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William Cohan

lines on the record: 60
first: 2023-02-24
most recent: 2023-02-24
sittings or episodes: 1
sources: podcast

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“Well, thank you, Trey, for those kind words and this excellent conversation, which I really enjoyed. You know, I'm easily Google, and I have a website Williamcohan.com, which lists all my books and many of my articles that I've been writing ever since I left Wall Street back in 2004. And I encourage people if they have questions or want to get in touch with me. I'm happy to do that.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“They know something that you don't know, even though you are the CEO and they're not. You know, it was all kind of preventable in my mind. This didn't have to happen. I didn't have to write this book if this hadn't happened, but it did and I did, and that's where we are now, company being split up into three pieces and, you know, General Electric Disappearing after 130 years.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“That's major lesson number two making sure you have the right success. And major lesson number three is if you are the successor, make sure you understand the businesses that you are inheriting, that you are charged of running. And if you're going to keep them in the stable and really make sure you understand them. And don't ignore the warnings that you're getting from people who do understand the businesses that maybe you don't understand as well. And all that, of course, is what Bel Jeff Immolt. And then, you know, don't surround yourself with sycophants and yes men and people telling you what you want to hear. Make sure you are open-minded enough to listen to people who have dissenting points of view and not dismiss them because they are offering you a dissenting point of view. You know, they're smart too. They've been in this company a long time too. You've been paying them a lot of money too.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Tim Cook or Elon Musk or Jeff Bezos is, hey, just because you're, and I think actually Jeff Bezos understands this and has said to his employees, it's just going to be a matter of time before we're gone. So let's see how long we can keep that from happening. Just because you're on top now doesn't mean you're not vulnerable to all sorts of macroeconomic and microeconomic events. One of which is, of course, making sure you choose the right person as your successor. And of course, Jack admitted that he chose the wrong person and become susceptible to Jeff's charms. And that's often what happens in these kind of succession races. It's often the most politically adept person who charms the pants off of the person he needs that is making the decision that gets those jobs as opposed to maybe the person who might actually be the best person to take the company forward.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Well, first of all, just because something seems that it has a mode around it, that it's impenetrable, that it's imperial, that it's the most valuable company in the world, that somehow that inoculates it from a fall. Joseph Schumpeter, the Austrian economist, talked about creative destruction and that the seeds of a company are sown early on. And I think that that is especially true in the case of GE as we've discussed. You know, this idea that somehow you're invincible, which was basically Jack's theory of the case, is you said that he had handed off to Jeff what he thought was a royal flush. Jeff certainly didn't see it that way, but that's what Jack believed. He thought that he had created this behemoth that would allow for another 130 years and had been surrounded by an impenetrable moat. So lesson number one.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“And so he thought this familial relationship would be beneficial to him in GE and that, you know, Nelson Pelts, who he referred to as the smiling crocodile, wouldn't bear his teeth when things weren't going as well as Jeff had promised they would. You know, I think he was told by Wall Street bankers that GE was ripe for an activist investor. So he thought he might get one that was what he thought would be friendly and more sympathetic to him than another one who might come in that he didn't know. But of course, you know, two years later that all backfired too.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Was, of course, a ridiculous use of capital, completely wrong investment of capital. I should have paid down debt. Probably should never have gotten rid of GE capital to begin with. But he thought he was this so-called Project Hubble, which was the selling of GE capital, getting GE out of the SIFI business, getting GE out from under the Federal Reserve's regulation, getting rid of $2 billion of annual expenses was the way to go and to sort of ratify what he thought was his genius in doing all of that. He brought in Tryon Partners, which was an activist hedge fund headed up by Nelson Pelts, and he thought that they would be friendly because when he was at Dartmouth, he was friends with a guy named Tom Garden, who was Edgarden's brother, and Edgarden is Nelson Peltz's son-in-law, who worked at Tryon Partners.