Show

Former General Electric CEO stirs up controversy

October 11th, 2012

Jack Welch, former CEO of General Electric Co., terminated his writing position with Thomson Reuters Corp and Fortune magazine after an inappropriate Twitter post concerning the Obama administration. His Twitter post read, “President Barack Obama’s administration manipulated employment data for political gain.”

As the CEO of General Electric, Welch earned the nickname “Neutron Jack,” after cutting more than 100,000 jobs in the 1980s in an effort to help increase profits. His replacement, Jeffrey Immelt, was chosen by the White House in January of 2011 to lead a panel of CEOs, labor leaders and academics responsible for recommending ways to improve U.S. employment.

Welch resigned his position by sending an email to Reuters editor-in-chief Steve Adler and Fortune Managing Editor Andy Serwer, saying he would get better “traction” elsewhere. Welch said he and his wife would no longer contribute to Fortune or Reuters, which had also reported on the Welch post. He said that he would rather have an article in The Wall Street Journal instead.

In a phone interview Tuesday, Serwer said that he tried to get comment from Welch, who had written seven columns for Fortune with his wife, Suzy. Serwer said he never heard back from Welch, but also mentioned he heard from readers complaining that a contributor to Fortune would make a statement like that on Twitter.

Welch has contributed $5,000 to Romney’s campaign, the maximum amount anyone can donate to a presidential candidate, according to the Center for Responsive Politics, a Washington-based research group that tracks political giving.

Welch described Romney on CNBC as “the most qualified leader” to seek the office of President of the United States. After the U.S. Labor Department reported that the unemployment rate fell to 7.8 percent last month, the lowest since Obama took office in January 2009 Welch posted, “Unbelievable jobs numbers … these Chicago guys will do anything … can’t debate so change numbers …” Because of his impressive business background, Welch knew his comment would attract immediate attention.

Peter Thies, a senior partner at Los Angeles-based executive search firm Korn/Ferry International, told Bloomberg “His words ring louder than many others and that’s just the fact of life for a CEO, especially a well-known corporate icon type CEO that he has been.”

During an interview with Chris Matthews on MSNBC, Welch told Matthews, “I have no evidence to prove [the BLS numbers were manipulated]. I just raised the question.” But he added, “You don’t think it’s coincidental that we’ve had the biggest job surge since 1983?”

“These numbers defy logic,” he said. However, the Obama administration promptly defended the U.S. Bureau of Labor Statistics. Alan Krueger, chairman of the White House Council of Economic Advisers, told Bloomberg Television that Welch’s remark was “irresponsible.”

In a column headlined “I Was Right About That Strange Jobs Report,” he wrote, “I’m not sorry for the heated debate that ensued. I’m not the first person to question government numbers, and hopefully I won’t be the last.”