Did Jack Welch break Capitalism?

[SleeplessinSoCal]

Listening to Fresh Air interview NY Times' David Gelles discussing this.

Short-term profits and long-term consequences — did Jack Welch break capitalism?
June 1, 2022


https://www.npr.org/2022/06/01/1101505691/short-term-profits-and-long-term-consequences-did-jack-welch-break-capitalism

[4Q2u2]

1. I saved this from 2000. He was despicable, son of a Union Conductor, screws America over.

Lynn-Based GE Plant Considers Migration
By Saurabh Asthana and Julia K. Steinberger
Boston and the surrounding metropolitan area were once some of the premier manufacturing areas in the country. In fact, the main General Electric plant in Lynn, Ma., has been there since 1892. But profit threatens to change the economic landscape of the Boston area, as companies like GE export their business abroad.

GE’s CEO Jack Welch has begun a new push to move GE’s work-force to the so-called “low-cost poles,” those areas of the world where labor is cheapest -- East Asia, Eastern Europe, and Mexico and South America. According to Business Week’s estimate, GE has moved 30,000 jobs to Mexico in the past two decades.

GE maintains that simple market pressures force it to export its labor overseas. According to GE’s general manager in Lynn, Timothy J. Noonan, it’s very straightforward: “GE is in the business to make money for its stockholders.”

“Right now we’re in a good position. We have good market share. We’re number one, and we want to stay that way,” Noonan said. GE must remain competitive in order to keep ahead of market rivals.

GE urges suppliers to move too

GE is not only moving its own labor; it is encouraging its suppliers to move with it. Last April, GE held a “supplier migration conference” in Monterrey, Mexico, where it is urging its subcontractors to relocate.

Jeff Crosby, president of IUE local 201, the union which represents the majority of GE’s workers in Lynn as well as the workers at GE subcontractor Ametek Aerospace in Wilmington, about the details of the conference. Crosby received the details in documents leaked to him by Ametek management.

GE claims it is not urging its subcontractors to move. “It’s simply not the case,” Noonan told the Lynn Daily Evening Item. “GE is not moving to Mexico, and we are not forcing subcontractors to move.”

But the documents Crosby received tell quite a different story. “Migrate or be out of business not a matter of if, just when,” and “We sincerely want you to participate, but if you don’t, we will move on without you,” GE reportedly said in the documents.

Ametek Aerospace produces aircraft engines, which according to Crosby pulled in $1.7 billion of last year’s $10 billion -- it was GE’s most profitable division. This is the first time GE Aircraft Engines has attempted moving production overseas, and no one is sure the move will work.

But few are willing to speak up. Suppliers in Evendale, Ohio, who received similar urging to move in December of 1999, told the Cincinnati Business Courier, “They are suggesting the how along with the what. It takes away the freedom to run your own business. No one else is doing a full frontal assault like this.”

Crosby says he has already received word of 84 jobs being cut at Ametek. And Ametek managers are working out the details of a move south. Crosby is uncertain how the problem can be settled in the long run. “As long as we’re making eighteen dollars an hour, and some worker in Mexico makes six dollars a day, I don’t think it’s going to change.”

By most post-NAFTA estimates, Crosby says, Mexican wages have been declining, even as foreign direct investment increases, and Mexican labor unions are poorly organized at best, making them all the more appealing to GE.

“They’re profitable beyond the kings and the pharaohs. No one has ever walked where they walk,” Crosby said. “These are decisions made by people. Behind the unseen hand, there are corporate leaders making decisions, and they’ve got to be held responsible for what they do.”

GE more prosperous than ever

With soaring profits and good prospects on every front, GE represents the quintessential American corporate success story. It dominates entire industries and has factories and suppliers all over the United States and the world. GE made 10.72 billion dollars in profits last year. “We think it’s the first time a company has been above $10 billion for a year,” said Gary Sheffer, a GE spokesman.

GE’s success is largely credited to Welch, who has, according to GE figures, raised profits from $1.6 billion in 1981 to $10.7 billion last year. Welch made $97 million in 1998, and is perhaps one of the most effective cost-cutters ever, eliminating 100,000 jobs in the 1980s.

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[pansypoo53219]

2. it starts w/ reagan firing the air-traffic controllers + the war on unions. hell, welfare queens.