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“To then go out and raise, I think, an additional $12 billion of equity for a total of $15 billion, which they felt they needed very much at that time. And, you know, again, it proved not even to be enough. G had to cut its dividend. And then, of course, Jeff decided he had to sell NBC Universal to Comcast without an auction to raise even more capital. G was in a desperate situation. But by 2015, I think Jeff thought the ship had been righted, that he felt like he had bought Alstom, he had decided to sell GE Capital and raise even more capital, and he used that money, as you said, he made a big mistake again. I mean, I think he made a mistake by selling GE capital off in pieces, but then to use the proceeds of that to spend $30 billion or so. Buying back stock at $45 when the stock later”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Obviously, those two things were separated by seven years. GE wasn't Warren Buffett's first rodeo. Warren had done the same thing at Goldman Sachs and at Bank of America. So the Warren Buffett preferred equity seal of approval was something that was in the air at that time. And of course, Warren being the genius that he is, he knew that these firms, these financial institutions couldn't get money other places and that it would be a huge vote of confidence for them with their investors, their creditors, their stakeholders, their depositors if he came in and sort of ratified the genius of the management and the business plan. And so Warren did that, as I said, at Goldman B of A and GE. And that enabled GE.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Do their job enjoyed too much being on the board of GE and failed to do their job, which was to hold the CEO accountable on behalf of the shareholders. And they didn't do that. And instead of explaining why they didn't do that to me or engaging with me, they just ignored me and gave me the stiff arm, except for largely Ken Langone and a couple of others.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Or employees, if something is going wrong, you're supposed to stand up to the CEO and push back and hold him or her accountable. And this board didn't do that, was constantly being overrun by Jeff. And of course, when I come along and want to talk to them about what happened and why they made the decisions they made and why they didn't stand up to Jeff and why they let him get away with all these things or as Dave Calhoun said to making the wrong decision every time he had a big decision, why didn't they challenge him on these things instead of talking to me and explaining to me why they made the decisions that they made or why they allowed Jeff Immolt to, you know, sort of bulldoze them through various board meetings and they were getting paid whatever $400,000 a year to go to some board meetings and they just didn't.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Nowhere, Trey. I mean, with some notable exceptions who I know they're notable because they talk to me, they had the guts to talk to me. So Ken Langone, who jacket appointed, and then Jeff had fired, or even Sandy Warner who tried to stand up to Jeff and was fired by Jeff. So what was clear is that if you wanted to take Jeff Immalt on in the boardroom, you were going to lose your board seat. And of course, you know, GE was, of course, the pinnacle of corporate boards, probably the most prestigious corporate board to be on. And so if you were asked to be on that board, the last thing you wanted to do was to be removed from the board. And of course, that meant that you did not challenge Jeff Immalt. Well, of course, the purpose of a board is to challenge a CEO to be the last gasp for shareholders or creditors or stakeholders.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“To listen to the credit rating agencies. I mean, when credit is the lifeblood of your company in like almost every company, you know, you have to protect. And when you've got a triple A credit rating, you've got to protect that with everything you've got. Because that goes to the very confidence that people have in your company. And it's not just an equity story. It's a credit story. People just don't understand credit. They don't understand the credit markets. Even though most of us borrow money and most of us have interactions with the bank, it's incredible how few people understand what's going on in the credit markets and what the credit markets are trying to tell us. And Jeff Immelt didn't understand that. And if you have somebody like Bill Gross and like Jim Grant telling you, laying it out for you, the problems that you are potentially facing.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“You know, the risks that GE and GE capital are taking, and he would lay out the balance sheet risks, and he would talk about how when you have a AAA credit rating, you can only go one direction. You know, there are no quadruple A credit rating companies. There's only companies that are less than AAA and that, you know, just because GE was sort of a paragon of virtue for many years, it had sort of implanted the seeds of its own destruction in the company. Nobody was realizing it. And so, you know, I just love that, the fact that Jim Grant, you know, who wears bow ties, saw this coming and seems very professorial. And Jeff Immolt, you know, the master of the universe, couldn't possibly stoop to listening to something that Jim Grant was saying and laying out repeatedly and early. I mean, and not to listen to Bill Gross. I just don't understand that.