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William D. Cohan

lines on the record: 152
first: 2023-02-03
most recent: 2023-02-03
sittings or episodes: 1
sources: podcast

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“Velocity or fur thrust at a high altitude. And obviously GE perfected that on top of Pog Speak, and that made a huge difference for the speed and viability of these fighter jets.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Losing altitude, they would get up to a certain altitude. They would lose power. They would lose power, and so they needed to test a new jet engine to see whether it would maintain its...”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the highest point that you can get to by truck because there's a road up to the top of Pike's Peak and then they test the engine because they need to test it altitude.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I think GE perfected the jet engine by going up to Pikes Peak. I'm sure you remember. Yeah, it's an amazing story.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Is getting the band back together. But of course, nobody has that kind of a memory. And so everybody was like front page of the New York Times was Jack Welch buying back RCA in the biggest M&A deal of all time. And now he's got NBC. But Jack was just buying back what GE had already owned. And I didn't know that, by the way, and I had worked there. And that was one of the major, that was a big revelation to me. I was fascinated by that.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so that was like in 1917, 1918, 1919, 1920. And then in 1932, for reasons that actually kind of, I still don't quite understand. The Justice Department decided that GE owning RCA was antitrust violation, forced GE to divest RCA. That's when RCA became a public company run by David Sarnoff. And then, you know, in 1986, our hero Jack Welch buys back our CA for $6.4 billion. At that point, the largest M&A deal in history. And everybody, like Harold's Jack Welch is like this hero for doing this incredible deal, which by then RCA also owned NBC. That's how GE got NBC. And in fact, Jack was just buying back something that GE had started.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Too valuable. And essentially forced GE to create what became RCA, the Radio Corporation of America, inside GE and forced GE to buy American Marconi and create what became RCA inside GE so that the British wouldn't get access to this technology and dominate the radio waves.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“They had an American subsidiary called American Marconi, which was a public company. And basically the government, Woodrow Wilson's administration, blocked the sale of that.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Of that, we really know about, you know, we know, no, we know, you know, there were nuclear waste dumps, et cetera. Probably at one point that GE was involved with. What I found to be the most interesting thing was sort of in World War I, GE created the radio technology. That we may be even using today. Right now, that allowed people to communicate with one another. And it was a real technological breakthrough and helped the Allies win the war. And so GE created this technology and after the war wanted to sell it to Marconi, which was the big British”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, GE was for a long time a very big defense contractor, jet engines for, you know, Fighter jets and probably had a role in making nuclear bombs and triggers and things like that.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Are you guys colluding? And, you know, I'm going to go around and cut a deal. So it was sort of. Amateur hour, if you will. It really was kind of amateur hour, which doesn't make it any less illegal or immoral or unethical. But what you can probably get away with unbeknownst to people nowadays with, and again, I'm not saying that it's happening, but if it were to happen, it's probably much more insidious and hard to track down.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Or maybe if there is collusion today, let's just make it hypothetical, it's sort of more insidious because you're not exactly sure how, you know, it might affect the pricing of software products or it might affect whether there's cookies that are taken from our data and how our data is used. Back then it was, okay, we need to build a power plant in Florida. You guys make your bids, Westinghouse, you make your bid, GEU make your bid. And oh, these bids seem awfully similar. And, you know, oh, I'm identical. Identical, in fact.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a test case that shows you the importance of competition. And collusion does not really work out for consumers. So, you know, there's a reason we have antitrust. There's a reason that's still being litigated even today. We see antitrust litigation now ramping up again. So competition is important and collusion really is not great and is illegal.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“So honorable Steve. And then they would realize, you know, this probably isn't great what we're doing here. Let's wind it down. Then they would be told to wind it back up again. It was incredibly unethical, immoral, illegal. People went to jail, you know, no doubt after about 10 years it was Flushed.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“You're referring to a major league electrical conspiracy, as it was called. I mean, where Westinghouse and other... Other manufacturers of electrical equipment basically conspired together to set the prices”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, when it went public, but we're talking about relatively small numbers, but at the time, I'm sure that was more money than most everybody else. He was fine, don't you worry. Don't worry about that. JP Morgan and Charles Coffin and others made a lot more money.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“He was a very good businessman, and he ran it much more profitably than Edison's company. So basically, JP Morgan and the Boston Venture Capitalist backing Thompson Houston Company backing Charles Coffin's business wanted to merge these two businesses. And the merger took place in 1892 over the serious objection of a guy named Thomas Edison. He wanted nothing to do with it. He became a minor shareholder, eventually sold his shares, and started working on limestone mining in New Jersey.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“And then it was run by a different CEO who was also a venture capitalist friend of JP Morgan's. And there was another company called the Thompson Houston Company, which was owned by a guy named Charles Coffin up in Massachusetts. And he was from Maine, but his uncle owned a shoe manufacturing business in Lynn, Massachusetts. He went to work for his uncle and decided, like many entrepreneurial-minded people, that the shoe business wasn't all that exciting. But what was exciting was the electric power business and the generation of electric power. So he ended up buying the Thompson Houston Company, which was started by two high school teachers in Philadelphia, moved it up to eventually up to Lynn, Massachusetts, and started running it.