Last edited Fri Jun 3, 2022, 02:49 AM - Edit history (1)

[SleeplessinSoCal]

3. i recall the movie Norma Rae from 1979.

Yeah Reagan & Welch were the one two punch (plus trickle down economics) that killed Capitalism. The timing of that movie and Welch becoming a role model as "Neutron Jack" firing and outsourcing in 1981, caused me to think that only decent people were rooting for Norma Rae and the working class.

[appalachiablue]

4. "Jack Welch Was a Bitter Foe of American Workers" Unionbusting

- "Jack Welch Was a Bitter Foe of American Workers," History News Network, By Erik Loomis, 2018. -Ed.

- As he infamously said, “Ideally, you'd have every plant you own on a barge.” -

With the United States firmly in its second Gilded Age, the creators of this period of epic income inequality, growing racial violence, and undermining of our democratic institutions are already beginning to pass from the scene. One of these is Jack Welch, who died last week at the age of 84. Most of the national obituaries of Welch focused on his outsized personality and aggressive management style. Those things did help change the trajectory of American capitalism, but the obituaries left out or downplayed Welch’s greatest impact in shaping the unequal and unfair America of today: unionbusting.

For many years, General Electric was one of the largest corporations that had a stable relationship with its unions. Under Gerald Swope’s leadership, GE had come to terms with labor unions in a system of collective bargaining that created a profitable stability. While Swope’s successors at GE were not as favorable to unionism as he, the company was a stalwart of union power for decades. When Jack Welch took over GE, he brought a very different perspective to the question of unions. He wanted them out. He was no outsider. He has worked for GE for twenty years before becoming CEO. But rather than learn how unions can sustain a workplace where workers feel valued, where they have safe and healthy jobs, and where they make wages that allow them to live with dignity, the lesson Welch took was that unions got in the way of maximizing profits.

That Welch came to power the same year that Reagan ushered in the new era of unionbusting by firing the air traffic controllers in 1981 was coincidence, but a fitting one. Welch’s rise coincided with American corporations began moving millions of industrial jobs overseas, helping to undermine organized labor and reorient the nation to concentrate wealth in the top 1 percent of income holders, which very much included Welch and other GE executives. He made GE one of the leaders in corporate mobility. As he infamously said, “Ideally, you'd have every plant you own on a barge.” He closed union plants in the north and reopened them in the non-union south or overseas. The era of unfettered capital mobility went far to undermine the postwar stability of the working class.

American steel companies laid off 40% of their workers between 1979 and 1984 while United Auto Workers lost half their members between 1970 and 1985.

As late as the 1990s, there were tens of thousands of jobs in textile plants in the South. But these were the last remnants of a once robust manufacturing base. Beginning in 1995, Fruit of the Loom closed a series of Alabama mills and moved production to Mexico, Central America, and the Caribbean, a process that continued through 2009, when 2 last factories closed, laying off 270 workers. Welch was not the only person responsible for the outsourcing of union jobs, but no one celebrated it with more obnoxious fervor. Welch believed that unions destroyed the American economy, stating in a 2009 forum that there were no competitive unionized industries in the U.S. Between 1980 and 1985, GE’s workforce plummeted from 411,000 to 299,000 workers. The overall percentage of unionized workers in the company fell from 70% when Welch took over to 35% by 1988... https://historynewsnetwork.org/article/174491

[SleeplessinSoCal]

5. And the recourse for this betrayal of working Americans?

Drive us apart with racism, price gouging, arm us to the teeth with weapons of war, turn the country on itself, allow a Russian tyrant to pay greedy politicians like McConnell for our demise. More likely than not, he's set til Climate Changes our land into a literal hell on earth.

He was one man that became a role model to the greedy. And we can't fix what he did? That is pathetic.

[appalachiablue]

6. The brave workers who are pushing for unions now

deserve tons of credit, but it's a very steep hill to climb. I still wish them all the best.

Those in charge and profiting will fight improvements as always regardless of the mass pain caused and the cost to society and democracy. How many more billionaires will rise from the endless greedhead ethos and road to neofeudalism.

The continuation of the racism, war zone violence, division and destruction esp. from climate change is unimaginable and means certain demise unless we pull out of this somehow.

If not, it's dystopian hellscape as you say. I fear for the younger generations who will be most affected. They deserve so much better from life.