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Do but if you're like the CEO of GE, you're only like an imperial deity kind of thing. And so, you know, are you going to stoop to taking the advice of Jim Grant? No, probably not. And yet Jim Grant, you know, repeatedly, year after year after year.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Well, first of all, he's such an incredible person to begin with, and he's so sort of sui generis. And, you know, he's become an iconic character because he writes, grants interest rate observer, so thoughtful and so well and so insightful. He picks up on issues going on in the credit markets, which are, of course, four or five times the size of the equity markets and people don't really understand the credit markets. And more importantly, they don't understand what the credit markets are telling us. And, you know, one thing I love about Jim is he understands what the credit markets are telling us. And then he tries to warn people through his newsletter and his publications about what's happening and how, you know, so he sees around corners and sees things coming that very few people.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Being completely unregulated to being the ultimate unregulation. And it was costing them like 2 billion plus a year. And Jeff Immelt felt like the Fed was in everything that it was doing and was sitting in on its board meetings and was basically regulating its financial business, which was something he almost could have dealt with, although he hated it and it was costing him a lot of money a year. But he was afraid they were about to encroach into the industrial side of the business and not let him run that business the way he wanted to. So he resolved that he basically had to get out of G Capital, which was an incredibly fateful decision and he thought was so brilliant in what he did it in 2015, but two years later resulted in his being fired from the company.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Well, two things happened. First, they were not part of the TARP. So all these other financial institutions were getting bailed out and GG was not part of that. Then all these lines of credit were made available to essentially backstop the commercial paper markets and other short-term lending markets. And Gigi had to beg to be included in that so that, you know, if they weren't included in that, then there'd essentially be a run on the bank at GE because no one would invest in their debt or provide them short-term financing because essentially they weren't backstopped by the government, but other financial institutions were. So they had to scrape their way to get into that. And they were let in. But then, of course, the result of all that, they were declared a SIFI, a systemically important financial institution, which meant that they were regulated by the Fed. So they went from”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“For bankruptcy, and nobody had a clue. I didn't have a clue, and I worked there. I didn't know until I started reporting this book.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Had dried up in September of 2008, and Gapital no longer had access to that kind of funding. And basically Hank Paulson came in and saved the day for Jeff, told him to go speak to Sheila, who was head of the FDIC. And then Sheila basically was forced to let GE into all of these financing lines of credit that the government was making available to other financial institutions. All this occurred without anybody realizing what was going on. Everybody was focused on Wall Street banks going down the tubes or focused on the car companies going down the tubes. But here was GE, you know, our most admired and respected industrial company, one of the largest financial companies unregulated in the country. And it was going down the tubes, literally had twice gotten the papers ready to file Gap.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Probably told him in 2007 it's time to sell this business. And he had lined up Goldman Sachs to help with the sale of the business. And Jeff sort of waved around this report from McKinsey and says, no, here McKinsey says, you know, this real estate bubble is going to continue for the foreseeable future. Well, of course, we know what happened. McKinsey was wrong. Jeff should have sold the real estate business at that time and would have made a ton of money. Instead, he didn't sell it. A lot of that profit was lost. And then, of course, come the 2008 financial crisis, September of 2008. Jeff had to go hat in hand to Hank Paulson, the Treasury Secretary, and beg him to solve the problem that GE capital is having in borrowing in the short-term commercial paver markets because those markets”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“And had, despite warnings, right, they occurred either from Bill Gross early on or to a guy who worked at Stanley Drunk and Miller's Hedge Fund or my favorite person in this whole story, Jim Gragg, who wrote repeatedly out the risks that were inherent in G Capital. And basically, you know, Jeff would go down and meet with the rating agencies. The rating agencies would complain about the risks that Jeff was taking in his funding model at G Capital. And he basically pooped it all and ignored it. And it wasn't until, you know, he would, he ignored the advice given to him by Michael Prawley, who was running GE's real estate business at GE Capital that had been tremendously successful and made a lot of money. And Michael.