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“And seller of companies over the years than GE. So M&A was in GE's DNA. It was like an investment banker's dream, GE. And so Edison had a company called Edison General Electric, but by 1892 it had about 10 million of revenue. It wasn't doing that well. He was just basically a shareholder. And the other big shareholder was J.P. Morgan the man.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“No. So Thomas Edison was completely against the merger of what became GE. So right off the bat, I'm thinking, why do they keep talking about Thomas Edison? Like, I get it from the technology point of view and the entrepreneurial point of view, but the actual merger. So right off the bat, we're talking about M&A, which, of course, intrigued me. Your wheelhouse. Right. So, you know, and there was probably no bigger...”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“How long did It happened quickly. Obviously, it was a major revolution. But, I mean, people had to get comfortable with it, and the grid had to be built out, and the power had to be able to be manufactured. So as the demand crept up and continued, then the supply rose to meet that demand.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, that was General Electric doing that. And that was a major league event in New York City's history, you know, electrifying a square mile of downtown Manhattan. And it was like a big social event. And, you know, page six covered it, Bloomberg covered it. Everybody covered it.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Seems like a simple business. Other than that, it seems like a simple thing. And in the early days, there were fires and people's businesses burned down. So you can imagine that wasn't exactly the greatest recommendation for this product. But over time, you know, the miracle occurred. And part of the reason the miracle occurred is because there were electric subway cars and electric trams above ground. And, you know, I don't know if You probably didn't watch this, but the Gilded Age show. Okay, so, I mean, there's an episode, I think the second or third episode in there, where they actually have a big social event in downtown Manhattan in a square mile in downtown Manhattan around City Hall, where they were electrifying that square mile of downtown Manhattan. And that was GE doing that.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Basically, what became General Electric, which was a merger of two companies, you know, sort of Was a pioneer in bringing electric power, the generation of electric power, and then creating the electric power grid. Remember, you can create electricity, but if there's no way to deliver it to businesses, and then by the way.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the light bulb is real. He did develop the light bulb, create the light bulb. But the business started as electricity power generation.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“I feel like that's, you know, I write the books that I would like to read so they have to be sort of part oral history. Part real history, part investigative reporting, part documentary deep dive and evidence. And I like to get at the DNA of these firms or these companies, right? And the DNA of GE goes back to the late 19th century. So I had to figure out, and I didn't know what it was. So I had to figure that out because, you know, the myth is that this GE was started, founded by Thomas Edison. Well, within a minute or two of researching, I discovered that actually that's not true. But they play that up ad nauseum, and I don't blame them. I mean, how can you not play up Thomas Edison?”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“And they did. And it was a true bellwether. Remember that phrase? A bellwether? They don't really use that anymore. But it was a bellwether of the market.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Quite impressive. Yes. Don't forget at that time, GE was the most valuable company, it was the most respected company, and Jack was the manager of the century. So it'd be like Apple, Google, Microsoft all rolled up into one. And, you know, that was GE. It was original member of the Dow Joe Industrial Average. It was a AAA credit-rated company. It had been paying dividends for 50, 60, 70 years.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, then you have a hint of what he was like. I mean, I spent hours and hours and hours with him before he died. And he even is an 80-year-old man. He was incredibly charming and magnetic and had a larger than life personality. So, you know, when he would get on television with that cranky sort of New England-y accent that I managed to get rid of, and he didn't, even though we grew up near each other, he was magnetic. So, you know, and captivating. So yes, he had the media eating out of the palm of his hands. He had the research community eating out of the palm of his hands. He had shareholders eating out of the palm of his hands. And when you have that kind of performance as a CEO over that longer period of time, don't forget, he was around for 20 years. He became sort of an imperial CEO.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, we could debate that probably endlessly. And there are people who love to debate this. I mean, having worked at GE Capital, I'm actually sympathetic. If you've got $650 billion of assets floating around, including loans, actual buildings because you're in the real estate business. Warrants in companies, equity stakes in companies. And if you have those assets and you can monetize them at some point during a quarter to achieve what you told Wall Street research journalists you were going to achieve, if you don't do that, then I don't know you're committing some sort of financial malpractice, it seems to me. And if you do do it, then people accuse you of financial malpractice.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, except that Bernie Madoff was a Ponzi scheme and totally fictional and never made a trade for his customers. So Jack was actually running a very large.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“And he figured that out, okay? And he played that game. And he also, it was a fact that for the longest time, the research analyst that covered GE were industrial side analysts, didn't understand what was going on at GE capital. So he could kind of wow them every quarter with the performance of the company. And he, you know, 80 straight quarters or something like that, either met or exceeded the analyst estimates.