Tags: Former | GE | Chaiman | Blasts

Former GE Chaiman Blasts Successor

By Newsmax Staff   |   Wednesday, 16 Apr 2008 05:07 PM

Using surprisingly blunt language, former General Electric Chairman-CEO Jack Welch unloaded on his hand-picked successor Jeff Immelt on Wednesday.

Kicking off a "special edition" of CNBC's "Squawk Box," GE's legendary chief told a surprised audience: "GE lied and Jeff got his ass kicked . . . Jeff missed his targets and had a credibility crash . . . I hope that there some red asses over there and that it doesn't happen again."

Welch added that GE's "fundamentals" are "still solid," but hinted that some high level heads are likely to roll. "You just can't misinform the chairman like that," Welch explained.

The former chief told his CNBC hosts that he "hasn't been back to office since he left GE seven years ago," but he added that "I still know the fundamentals of this company; that hasn't changed."

The problems provoking Welch's outburst related to GE's first quarter estimates, which were off by a wide margin. Moreover, company heads gave Wall Street no advance warning. In more than 20 years at GE's helm, Welch never missed his targets by such a wide margin and rarely surprised analysts, especially in a negative context.

The obviously upset former CEO went on to warn his successor: "I'd be shocked beyond belief, and I'd get a gun and shoot him if he doesn't make what he promised now."

Last week, GE, considered a bellwether indicator of the broader U.S. economy, told Wall Street that its profits tumbled 6 percent in the first quarter from last year. Just a month earlier, Immelt advised investors GE would meet its first quarter goals.

Just days before the bad news, GE Vice Chairman Robert C Wright had lunch with several members of the New York City media and was silent about the impending bad news. GE's fall is tied to GE Capital's exposure to the mortgage and credit market crisis as well as to a soft ad demand at NBC and its cable operations.

Welch pointed out, however, that GE Capital's financial exposure is far "more limited" than its competitors to the current credit and loan crisis. The stock edged up $.25 to $32.24 in after hours trading.

Representatives from GE headquarters in Fairfield, Conn., had no comment on Welch's quotes.

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