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“We had a lot of faith in. I think Jeff really liked the earnings that G Capital produced year after year. But I think he didn't have the same intuitive inherent understanding of the risks that Jack did or that Jack's leaders did. And Jack, of course, famously got rid of Gary Wend, but at least replaced him with Dennis Nayden. Jeff got rid of Dennis Naden and replaced him with Mike Neal, who I think wasn't quite as willing to stand up to Jeff. And Jeff thought he understood the risks that were inherent in G capital and turned out, of course, he did not in a big way.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“2000s to 2007, 2008. What was obviously quite clear to me is that actually GE Capital was pricing risk properly and was getting paid for the risks it was taking, unlike every other financial institution. And that sort of reinforced in my mind sort of what a good business GE capital was. So I think Jack understood the risks that were inherent in G capital and those that he didn't understand.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Expensively. And, you know, when I was there, people used to complain that we were, you know, the most expensive lender around, like Wall Street banks were much cheaper and that in terms of pricing and fees and whether or not they took warrants or just to spread over LIBOR or whatever it was. And at the time, I used to think, Jesus, when I thought about it and all that is, you know, how are we going to compete against first Boston or Goldman Sachs or Morgan Stanley who are providing these bridge loans for these buyouts and other things were so expensive? But, you know, we would do deals that other people wouldn't for starters. And, you know, when I thought about it in the writing of this book and of course having then lived through any number of financial crises starting from 87 to the early 90s to early”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Well, again, it gets back to simple mathematics, I guess, arbitraging price that GE had to pay to borrow money with the price that it could get to lend out that money. And its cost of capital was very low because it was a AAA rated credit, one of maybe 12 at that time. This was sort of before the rating agencies went berserk and started rating all of those mortgage-backed securities AAA. And so Jack just, even before he was CEO, he was put in charge of G Capital after his tour at Plastics. And he just sort of fell in love with he had in what it could do. And that was unregulated, had unlimited access to capital, and could borrow cheaply and lend out.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Me, he did regret firing Dave Cody, who was running the major appliance division and then eventually became the CEO of Honeywell later after the GE's Honeywell deal fell apart. And Honeywell became worth more than GE. And I think perhaps Jack realized that he had underestimated Dave Cody. But aside from that, kind of very few regrets.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“I think that if Jack had bought Honeywell, it would have made a big difference in tilting the balance of the earnings power at GE back to the industrial side, making it less reliant on GE capital so that when the trouble came in 2008, it would have been less existential for GE. I did talk to Jack about his decision to abandon the Honeywell deal, and he did not seem to have any regrets. His position was sort of, you know what, we didn't really want to buy it in the end anyway. We found things we didn't like after we got into the due diligence, you know, the post-merger due diligence phase. And so the EU's forcing us or wanting us to sell various assets that we didn't want to sell gave us the opportunity to walk away. And we decided to do that. I think in retrospect, that was a mistake. He also told”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“He got his 10 year extended to September 2001 to try to get that deal done, which a competitor, United Technologies, had reached an agreement to buy. And Jack could not let, could not fathom the idea of United Technologies merging with Honeywell. So he decided that he had to top that bid and get control of that company. And he succeeded in reaching a merger agreement with Honeywell. And then the US Justice Department approved the deal relatively quickly, but the EU became a major roadblock. And Jack ended up deciding to walk away from buying Honeywell because the EU wanted him to sell a bunch of businesses that he didn't want to sell. And as he told me, you know, he thought he was going to buy an 18-hole golf course and he only got 15 holes. So he didn't want to go through with buying the golf course.