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David Gelles · The Bob Lefsetz Podcast

• 0:08
  Speaker 1: Welcome, Welcome, Welcome back to the Bob Left Steps podcast.
• 0:13
  Speaker 1: My guest today is David Gillis, author of the new
• 0:16
  Speaker 1: book The Man Who Broke Capitalism, all about Jack Welch
• 0:20
  Speaker 1: and how he ruined the economy and more so. David,
• 0:25
  Speaker 1: good to have you on the podcast. Why did you
• 0:28
  Speaker 1: decide to write the book. I've been a business reporter
• 0:31
  Speaker 1: for more than ten years now, and I'm always looking
• 0:35
  Speaker 1: for those big stories that can sort of help explain
• 0:38
  Speaker 1: and synthesize how we got here in the world we
• 0:42
  Speaker 1: live in. And I'll tell you the details of how
• 0:45
  Speaker 1: I arrived on Jack as a subject. But when I
• 0:48
  Speaker 1: arrived there, when I really realized, when it sort of
• 0:51
  Speaker 1: clicked for me about two years ago, that this was
• 0:53
  Speaker 1: an individual. This was a story that was one of
• 0:57
  Speaker 1: those meta narratives that Christopher iised some of these big
• 1:02
  Speaker 1: transformative forces at work in the economy. It was sort
• 1:06
  Speaker 1: of a lay up for me to go after it
• 1:07
  Speaker 1: as a real target for the book. Okay, how come
• 1:13
  Speaker 1: the rest of the business press missed this for decades?
• 1:17
  Speaker 1: Oh man, that's one of the big questions, and I
• 1:20
  Speaker 1: tried to address some of that in the book. I
• 1:22
  Speaker 1: think it's important to remember that at first, they didn't
• 1:25
  Speaker 1: necessarily miss it. In those first couple of years after
• 1:29
  Speaker 1: Welch took over in the early nineteen eighties we're now
• 1:32
  Speaker 1: talking about, he was dubbed neutron Jack. People saw the
• 1:37
  Speaker 1: mass layoffs, people saw the factory closures, and they realized
• 1:41
  Speaker 1: that this was a man who was unleashing a destabilizing
• 1:47
  Speaker 1: force on the American economy, and they called him out
• 1:50
  Speaker 1: for it rightly, and he got very unflattering press on
• 1:53
  Speaker 1: sixty Minutes Newsweek dubbed him neutron Jack, and it was
• 1:58
  Speaker 1: a pretty rough news cycle for him, if you will.
• 2:01
  Speaker 1: But then here's what happened, and we got to acknowledge
• 2:04
  Speaker 1: this because it's part of the complex and difficult conversation.
• 2:09
  Speaker 1: All of the stuff he did started to work, and
• 2:11
  Speaker 1: it all worked in delivering g E record short term profits,
• 2:19
  Speaker 1: record short relatively short term and we should have a
• 2:23
  Speaker 1: discussion about how we measure time horizons here. But for
• 2:27
  Speaker 1: most of his twenty years as CEO of g E,
• 2:31
  Speaker 1: the stock kept going up, and as long as the
• 2:33
  Speaker 1: stock kept going up, sort of irregardless of the human
• 2:37
  Speaker 1: cost on the ground, people were cheering along because that
• 2:41
  Speaker 1: was the world that we all had decided, more or less,
• 2:44
  Speaker 1: we wanted to live in one in which we were
• 2:46
  Speaker 1: going to measure success and the health of the American
• 2:50
  Speaker 1: economy by the market capitalization of America's biggest companies. And
• 2:56
  Speaker 1: what he did was find a formula towards keep g
• 3:00
  Speaker 1: IS stock moving up. It's sort of inexorably for twenty years.
• 3:04
  Speaker 1: And so during that time it became very hard for
• 3:08
  Speaker 1: the business press to sort of see through and look
• 3:11
  Speaker 1: past all that and really evaluate the consequences of what
• 3:15
  Speaker 1: was going on. I don't want to say that I'm brilliant,
• 3:18
  Speaker 1: but certainly by time we hit the end of the nineties,
• 3:21
  Speaker 1: it was clear to me that he was cooking the books.
• 3:24
  Speaker 1: I mean cooking the books. Would say there's illegality, I
• 3:28
  Speaker 1: want to go that far, that he was manipulating the books,
• 3:32
  Speaker 1: but that was not in the business press. There was
• 3:35
  Speaker 1: very little of it. And I'm reminded here of the
• 3:39
  Speaker 1: financial crisis in two thousand and eight, when everyone said, like, wait,
• 3:43
  Speaker 1: these sub prime mortgages were a bad thing after all,
• 3:45
  Speaker 1: Like where was the scrutiny right that that, like hyper
• 3:49
  Speaker 1: uh financialization and like collaterized that obligations might be a
• 3:53
  Speaker 1: problem uh, that there was very little recognition of uh
• 3:59
  Speaker 1: of of some of those issues by the business press
• 4:01
  Speaker 1: in the immediate months preceding the absolute implosion. And similarly
• 4:07
  Speaker 1: that you're absolutely right to say that there was inadequate
• 4:10
  Speaker 1: scrutiny of ges earnings. I think in the ES in particular.
• 4:15
  Speaker 1: Now things were different. Then, the whole culture of Wall
• 4:20
  Speaker 1: Street and corporate America was focused on much less transparency.
• 4:25
  Speaker 1: This was before the Sarbanes Oxley Act, before the big
• 4:28
  Speaker 1: scandals of the early two thousands, when Enron, World, Calm
• 4:32
  Speaker 1: and Tycho collapse, leading to a much greater degree of
• 4:39
  Speaker 1: oversight by the federal government. That said, Uh, you're entirely
• 4:44
  Speaker 1: correct to say that for something like almost eighty quarters
• 4:49
  Speaker 1: in a row, g e meet or beat analysts, expectations
• 4:56
  Speaker 1: and anyone. You don't have to be a genius to
• 4:58
  Speaker 1: understand that something is going on for that to happen.
• 5:02
  Speaker 1: Something fishy is going on for a company to meet
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  Speaker 1: or beat for eighty quarters in a row, because that
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  Speaker 1: just doesn't happen, right that that's like against the laws
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  Speaker 1: of nature. So you talk about the change in regulations,
• 5:16
  Speaker 1: this is your beat, and we know we had regulations.