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't hurt yourself. So I would agree with a lot of what you said, not all of it. So Jack had Wall Street research analysts eating out of the palm of his hand.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's a nice compounded rate of return over those basically 20 years. I mean, not unlike Tesla or even Apple. I mean, really, I mean, if you think about when Tim Cook took over Apple, it was worth $300 billion. And at one point, it was worth $2.5 trillion. So that's an equally Jack Welchian-like or even more.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Stock price and shareholder value. When he took over GE, it had a market value of $12 billion. And by the time he left, like a year before he left, it was the most valuable company in the world. $650 billion.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think what Jack, you know, Jack wouldn't know Chicago philosophy from a hole in the wall. But what Jack really understood was”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Of course, it was giant. It was like the third or fourth largest banking institution in the country, and it was completely unregulated, Barry, completely unregulated. It was not a bank because”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“During Jack's 20 year reign atop GE Capital became an increasingly large and important contributor to the bottom line and to the point of providing 50% of the profits. So that's giant.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Making jet engines, making power plants, it was just easier. It was easier to do that arbitrage. And if you had the people in place who could understood the risks and managing the risks.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Fairness, you know, once Jack took over GE Capital in the 70s, and once he decided that, as he told me, it was easier to make money from money than from making”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, in Lazard, you were drinking from the fire hose because there were 72 partners and 72 non-partners in the investment banking group. So very small. So that was not a pyramid structure. That was a rectangular structure. So there were a lot of people at the top of the funnel pushing down on the people at the bottom of the funnel. And so you're just constantly busy working on the biggest and best deals of all time. That's what I did. And Merrill was, of course, much more corporate. It was public. And the ultimate corporate was Chase, JB Morgan, J.B. Morgan Chase. So they were all very different. But you'll note of those three, Lazard, Merrill, and JB Morgan Chase, the only one I've written a book about is Lazard because it was so unique and, you know, really the people there were quite extraordinary and fun to write about.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Of course, having access to capital can be a big problem. And they used to say that Goldman Sachs, which was one of the reasons they stayed private until 1999, is because John Whitehead used to say that, you know, and I know this from writing my book about Goldman, John Whitehead used to say that not having capital forced them to make tougher choices. And other banks... Which had more access to capital, you know, were often foolish with that money.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“They didn't have any. They had basically zero capital markets business. They had no balance sheet. So they weren't ever going to be having securities on their balance sheet that were at risk and losing value.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“No, they went public in 2006. That's right. And that was my first book covered them being a private partnership to going public. When Bruce Wasserson came in and basically stole the company from Michelle David Vey, which is a story I tell in detail in the book, they went public in May of 2006, and they've been public now for.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Were rock stars So, I was a Gapital, and we were getting business because we had access to all this capital. I became enamored of this idea of getting business through your ideas. And that's what happened. That was it. Lizard. Lazard had no capital. But it got in the middle of deals, it became interstitial men because of its reputation, its brain power, and that really appealed to me. And plus it was French and a private partnership and all these great men were wandering around like Felix Rowet and Michelle David. It's a comba. And so I wanted to be part of that. I was the only associate they hired in 1989.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“didn't even send me one of those. They just ignored me. And then two years later, I tried again, and I wanted to go, you know, GE Capital. To understand investment banking was so hot then.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, totally, totally. I mean, I'd always been fascinated by Lazard. Read Carrie Reich's book, The Financier about Andre Maeir, which was a fabulous book. And Carrie Reich was a great writer, but he died way too young. And I've been a Francophile my whole life. I read that book. I wanted to work at Lizard. When I was at business school, I got an interview at Lizard with two partners who probably are still there. And they didn't even send me a ding letter, Barry. Do you know what a ding letter?”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“GE had a benefit over other companies in that regard because they had a AAA credit rating. So they were able to borrow very cheap and then lend out expensively and they were able to arbitrage that credit rating, which of course Jack Welch did in spades. And by the time I got there, you know, Jack had been CEO for six years and he was well into turning GE Capital into a financial powerhouse. So by the time I got there, it was well beyond just financing customer acquisitions of appliances. I mean, we were actually, you know, I probably shouldn't have been doing it because I had been a journalist covering public schools. Nothing about leveraged buyouts, but I was financing leveraged buyouts to GEP. And that was one of 18 or 20 business lines that the business was in. And just making huge profits, arbitraging that credit rating.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Time I was there, it had started in the Depression, financing customers. Of GE's appliances, right? Because credit was hard to come by during those years.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and I actually started out of business school and gone back to Columbia. So I graduated from business school in 1987 and went to GE Capital for two years financing leverage buyouts. And I also spent a year there working for the chief credit officer. learning, all the different business lines at GE Capital. And then I went to Lazard and.”
2023-02-03 · Masters in Business · William D. Cohan on the Rise and Fall of GE · IDENTIFIED FROM THE TRANSCRIPT · source