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“So, Utah International, which was a mining company that his produce answered, or he certainly endorsed getting out of computer industry. G couldn't compete with that and shouldn't have been trying to compete just like many years later, Jeff tried to make GE into a software development company, which there's no business GE hiring a bunch of software developers in Silicon Valley, flushed $5 billion down the toilet. But Jack did not regret his moves into, say, insurance, which Jeff hated and got rid of mostly. I think, frankly, many, I think we wouldn't, I may never have written this book or we may never have been talking about the breakup of GE if Jack had gone through with the acquisition of Honeywell, which, you know, was happening just as Jack was leaving. It's more supposed to be leaving in 2000.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Oh, well, of course, the very first thing that he said to me when he sat down at our first lunch at the Nantucket Golf Club was that he regretted his choice of his successor. So this is a man whose biggest decision that he made as CEO was one that he ended up regretting. That's a pretty big thing to admit to. And he was very frank about it repeatedly. So that sort of startled me. And so sort of right from the start as I was reporting this book, I knew that this was not at all what I thought it was going to be and that there was this incredible story about how that happened. When it came to business decisions, yes, he obviously regretted Kidder, but he gave himself high fives for making chicken salad at a chicken shit. Honeywell. Now I look at the Honeywell situation. He certainly had no regrets about getting rid of.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“All this noise and the earnings, and yes, there was a lot of that going on, which could probably added to the cloudy picture that resulted in GE's earnings. It was a complicated company, incredibly complex, but for a long time, like during Jack's years and even into some of Jeff's years, the market kind of loved this company in the same crazy way the market loves Tesla today. There's not much different. I mean, they reward Tesla with this absurd multiple of earnings. They rewarded GE with this absurd multiple of earnings. At one point, people came to their senses and GE came back down to Earth, leading to, you know, the breakup. At some point, Tesla is going to, investors are going to realize that Tesla is really just in the end a car company. It's not like a car company that's landing electric cars on Mars, and we should all be rejoicing.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“For worse, and obviously, during the financial crisis, it became a real problem, but it's also a financial services company and a big one and a big unregulated one. And that I've intentionally created and allowed to grow and making a lot of money by arbitraging our AAA credit rating, borrowing short and lending long. And that's what, you know, as he told me, that's a lot easier to make money in that business than it is to make a jet engine. So I have a responsibility to make sure that I don't miss my earnings estimates. And I think that's what a responsible CEO does. Not like he's stealing or doing, you know, you could say that I guess by doing all these M&A deals, which you did a lot, you know, earnings always got fuzzy and it was hard to tell, to compare one quarter's earnings to another or one year's earnings to another because there was all”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“At my industrial businesses aren't going to make it, aren't going to produce what I hope they're going to produce, or if there's a hiccup along the way like the kidder thing that I did not anticipate. And I have all of these assets over here in GE Capital that I can monetize either by selling warrants that I've obtained by doing a deal or I own buildings that I got by making equity investments in real estate or I have loans that I can sell in the marketplace that are even maybe trading above par where I issued them. Then, you know, I've got an obligation to do that. And if I don't do that, that's kind of negligence on my part. That's Jack's argument. And other people see that as manipulating earnings kind of in the jack camp on this, that, you know, he's the CEO of this entire company. It's not just an industrial company for better.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Don't do that, my credibility is lost with investors, my credibility is lost with the Wall Street research community, my credibility is lost with Wall Street bankers, and I need all of them like a lot. I cannot, you know, I'm GE. I'm like the biggest company in the country. And I've been a key component of the Dow Jones Industrial Laboratory since the 1890s. I have a AAA credit rating. I have a responsibility. We were the founder of the business roundtable. I'm a big defense contractor, all sorts of products that people, everyone in America and maybe even around the world uses and relies on and takes for granted. I have a responsibility to make sure that I do what I say I'm going to do every quarter. So if I can tell two-thirds of the way through the quarter,”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Admitting to manipulating earnings and finding earnings that necessarily weren't there or stealing from the future to solve a problem in the present, robbing Peter to pay Paul, whatever you want to say. And so they say, well, Jack, there he is admitting to this himself. And