• 5:20
  Speaker 1: And then Trump undercut regulations. So to what degree, uh,
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  Speaker 1: do these corporations have to report now? To what degree
• 5:28
  Speaker 1: it is different from the nineties I'm talking about presently? Yeah,
• 5:34
  Speaker 1: that I would say, on balance, there is more granular
• 5:41
  Speaker 1: level of reporting happening by major corporations today. There is
• 5:44
  Speaker 1: certainly more accountability when it comes to the boards, and
• 5:48
  Speaker 1: that was a big part of those early regulations. Um.
• 5:53
  Speaker 1: If you know, if boards are signing off on truly
• 5:55
  Speaker 1: cooked books, it doesn't get easy for for them to
• 5:59
  Speaker 1: escape accountability. It's also the case that there are very
• 6:04
  Speaker 1: few companies that are employing the same kinds of financial
• 6:08
  Speaker 1: shenanigans that g E was up to. And there are
• 6:12
  Speaker 1: very few companies that have anything close to UH an
• 6:17
  Speaker 1: entity as complex as ge Capital was in the ninet
• 6:21
  Speaker 1: nineties and early two thousand's um not to mention something
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  Speaker 1: like that paired alongside a massive, sprawling industrial business. So
• 6:30
  Speaker 1: the comps get a little tricky right now. And it's
• 6:34
  Speaker 1: also the case that when companies do engage in some
• 6:38
  Speaker 1: of these shenanigans, the SEC has gotten better I think
• 6:41
  Speaker 1: at calling them out and dinging them, you know, they
• 6:44
  Speaker 1: and they ultimately caught up with in two thousand nine,
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  Speaker 1: the then CEO, Jeff M. L. Jack, Welch's chosen successor,
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  Speaker 1: settled these sweeping accounting fraud charges with the SEC that
• 6:58
  Speaker 1: mostly covered the period from roughly I think two thousand
• 7:01
  Speaker 1: three to two thousand five or so, just after Whils retired.
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  Speaker 1: But in the settlement and in the news release and
• 7:08
  Speaker 1: all the remarks that the SEC made at the time
• 7:11
  Speaker 1: of that settlement, they pointed to what sure looked like
• 7:15
  Speaker 1: decades of impropriety. And we won't know right because we
• 7:18
  Speaker 1: we there isn't the forensic accounting from the eighties and nineties,
• 7:22
  Speaker 1: but they made the point that it sure looked like
• 7:25
  Speaker 1: GE had been up to this sort of stuff, which
• 7:28
  Speaker 1: they ultimately, you know, settled with the SEC for for
• 7:31
  Speaker 1: years and years and years. In the newspaper today, there's
• 7:36
  Speaker 1: a story about how the institutions, the professionals really didn't
• 7:40
  Speaker 1: lose money on crypto. It was the retail investor. Anybody
• 7:44
  Speaker 1: who's been exposed to one of these public companies know
• 7:48
  Speaker 1: the knows that the CFO plays a huge role. And
• 7:53
  Speaker 1: I can give specific examples from my own exposure of
• 7:56
  Speaker 1: people who are literally shipping product changing to make the
• 8:00
  Speaker 1: numbers look good. Okay, so that whatever they are, there
• 8:05
  Speaker 1: is some fudge space. I'm not saying you can take
• 8:07
  Speaker 1: a company to lose a hundred million and now makes
• 8:09
  Speaker 1: a hundred million. But the public doesn't seem to understand this.
• 8:16
  Speaker 1: So to what degree have you encountered this in your reporting?
• 8:19
  Speaker 1: Listen on the crypto front, I think what we're seeing
• 8:22
  Speaker 1: is the popping of a speculative bubble, and it's very
• 8:25
  Speaker 1: hard to know when you know, when people stop buying
• 8:28
  Speaker 1: two lips, just how how far the bottom is going
• 8:32
  Speaker 1: to fall out from under people. I think the critical
• 8:36
  Speaker 1: first point you made is one that is a through
• 8:39
  Speaker 1: line of the reporting in this book as well, which
• 8:42
  Speaker 1: is that the people in charge rarely face consequences, and
• 8:46
  Speaker 1: and that the men, and they're almost always men who
• 8:50
  Speaker 1: have the most power in this economy and the most
• 8:53
  Speaker 1: money in this economy are usually going to do just fine.
• 8:56
  Speaker 1: There is very very little accountability for corporate mouthfeasance in
• 9:00
  Speaker 1: this country, and there is a grand tradition in America
• 9:04
  Speaker 1: of true impunity, even for the worst offenders and even
• 9:08
  Speaker 1: for those who unleashed the most damage on society at large.
• 9:13
  Speaker 1: So it doesn't surprise me at all that we're starting
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  Speaker 1: to see the same patterns play out in crypto and
• 9:20
  Speaker 1: and F. T. S Um and my book, frankly is
• 9:26
  Speaker 1: a recitation of like hundreds and hundreds examples of how
• 9:30
  Speaker 1: Jack Welch and his cronies played the same game at
• 9:36
  Speaker 1: major public companies for the better part of four decades.
• 9:41
  Speaker 1: Let's go to the present day. So within the last
• 9:45
  Speaker 1: six months, stock market has gone down, but let's focus
• 9:47
  Speaker 1: on Netflix. Netflix reports essentially a flat quarter, loses seventy
• 9:55
  Speaker 1: of the stock value. Let's be very clear, almost all
• 9:59
  Speaker 1: of that decline is based on scuttle button analysts, this
• 10:04
  Speaker 1: and that, very little to do with the underlying business.
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  Speaker 1: There might be question the underlying business, but you know,
• 10:13
  Speaker 1: a drop of seventy and then of course a lot
• 10:16
  Speaker 1: of other things have dropped simultane you know, later than that, etcetera.
• 10:19
  Speaker 1: So to what degree is the street disconnected from businesses?
• 10:25
  Speaker 1: And as long as they're making money, they don't really
• 10:28
  Speaker 1: care what the hell you're doing? Uh? Well, who who
• 10:32
  Speaker 1: is the day? And that last part of the question,
• 10:34
  Speaker 1: the street or the business? I would say Wall Street
• 10:37
  Speaker 1: meaning investors. I'll just make it a general investment community. Yeah,
• 10:42
  Speaker 1: I mean, there's this is the subject of many you know, dissertations, Bob.
