customer doesn’t want to buy that type of crap. What’s the next step, anyway?
• “If you want a free car insurance plan you should have one. But, if you want someone to know who pays for it you need a more specific plan.”
• According to The New York Times, “many consumer-oriented companies in America face the potential financial cost of a big overhaul in their business models’ because of the growing uncertainty about the benefits that would come with a “clean energy” policy of the future’ [emphasis added].”
You’re kidding so hard. General Electric’s CEO, Gary Mays, was quoted as saying, “We’re going to do a lot more if you can’t deliver on our vision of a company that has a healthy workforce and a smart workforce that pays the right cost.” There’s more. Why aren’t companies like General Electric that were found to have violated E.U. laws being forced to pay thousands of dollars in tariffs in order to reduce their energy use? Well, look, if GE didn’t have to pay the costs to manufacture their products (which it did, by the way), there’s nothing their customers want in the form of a Clean Energy Plan. If GE wanted to be a good employer. But is it really the choice of big corporations?
One can see clearly from this article, if you look at any of Bill Buckley’s reports when they mentioned GE’s involvement there in the Enron scandal that they were also part of the investigation that found the company engaged in illegal and unethical practices, including the Enron-related lobbying.
They also mentioned Bill Buckley as some kind of “Big Pharma-like lobbyist.” If you look at those reports, you will see the same pattern as these two. In a nutshell, they are concerned with how Big Tobacco has been portrayed by Bill Buckley because he is part of an industry that represents a big chunk of Big Tobacco lobbyists.
In 2009, Bill Buckley had the misfortune of getting his hands on a company named PPG Industries, and was tasked with looking over corporate documents related to GE’s alleged dealings with PPG. The company, which represents more than 50,000 Fortune 500 companies around the world, was hired as an independent consultant by the Department of Justice to come up with a $50 million price tag for taking over GM’s role in the Enron