I think what I have sort of concluded and figured out is this. This was Jack's mantra. Okay. If I'm the CEO of this company and this company is, let's just say, for argument's sake, half an industrial business and half a financial company with $650 billion of assets, you know, all around it. And I am in the business of creating shareholder value. If I tell Wall Street research analysts every quarter I'm going to make X dollars per quarter per share. And then if I”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Talk about a point that Jack made when I first sat down with him. He would make his points early and then reiterate them every time we would meet. And this was another one of them, like don't fall with the people who say, I manage earnings or in your words, I manipulated earnings. Look, even in Jack's own book, straight from the gut, particularly around the first kidder miss, which is going to cause Jiggy to miss some earnings that Jack had told analysts he was going to make, he writes in the book that he then asked his senior leaders, see if they could find some earnings somewhere quickly, which people have looked and they did and then he sort of was able to meet the earnings projections he had told analysts he was going to make. And while also absorbing the kid or unexpected kinder losses. So people look at that and say, well, here it is. He's prima facial.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“He tended to make the right decision whenever Jeff had a major decision to make. He tended to make the wrong decision. And I think if you look objectively at the facts, that's pretty accurate.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Much less than the Peabody people, and that created a lot of tension. But even then, he did manage to get out of it despite everything when he sold what he could of kid or pee-body to Pain Weber and then Payne Weber got bought for $10 billion by UBS, the big Swiss bank. And G had bought Kidder for like $600 million and obviously put hundreds of millions more into it and absorbed hundreds of millions of losses, but got $2 billion back when UBS bought Pen Weber. So, I mean, sometimes it's better to be lucky than good. And Jack's, you know, I have to say, you know, Dave Calhoun told me, who was a longtime GE executive, who's now the CEO of Boeing, told me, you know, it's a great and incredibly perceptive.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“After acquiring NBC, he was already doing acquisitions for cable businesses and starting these cable channels that other people were way, way behind. And he just had this ability to see around corners, which is incredibly valuable in a leader. Now, that doesn't mean he did everything right. I mean, obviously, we talked about his personal behavior, which wasn't so admirable. But, you know, after he did the RCA deal, he was so sort of high on his own stash that he decided to buy Kitter Peabody of all things, which was a venerable old investment bank that GE and GE Capital had no business merging with it. And I was actually there during that time period. And that was an unmitigated disaster. But even that, there were scandals and there wasn't the synergy that he thought and the GE capital people were getting paid.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“And Jack probably would have made up his mind early on, but he was also capable of having his mind changed and being open-minded enough to entertain a clever and reasonable argument about why whatever is being proposed should actually happen as opposed to not happen. I mean, this is the guy who started CNBC, who started MSNBC. We may be sorry we have those now, but nevertheless, he and his team, led by Bob Wright and David Zaslov and Tom Rogers and others created what now are two very important cable networks and had the ability to or listen to the people who had the ability to see that say just owning NBC a linear TV network was not going to be enough in the future. And so early on, you know, within the first few years,”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Myself when I spent time with him. He was incredibly charming and open, as I said. And more than that, like I would go to lunch with him or out with him and people would come up to him just to say hello. I mean, he was just like this, had a magnetic pull even in his later years when he was far much no longer the CEO of GE. He was a legendary figure unlike almost anyone else I've really ever encountered or written about or spent time with. So, you know, sort of in the JFK Jr. kind of sphere with somebody I knew growing up. And so Jack was like that. And I think you're right over time. I think he softened. He became less zealous, less doctrinaire. Like he would still go into a meeting where they were considering some deal or some strategic decision.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Well, of course, he hated that label because of what it implied. And so at the same time that he could sort of be ruthless about the need to reduce the bloat in the GE bureaucracy, which, you know, I think honestly, you have to do, even though it means that real people who have devoted themselves and their careers to this company may lose their job. And so that's, of course, harsh. And I do think at the same time that he could do that and do what needed to be done, you know, there are people who would tell me stories of some guy told me a story of how he met him on the beach in Marblehead, Massachusetts, north of Boston, and the guy remembered his name and his wife and asked about his kids. I mean, Jack just had this real connection with people. There was a certain magnetism there, magnetic pull towards him. And I, of course, found that.