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  Speaker 1: I think when we talk about a story like Netflix, right,
• 10:53
  Speaker 1: like that stock was obviously inflated because it was one
• 10:58
  Speaker 1: of these pandemic stocks. And when the world moved online
• 11:01
  Speaker 1: and everyone started spending twelve hours a day on their computers,
• 11:05
  Speaker 1: um netfolks, shoure looked like a goodbye. And so, to
• 11:09
  Speaker 1: answer one of the parts of that question more directly, like,
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  Speaker 1: there's of course a huge disconnect between the stock market
• 11:15
  Speaker 1: and the fundamentals of any business. Um. You know that
• 11:18
  Speaker 1: the stock is sort of a proxy for people's confidence
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  Speaker 1: in future earnings, Like we know this um in terms
• 11:25
  Speaker 1: of the street and what they believe. I think that's it.
• 11:29
  Speaker 1: That's a harder question for me to answer. I'm not
• 11:31
  Speaker 1: an analyst, and you know, many analysts are gonna pour
• 11:36
  Speaker 1: money into companies that are you know, are are going
• 11:39
  Speaker 1: to invest heavily in companies that aren't making money. We
• 11:42
  Speaker 1: see that all the time with big, unprofitable tech companies.
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  Speaker 1: And it's also the case conversely that there are plenty
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  Speaker 1: of companies that have um you know, very respectable, reliable,
• 11:56
  Speaker 1: maybe even growing, though perhaps not terribly quickly, profits that
• 12:02
  Speaker 1: one could say are are tremendously undervalued. I think to
• 12:06
  Speaker 1: to sort of comment on anyone's stock is is difficult,
• 12:10
  Speaker 1: especially at the moment we're seeing a major market correction,
• 12:13
  Speaker 1: and there's so many other global forces at work from
• 12:15
  Speaker 1: the supply chain at Ukraine. Um So I would just
• 12:19
  Speaker 1: say that in any few months, sort of reading too
• 12:25
  Speaker 1: much into the movement of a particular stock is sort
• 12:29
  Speaker 1: of an exercise and potential folly. But if you look
• 12:31
  Speaker 1: at the long chart of g E, I think you
• 12:34
  Speaker 1: really do see the story that I tell in my
• 12:36
  Speaker 1: book played out quite quite viscerally, which is that for
• 12:40
  Speaker 1: twenty years Jack Welch essentially used this combination of downsize
• 12:44
  Speaker 1: and deal making and financialization to inflate the valuation of
• 12:48
  Speaker 1: GEES stock, and that as soon as those games stopped
• 12:52
  Speaker 1: working for some combination of reasons that we can get into,
• 12:56
  Speaker 1: the stock fell apart and never recovered. And it was
• 12:58
  Speaker 1: just last year, of course, at the curren CEO Larry
• 13:01
  Speaker 1: Colp said that they were going to split the company
• 13:02
  Speaker 1: up forever. Okay, let's go back to the narrative. Paint
• 13:07
  Speaker 1: the picture of what's happening with g E and how
• 13:10
  Speaker 1: Jack gets the gig and what are the financial conditions, compensation,
• 13:16
  Speaker 1: show us what's going on when he comes on as CEO. Yeah.
• 13:20
  Speaker 1: Jack took over g E in n and before that. Uh,
• 13:26
  Speaker 1: it's really hard to overstate what an integral company General
• 13:31
  Speaker 1: Electric was to the American economy. This was the company
• 13:35
  Speaker 1: that was founded by Thomas Edison that you know, introduced
• 13:39
  Speaker 1: or popularized everything from the radio to the dishwasher, to
• 13:44
  Speaker 1: the refrigerator, to the jet engine, to the laser to
• 13:47
  Speaker 1: the damn plastic the guys who landed on the moon
• 13:49
  Speaker 1: were we're in other visors. Um GE was essentially deeply
• 13:54
  Speaker 1: integrated and someone would say synonymous with the American economy
• 13:58
  Speaker 1: for all for much of the twenties entry and that
• 14:02
  Speaker 1: was the company that he inherited in nineteen. Now for
• 14:06
  Speaker 1: those years, for that ten years or so before he
• 14:09
  Speaker 1: took over, the stock had mostly been flat. You know,
• 14:12
  Speaker 1: the economy as a whole was experiencing stag inflation sort
• 14:16
  Speaker 1: of combination of stagnant uh stagnant growth and inflation that
• 14:22
  Speaker 1: was making for a really rough run for investors. And
• 14:26
  Speaker 1: Welch comes to the job with this real single minded
• 14:29
  Speaker 1: focus towards reversing that trend and making g E not
• 14:34
  Speaker 1: only engine of profits, but really, in his mind it
• 14:40
  Speaker 1: had the potential to be the most valuable company in
• 14:42
  Speaker 1: the world, and he set about doing that um But
• 14:47
  Speaker 1: the CEO he took over from could not have been
• 14:50
  Speaker 1: more different the guy who preceded him, Regg Jones. He
• 14:53
  Speaker 1: was this sort of genteel Englishman. He lived quite modestly
• 14:58
  Speaker 1: relative to certainly the way Jack would one day run
• 15:02
  Speaker 1: run the company. As a CEO, he made you know,
• 15:07
  Speaker 1: a respectable sum a million dollars or so, maybe more
• 15:10
  Speaker 1: a couple million dollars by the end of his tenure,
• 15:12
  Speaker 1: but not tens or hundreds of millions of dollars. And
• 15:16
  Speaker 1: so Jack comes in and is about the opposite in
• 15:18
  Speaker 1: every way. He is brash, impulsive, He is argumentative, whereas
• 15:26
  Speaker 1: Regg Jones had been cerebrill and deliberative and from you know, cordial.
• 15:32
  Speaker 1: Welch is completely unafraid to throw tradition out the window.
• 15:39
  Speaker 1: Whereas Jones had been very respectful of gees legacy, and
• 15:45
  Speaker 1: whereas Regg Jones really focused on making ge UH an
• 15:51
  Speaker 1: excellent version of the company it already was when he
• 15:54
  Speaker 1: took over in the early seventies or eight sixties, Welch
• 15:58
  Speaker 1: comes to the job with almost like an a completely
• 16:03
  Speaker 1: um immoral is not the right word. What's the word um?
• 16:06
  Speaker 1: With no real allegiance to gees traditional businesses of lighting
• 16:14
  Speaker 1: and power systems and transportation. You know, he'll make the
• 16:17
  Speaker 1: most of those businesses, but at the end of the day,
• 16:19
  Speaker 1: he's much more interested in things like media and finance
• 16:23
  Speaker 1: and all sorts of finance UM too, and sees those
• 16:30
  Speaker 1: new industries as the real future for General Electric. And
• 16:33
  Speaker 1: he identifies all that all everything I just described is
• 16:37
  Speaker 1: pretty clear within the first year or so that Welch
• 16:39
  Speaker 1: takes over, and then he makes good on it. He
• 16:41
  Speaker 1: spent the next twenty years sort of executing on that plan.
• 16:46
  Speaker 1: Let's go back a chapter. Who is this guy? You
• 16:49
  Speaker 1: read the book and it's reference that he has short
• 16:52
  Speaker 1: man syndrome. The other thing is when you work in
• 16:57
  Speaker 1: a giant corporation, yes you have to deliver, but relationships
• 17:02
  Speaker 1: and getting along but one of the key elements. So
• 17:06
  Speaker 1: let's start out with who is this guy and how
• 17:09
  Speaker 1: does he end up? G Yeah, we'll tell that to
• 17:12
  Speaker 1: Jack Wellips that you need to be nice to your colleagues.
• 17:14
  Speaker 1: I think he would have disagreed with you. At the
• 17:17
  Speaker 1: top it's a different game. He was. He was an
• 17:20
  Speaker 1: argument at of s ob from the get go. All right,
• 17:23
  Speaker 1: So who was this guy? Jack Bats was the only
• 17:25
  Speaker 1: son of a poor family who grew up in the
• 17:28
  Speaker 1: suburbs of Boston. His mom was a homemaker, his father
• 17:33
  Speaker 1: was a unionized rail conductor on the local UH commuter
• 17:39
  Speaker 1: train system. Welch was as you said, short, uh, muscular, feisty, argumentative.
• 17:48
  Speaker 1: He grew up he had a chip on his soldier
• 17:50
  Speaker 1: from an early age. He said, I grew up with
• 17:52
  Speaker 1: my nose pressed up against the glass. He was poor
• 17:55
  Speaker 1: and he knew it, and he did not like it.
• 17:58
  Speaker 1: His parents were Irish, hathlic His mother made him an
• 18:01
  Speaker 1: ultra boy, but also instilled in him a real competitive street.
• 18:04
  Speaker 1: Made him learned how to play poker as a kid
• 18:07
  Speaker 1: by using his own allowance money, so right away at
• 18:10
  Speaker 1: this visceral sense of winning and losing. Um, he was
• 18:13
  Speaker 1: incredibly smart. And I always mentioned that because there's no
• 18:18
  Speaker 1: there's no way that he could have done all the
• 18:19
  Speaker 1: things he did without having an absolutely, absolutely um you know,
• 18:27
  Speaker 1: keen sense not only in strategy and intuition, but he
• 18:31
  Speaker 1: was also just you know, brilliant ability to hold and
• 18:35
  Speaker 1: synthesize great deals of information. He was smarter than a
• 18:37
  Speaker 1: lot of the people he worked with, and he knew it,
• 18:40
  Speaker 1: and even early in his career when he hadn't proved anything, uh,
• 18:45
  Speaker 1: that pisted him off as well. He went to college
• 18:48
  Speaker 1: and then was the youngest person ever to graduate with
• 18:50
  Speaker 1: a PhD from University of Champagne in Illinois. Graduated with
• 18:55
  Speaker 1: a PhD in chemical engineering I believe it was, and
• 18:58
  Speaker 1: his first job was a g e um. First year
• 19:00
  Speaker 1: in he threatens to quit because he gets a one
• 19:03
  Speaker 1: thou dollar raise, just like the other people in his group,
• 19:06
  Speaker 1: but he thinks he deserves more, so he almost he
• 19:08
  Speaker 1: threatens to quit. He finally talks his boss's boss into
• 19:11
  Speaker 1: giving him a little more money, uh, and he agrees
• 19:14
  Speaker 1: to stay. And then it's sort of off to the races.
• 19:16
  Speaker 1: They start moving him up pretty swiftly, and he rises
• 19:19
  Speaker 1: through the ranks at GE for you know, better part
• 19:23
  Speaker 1: of twenty odd years, twenty five years before he's ultimately
• 19:26
  Speaker 1: made CEO. Why does he get moved up the ranks
• 19:38
  Speaker 1: and it's just despite his edgy personality or somehow does
• 19:42
  Speaker 1: that help him? And how does he get chosen at CEO? Yeah?