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Their boss is sort of where they're treated in these situations. But despite Jack being one tough son of a gun, the people who work for him really admired him, felt that they enhanced their careers and got more out of them than anybody else could have. And by the way, I think there's a contrast there with what people felt about Jeff Immelt.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“In his early years, this neutron jack, the idea being he would fire people and leave the building standing. I think he reduced headcount by like 100,000 people. Great leader of this company if one is to judge a leader by various objective measures of increasing market value, increasing reputation, increasing influence, increasing world respect. Trey, even when I spoke to a lot of former GG executives who had been fired by Jack and who had therefore lost the opportunity to become his successor, they still praised him and they still professed their love for him. And, you know, many of them were pallbearers and his funeral at St. Patrick's Cathedral. So I was quite taken by that, you know, because usually my experience, either my own experience on Wall Street or in writing books about Wall Street and other things, you know, there's not a lot of love that people have for.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Well, of course, my interactions with Jack, when I was working at GE Capital and when I went on that trip to the lighting and major appliance businesses were minimal to Null. But of course, when I started running this book, he agreed to spend a lot of time with me and tell me his story and answer all my questions. And we spent many hours together before he passed away in March of 2020. So obviously I learned, I mean, he was incredibly charming and open and on the record. And, you know, it was more than I could have asked for. He was not in the best of health then, but his mind was still sharp. But I did discover all sorts of things about him that, you know, I think that he could be cruel to employees. He could be sort of heartless. He was once”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“After World War I, the British wouldn't get a hold of that technology and try to one up us in this new technology of radio. And then in the 1930s, the Justice Department forced GE to divest RCA, becoming a public company on its own. And then one of Jack Welch's biggest successes in his 20-year tenure at GE was buying back, well, you know, it turned out he was buying it back. And by then, I was about to go to Wall Street and studying this stuff very carefully. And the fact that GE was buying RCA was front page news in the New York Times at that time. And it was the largest M&E deal in history at that time at about $6.4 billion. And everybody sort of hailed Jack as a hero, which of course was a great deal and smart and clever. They got NBC. But Jack was.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“Partners which had invested in GE at that point was a big fan of Larry Cult. They basically engineered a coup that got rid of John Flannery after 15 months and brought on Larry Culp, who in fact dismantled the whole company, alone in the central office. So what I found repeatedly in the researching and writing of this book was that a lot of themes that were there at the beginning, we talked about what happened in 1892 and 1893 got repeated later on in its history. One thing I didn't know either was that after World War I, Woodrow Wilson basically insisted that GE create what became RCA, Radio Corporation of America inside GE to hold GE's patents in the radio business and its technology that it had discovered in the radio industry so that”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“And then they went back to command and control again. And ironically, fast forwarding way far till to now, my friend John Flannery, who became the CEO, brought Larry Culp onto the GE board, who was the former CEO of Danaher, which is, I'm sure, a company you know that is famously like Brookshire Hathaway, sort of an agglomerator, but without having a very small central authority. Which was spending billions a year sort of some people thought wastefully. And so he brought Larry Calbon to the board to try to get from Larry his wisdom about his experience at Danahert. Unfortunately, what happened was that with the help of Nelson Pelts, his hedge fund Tryon.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT
“And that backfired big time during this electric conspiracy scandal where basically the manufacturers of this electric equipment basically started colluding on the prices that they would charge customers and they had this crazy, I mean, when I came across this, I couldn't believe it either. I mean, this elaborate way of signaling.”
2023-02-24 · We Study Billionaires · TIP527: The Epic Collapse of GE w/ William Cohan · IDENTIFIED FROM THE TRANSCRIPT