• 19:48
  Speaker 1: It certainly seemed to help him. You know, ge was
• 19:51
  Speaker 1: a deferential culture. It was in line with much of
• 19:56
  Speaker 1: corporate America where there weren't a lot of very hard
• 19:59
  Speaker 1: edge is um. But the fact that he was so
• 20:03
  Speaker 1: different and that he was willing to essentially fire people
• 20:08
  Speaker 1: to improve the profitability of a group, that he was
• 20:10
  Speaker 1: willing to push his executives and his team members to
• 20:15
  Speaker 1: go harder, to work faster, to take chances with volatile processes,
• 20:21
  Speaker 1: and which in one case resulted in the of blowing
• 20:24
  Speaker 1: up of a factory that he was very proud of
• 20:27
  Speaker 1: in in his own way, this set him apart. And
• 20:30
  Speaker 1: so at that moment, after a decorative stagflation, just just
• 20:33
  Speaker 1: just just slow down for one second. Define for those
• 20:37
  Speaker 1: who were not as sophisticated and informed as you, what
• 20:39
  Speaker 1: do you mean by him blowing up a factory. Yeah,
• 20:43
  Speaker 1: this is a relatively well well documented incident. Somewhat earlier
• 20:49
  Speaker 1: in his career. He's running a factory in Massachusetts. They're
• 20:55
  Speaker 1: trying to come up with a new product. There's a
• 20:57
  Speaker 1: real pressure from the folks up to op or down
• 21:01
  Speaker 1: in Fairfield as it were, at headquarters, to get this
• 21:04
  Speaker 1: right and to make a profitable new plastic A S
• 21:08
  Speaker 1: A P and get it to market. They were having
• 21:10
  Speaker 1: trouble doing it, but Welch, you know, had his team
• 21:15
  Speaker 1: pushing as hard as they possibly could, and in the
• 21:18
  Speaker 1: end that meant experimenting with some very highly volatile processes
• 21:24
  Speaker 1: and solutions that probably hadn't been fully vetted from a
• 21:27
  Speaker 1: safety perspective. And one day he's sitting there in his
• 21:31
  Speaker 1: office overlooking Plastics Avenue in Massachusetts and boom, the whole
• 21:35
  Speaker 1: plant blows up and there's a massive explosion the building,
• 21:40
  Speaker 1: the roof of the building is blown off. Miraculously, no
• 21:44
  Speaker 1: one has hurt, no one is seriously injured, no one
• 21:46
  Speaker 1: has killed uh. And yet it was sort of one
• 21:51
  Speaker 1: of these early anecdotes that that demonstrated just how potentially
• 21:57
  Speaker 1: volatile this man was, how how explosive he could be
• 22:01
  Speaker 1: as a manager. He's called to Fairfield to headquarters the
• 22:04
  Speaker 1: next day as to drive a hundred miles or so
• 22:06
  Speaker 1: and explain himself to the to the higher ups at headquarters,
• 22:10
  Speaker 1: and essentially they gave him a pass. And that, to me,
• 22:13
  Speaker 1: I think, really was one of those moments where he
• 22:18
  Speaker 1: suddenly realized that he could get away with it, and
• 22:21
  Speaker 1: even if he pushed people. Even if he was taking chances,
• 22:26
  Speaker 1: even if he caused some real destruction, there weren't immediate consequences,
• 22:31
  Speaker 1: and that I have to believe embolded him. Going forward.
• 22:36
  Speaker 1: How do you actually get the Giga CEO? There was
• 22:39
  Speaker 1: a process, as there always is. Regg Jones himself requested
• 22:44
  Speaker 1: that Jack b included in the in the vetting process,
• 22:50
  Speaker 1: and then um, they made they made the the potential
• 22:56
  Speaker 1: candidates to succeed Red Shans write a series of memos
• 22:59
  Speaker 1: to a series of interviews. Uh. And in one of
• 23:02
  Speaker 1: those memos, Welch outlines this vision for a much more aggressive,
• 23:08
  Speaker 1: much more competitive, much more ruthless, frankly version of g E,
• 23:13
  Speaker 1: one that would compete in a different way in the
• 23:16
  Speaker 1: nineteen eighties. And uh, you know Jones and the board
• 23:21
  Speaker 1: they bought into that vision, and he got the gig
• 23:23
  Speaker 1: and he was he was young, he was a shock candidate.
• 23:26
  Speaker 1: And uh, I think I'm quote, I think I'm gonna
• 23:28
  Speaker 1: get this quote right when when when it was announced
• 23:31
  Speaker 1: the Wall Street Journal said that g E had replaced
• 23:35
  Speaker 1: a legend with a live wire. So we know, via
• 23:39
  Speaker 1: ge capital and so many other things, that Jack was
• 23:45
  Speaker 1: really into financialization. The average person was not aware of
• 23:49
  Speaker 1: the extreme depth of financialization on Wall Street until the
• 23:55
  Speaker 1: two thousand and eight crash, But even for years before that,
• 24:00
  Speaker 1: people had commented that Wall Street no longer build things,
• 24:04
  Speaker 1: It was the business of money that was their business.
• 24:08
  Speaker 1: To what degree was Jack responsible for that and how
• 24:12
  Speaker 1: did he get into that vertical of capital. I would
• 24:18
  Speaker 1: hesitate to put the whole transformation of Wall Street on
• 24:24
  Speaker 1: Welch's feet. I lay a lot of blame at his
• 24:27
  Speaker 1: feet for a lot of different issues. I think Wall
• 24:29
  Speaker 1: Street was going to be changing during the nineteen eighties
• 24:31
  Speaker 1: almost no matter what. Where I think welch Is influence
• 24:36
  Speaker 1: really connected Wall Street with corporate America. Was the degree
• 24:42
  Speaker 1: to which he made Ge adopt a lot of the
• 24:47
  Speaker 1: worst aspects of banks and other global financial institutions. And
• 24:51
  Speaker 1: we then saw many other companies following suit and doing
• 24:55
  Speaker 1: some of the same things. In terms of how exact
• 25:00
  Speaker 1: he did it, it all started with this little unit
• 25:03
  Speaker 1: called GE Capital um. GE had a finance arm for
• 25:07
  Speaker 1: decades and decades during the nineteenth century and excuse me,
• 25:11
  Speaker 1: during the twentieth century, and it was mainly used as
• 25:15
  Speaker 1: a way to help corporations and even individuals finance their
• 25:19
  Speaker 1: purchase of ge products and services. If you couldn't pay
• 25:23
  Speaker 1: for uh, you know, your refrigerator outright, it was basic
• 25:28
  Speaker 1: lending arm. They could they pay, charge a little interest
• 25:31
  Speaker 1: and you could pay it in installments. Welch saw the
• 25:34
  Speaker 1: potential of taking that arm and turning it into what
• 25:39
  Speaker 1: was essentially an unregulated bank and ran with it. And
• 25:43
  Speaker 1: he saw it from the get go. He's in one
• 25:46
  Speaker 1: of those memos I mentioned that he wrote to Red Jones.
• 25:49
  Speaker 1: He said there was no where at the company where
• 25:53
  Speaker 1: quantum change, I believe was the phrase he used, was
• 25:56
  Speaker 1: needed more than in finance, because he understood in this
• 26:00
  Speaker 1: kernel of a little business unit, there was the potential
• 26:04
  Speaker 1: to create what would ultimately be a six hundred billion
• 26:08
  Speaker 1: dollar pool of capital that stretched from everything from least
• 26:13
  Speaker 1: satellites to tie auto loans to commercial real estate debt. Okay,
• 26:20
  Speaker 1: so tell my audience how we ended up using the
• 26:24
  Speaker 1: capital to ensure that he met his quarterly targets. G
• 26:30
  Speaker 1: E by the time he was done, had an army
• 26:35
  Speaker 1: of financial analysts and experts who literally at the end
• 26:40
  Speaker 1: of every quarter. So you're after report earnings to Wall
• 26:44
  Speaker 1: Street on call it March one. By mid February. You've
• 26:49
  Speaker 1: got hundreds of not thousands, of people running the numbers
• 26:53
  Speaker 1: and saying, we told them we were gonna make I'm
• 26:56
  Speaker 1: gonna make it up here million dollars in profit for
• 26:59
  Speaker 1: the quarter. It looks like we're going to be coming
• 27:01
  Speaker 1: in closer to three eighteen million dollars. We need that
• 27:05
  Speaker 1: seven million dollars. Well, then, with such an enormous operation
• 27:10
  Speaker 1: like ge capital at your disposal, you've got any number
• 27:14
  Speaker 1: of ways to find that extra seven million dollars in profit.
• 27:18
  Speaker 1: You could do anything from sell of division or sell
• 27:22
  Speaker 1: a portfolio of credit card pones. You could perhaps even
• 27:27
  Speaker 1: lay people off and take a tax right off. You know,
• 27:31
  Speaker 1: there were absolutely infinite ways that g E found to
• 27:36
  Speaker 1: essentially use this enormous financial harm to UH, as you said,
• 27:41
  Speaker 1: massage the numbers quarter after quarter. And it was that
• 27:44
  Speaker 1: sort of creative accounting, if you will, that allowed g
• 27:48
  Speaker 1: E to hit meter beat for eighty quarters some odd
• 27:51
  Speaker 1: in a row. Okay, was there any way this could
• 27:56
  Speaker 1: have worked? Or was it always a time bone? There
• 28:03
  Speaker 1: was always going to be a reckoning at some level,
• 28:06
  Speaker 1: because it wasn't just about the degree to which ge
• 28:10
  Speaker 1: stock might have been overinflated. Because of the prominence of
• 28:14
  Speaker 1: G Capital. The other thing that was happening during the
• 28:18
  Speaker 1: eighties and nineties was that g was under investing in
• 28:22
  Speaker 1: research and development, They were fundamentally transforming their relationship with
• 28:29
  Speaker 1: their employees, they were buying and merging their way into
• 28:35
  Speaker 1: dozens of other industries, and so a reckoning was going
• 28:41
  Speaker 1: to take place without a doubt. The question that animates me,
• 28:44
  Speaker 1: and which you know it's it's a counter factual, so
• 28:46
  Speaker 1: we're not going to have a clear answer to is
• 28:48
  Speaker 1: what would have happened if somewhere along the way, be
• 28:52
  Speaker 1: it the nineties or the early two thous even after
• 28:55
  Speaker 1: Jack left and Jeff Emmott had a couple of chances
• 28:58
  Speaker 1: to reset the company, It would have happened if there
• 29:01
  Speaker 1: was a serious effort made to wind down GE Capital,
• 29:05
  Speaker 1: to double down on American manufacturing, to make kick ass
• 29:09
  Speaker 1: products and services, and do it in a way that
• 29:13
  Speaker 1: would have positioned g E to become the number one manufacturer,
• 29:17
  Speaker 1: the number one industrial company for the twenty one century.
• 29:23
  Speaker 1: They did it right. They had done it for the
• 29:24
  Speaker 1: twentieth century, and there's nothing to say that they couldn't
• 29:29
  Speaker 1: have done it for the twenty first century, except they
• 29:33
  Speaker 1: chose not to write. They chose to go and buy portfolios,
• 29:36
  Speaker 1: some pride mortgages. In two thousand five, they chose to
• 29:39
  Speaker 1: under invest in R and D. For the longest time,
• 29:42
  Speaker 1: the culture ossified and people and I talked about this
• 29:44
  Speaker 1: in the book. You know, people were afraid to take chances.
• 29:47
  Speaker 1: There was no willingness to spend and really invest in
• 29:51
  Speaker 1: sort of blue sky initiatives that might have positioned g
• 29:55
  Speaker 1: E to become a leader and say autonomous vehicles or
• 29:58
  Speaker 1: three D printing or any number of other things that
• 30:01
  Speaker 1: are gonna be a big part of the economy going forward,
• 30:03
  Speaker 1: and that they weren't in yet. But they had the resources,
• 30:06
  Speaker 1: and they had the smart They still have tons of
• 30:08
  Speaker 1: smart engineers at that company, but they weren't willing to
• 30:10
  Speaker 1: do it. Okay, GEE ultimately buys INNBC. Everybody is aware
• 30:16
  Speaker 1: of it because David Letterman is making jokes all the time.
• 30:20
  Speaker 1: Was this purely an ego play to get into media
• 30:23
  Speaker 1: and have that power and rub shoulders with the stars
• 30:27
  Speaker 1: or at one point was this scene as a good
• 30:29
  Speaker 1: business Well. G E acquired NBC through its acquisition of
• 30:33
  Speaker 1: r c A, which was another diversified conglomerate in the
• 30:37
  Speaker 1: nineteen eighties, and there's no doubt about it. Ge uh
• 30:41
  Speaker 1: debt and Jack, Well, it's definitely liked being a media mogul. Um.
• 30:46
  Speaker 1: He relished in his ability to sort of rub shoulders
• 30:49
  Speaker 1: with movie stars and even at times, you know, do
• 30:53
  Speaker 1: his small part to try and influence coverage of the press. Um.
• 30:58
  Speaker 1: But what to the ear of your question, was it
• 31:00
  Speaker 1: seen as a good business move? Sure? Right, if we
• 31:04
  Speaker 1: accept that Jack Welch's mandate was to make GE the
• 31:10
  Speaker 1: biggest company in the world, Um, the acquisition of r
• 31:14
  Speaker 1: C a fulfill help fulfill that mandate. You know, he
• 31:17
  Speaker 1: also wanted to be number one and number two in
• 31:19
  Speaker 1: every industry. And I believe the combination of the r
• 31:21
  Speaker 1: C A business with the g E t V set business, uh,
• 31:26
  Speaker 1: you know made the g E t V business sort
• 31:29
  Speaker 1: of number one or number two in the world. So
• 31:32
  Speaker 1: in those sort of rudimentary ways in which he evaluated
• 31:36
  Speaker 1: his strategy and focused on trying to figure out how
• 31:40
  Speaker 1: to make g E bigger and more profitable at the time, Yeah,
• 31:44
  Speaker 1: that was actually a relative I would say that was
• 31:46
  Speaker 1: one of the sounder moves. Yeah, it did take them
• 31:49
  Speaker 1: into the media business where they hadn't been, but there
• 31:51
  Speaker 1: were some underlying fundamental industrial plays as part of that big,
• 31:56
  Speaker 1: mega deal in I think it was that that certainly
• 31:59
  Speaker 1: made some sense. Okay. Parallel to this story is the
• 32:05
  Speaker 1: term or actually two terms of Ronald Reagani is president,
• 32:09
  Speaker 1: needless to say, took over from Jimmy Carter after the
• 32:13
  Speaker 1: Iran hostage crisis and incredible inflation. But that's when income
• 32:19
  Speaker 1: inequality started, That's when corporate taxes started to fall. To
• 32:24
  Speaker 1: what degree was Jack Welch ge helped by this Reaganism
• 32:32
  Speaker 1: or to what degree are they really separate? Jack would
• 32:35
  Speaker 1: have done this no matter what, gotten away with it. Oh,
• 32:37
  Speaker 1: I think they are deeply in mesh. These are symbiotic stories,
• 32:42
  Speaker 1: and I allude to Reaganism and Reagan several times throughout
• 32:45
  Speaker 1: the book because you're absolutely right that it was some
• 32:49
  Speaker 1: of the deregulation during the Reagan administration that enabled some
• 32:56
  Speaker 1: of gees or most outrageous shenanigans. For example, even that
• 33:02
  Speaker 1: um that was it. Even the r c A deal
• 33:05
  Speaker 1: I think was enabled by a rough boxing of antitrust
• 33:12
  Speaker 1: statutes by the Reagan administration. There was some weird cause
• 33:15
  Speaker 1: from earlier in the twenty century that expressly prohibited g
• 33:19
  Speaker 1: E and r c A from linking up, but that was,
• 33:23
  Speaker 1: you know, very communiently removed just before the deal. And
• 33:27
  Speaker 1: then you look at things like stock buy backs, which
• 33:30
  Speaker 1: GE and Welch became absolute pioneers in um. For decades,
• 33:35
  Speaker 1: stock buybacks had essentially been illegal because it's effectively a
• 33:39
  Speaker 1: company manipulated in its own stock price. Under Reagan and
• 33:43
  Speaker 1: his you know, absolute army of financial representatives who took
• 33:49
  Speaker 1: over major regulatory posts in the government, that statute was
• 33:55
  Speaker 1: essentially eliminated, and all of a sudden, it was okay
• 33:58
  Speaker 1: for companies to start buying back their own stock. And
• 34:02
  Speaker 1: you mentioned inequality and corporate taxes. We can talk about those,
• 34:05
  Speaker 1: but it's important to note that another one of those
• 34:09
  Speaker 1: trend lines that sort of starts right around the time
• 34:12
  Speaker 1: Watch takes over and has continued innobated to today is
• 34:16
  Speaker 1: the use of corporate profits for stock buybacks and dividends.
• 34:20
  Speaker 1: And and the money used to be going two employees,
• 34:24
  Speaker 1: the money used to be going to R and D
• 34:26
  Speaker 1: and CAPEX, the money is now going back to investors
• 34:29
  Speaker 1: in the form of buy backs. Well, there's a lot
• 34:31
  Speaker 1: of blowback about that. We can debate whether we're gonna
• 34:34
  Speaker 1: get any change, I'm not optimistic. But something you referenced
• 34:38
  Speaker 1: earlier was the purchase and sale of assets. Now you know,
• 34:45
  Speaker 1: this really becomes bad under Immelt in your book, but
• 34:48
  Speaker 1: it seemed like they were buying stuff just to make
• 34:52
  Speaker 1: the numbers look good without a doubt. I mean, that
• 34:56
  Speaker 1: was some of that, um you know, those sort of
• 34:59
  Speaker 1: lab sminute adjustments the GE capital would make every quarter.
• 35:04
  Speaker 1: And and I have quotes in the book from people
• 35:06
  Speaker 1: who worked at GE happening They're like, yeah, you know,
• 35:08
  Speaker 1: sometimes we needed a little more earnings by the end
• 35:10
  Speaker 1: of the year, and so we would go buy a
• 35:13
  Speaker 1: company that had some earnings and then they were our earnings, right,
• 35:17
  Speaker 1: And so that was a part of this absolute infatuation
• 35:23
  Speaker 1: with deal making that well Chad In in his twenty
• 35:26
  Speaker 1: years as CEO, he conducted something like one thousand mergers
• 35:32
  Speaker 1: and acquisitions. It was this unbelievably torrid pace of deal making,
• 35:39
  Speaker 1: which here's another one began during the whild chair and
• 35:42
  Speaker 1: has really never abated, and it's led to the consolidation
• 35:46
  Speaker 1: of American industries. It's less to more market concentration, and
• 35:51
  Speaker 1: plenty of academics who have done the work more so
• 35:53
  Speaker 1: than I have have pointed out that that market concentration,
• 35:57
  Speaker 1: that consolidation has led to an enormous amount of pain
• 36:03
  Speaker 1: for consumers in the form of higher prices and reduced
• 36:07
  Speaker 1: competition and ultimately reduced innovation for our country. Okay, let's
• 36:13
  Speaker 1: talk about a little closer with our feet on the ground. There.
• 36:17
  Speaker 1: He's worth. He owns his companies, and he's constantly laying
• 36:22
  Speaker 1: people off and closing companies. And there's a social cost
• 36:29
  Speaker 1: with people. Also, if they need people, they hire contractors.
• 36:34
  Speaker 1: Is this something that he pioneers or is he the
• 36:37
  Speaker 1: first one who blows it up? It's just this evidence
• 36:40
  Speaker 1: of what everybody was doing. No, he was one of
• 36:42
  Speaker 1: the first, and and time and again. And this is, Bob,
• 36:45
  Speaker 1: one of the things that struck me and gave me
• 36:47
  Speaker 1: the conviction to really keep going when I started looking
• 36:50
  Speaker 1: into this. He was the first time and dime and
• 36:54
  Speaker 1: dime again. He was the guy that essentially was the
• 36:57
  Speaker 1: progenitor of so many of these absolutely deletarious trends that
• 37:03
  Speaker 1: now seem like as fundamental to us as the weather
• 37:07
  Speaker 1: and the rising and setting of the sun, but are
• 37:09
  Speaker 1: actually just choices that rich executives made in the nineteen
• 37:12
  Speaker 1: eighties that we're all still living with. So when it
• 37:15
  Speaker 1: comes to outsourcing and offshore in ye, had there been
• 37:19
  Speaker 1: a little outsourcing and offshoreing in the years before that,
• 37:22
  Speaker 1: sure was well the first one to get on top
• 37:26
  Speaker 1: of a mountain and screen that this was the way
• 37:29
  Speaker 1: to do business. And was he the first to take
• 37:32
  Speaker 1: a major American employer and absolutely reshape it and make
• 37:38
  Speaker 1: it dependent not on what was essentially lifetime employees who
• 37:43
  Speaker 1: grew up inside that company and could expect to retire them,
• 37:46
  Speaker 1: but bring in this new, more transactional relationship with its
• 37:51
  Speaker 1: employees and state publicly that if he could, he would
• 37:55
  Speaker 1: put every factory on a barge so it would float
• 37:58
  Speaker 1: around the world and inner national waters, changing favorable exchange
• 38:03
  Speaker 1: rates and good anti you know, regulatory policies, and that
• 38:08
  Speaker 1: if he could, he wanted to make every job that
• 38:14
  Speaker 1: he could get to be done outside ge done outside ge.
• 38:19
  Speaker 1: If you could hire people at printing presses to print
• 38:22
  Speaker 1: his stuff printed, if you can fire food service workers
• 38:25
  Speaker 1: to work in his cafeteria, do it. And that's why
• 38:28
  Speaker 1: even today is an employee of the New York Times Company.
• 38:30
  Speaker 1: When I walk into the New York Times building, the
• 38:32
  Speaker 1: first person I see every morning does not work for
• 38:34
  Speaker 1: The New York Times. They are security guards who are
• 38:37
  Speaker 1: hired by a contractor, and I can only hope that
• 38:41
  Speaker 1: they enjoy fair wages and good benefits. But I don't
• 38:45
  Speaker 1: think it's a stretch to believe that it's not what
• 38:49
  Speaker 1: The New York Times offers his journalists and other people
• 38:53
  Speaker 1: on the payroll. Okay. The other thing Jack is famous
• 39:03
  Speaker 1: for is the ten percent firing, the ten percent at
• 39:06
  Speaker 1: the bottom. This was lauded unbelievably. Okay, and you wrote
• 39:11
  Speaker 1: a book about mindfulness, not that I'm exactly sure what
• 39:14
  Speaker 1: that means. But was this good for business? Was there
• 39:20
  Speaker 1: an ultimate cost in dissatisfaction and competition amongst the employees?
• 39:25
  Speaker 1: And how does mindfulness fit into the whole corporate structure?
• 39:30
  Speaker 1: M hm, Well, you're referring to stack ranking, which is
• 39:35
  Speaker 1: the process that Welch innovated pioneered of telling managers to
• 39:41
  Speaker 1: sort their employees into the top A, B and C players.
• 39:46
  Speaker 1: A players of your workforce, they're the best. The B
• 39:49
  Speaker 1: players are the mediocre, middle those you know in the middle,
• 39:54
  Speaker 1: and the bottom is the ten percent the C players.
• 39:57
  Speaker 1: And what said your ten players? Your ten percent those
• 40:00
  Speaker 1: c players every year they gotta go um. That was
• 40:04
  Speaker 1: one of these sort of cold hearted management techniques that
• 40:09
  Speaker 1: Welch pioneered and became popular at GE. But because GE
• 40:14
  Speaker 1: was so influential, everyone else started to do it, and
• 40:18
  Speaker 1: it really caught hold in corporate America and it continues
• 40:22
  Speaker 1: to this day. It was popular under Steve Balmer at
• 40:26
  Speaker 1: Microsoft for the longest time, and companies like we Work
• 40:29
  Speaker 1: and Uber have been using stack ranking even recently. So
• 40:34
  Speaker 1: yet again, here we have this sort of signature, weird,
• 40:39
  Speaker 1: sort of ruthless innovation by Welch about firing temper cent
• 40:43
  Speaker 1: of his workforce every year, something he started doing in
• 40:46
  Speaker 1: the nineteen eighties, still around with us forty years later.
• 40:51
  Speaker 1: This is the guy that broke capitalism. That's why I
• 40:53
  Speaker 1: called it that. Okay, just throw in the mindful news part.
• 40:59
  Speaker 1: How should people be operating? Because another point you make
• 41:02
  Speaker 1: in the book is this, you know, UH, as a
• 41:05
  Speaker 1: result of the stack ranking, it reduces UH cooperative working.
• 41:10
  Speaker 1: They're all sorts of costs that people don't see right
• 41:13
  Speaker 1: on the surface. So how should these companies be run? Listen,
• 41:17
  Speaker 1: I I'm not a management expert and I've never been
• 41:23
  Speaker 1: a CEO. And I'm the first to admit that. So
• 41:26
  Speaker 1: I can't tell a company exactly how to run. What
• 41:29
  Speaker 1: I can say is that when I look at CEOs
• 41:33
  Speaker 1: who are able to steward their companies in the long
• 41:38
  Speaker 1: term and create real value not only for their top investors,
• 41:43
  Speaker 1: the hedge funds that might own twelve of the stock
• 41:46
  Speaker 1: or whatever, but for all the different constituents that they serve,
• 41:50
  Speaker 1: from their employees, to their communities, to the you know,
• 41:54
  Speaker 1: people down their supply chain, and yes, of course their investors. Uh.
• 41:59
  Speaker 1: I see CEOs that operate in a fundamentally different way.
• 42:03
  Speaker 1: They are not mercenaries looking to cut costs wherever they can.
• 42:08
  Speaker 1: They are not you know, sort of these cold eyed
• 42:12
  Speaker 1: um you know being counters who simply focus on the
• 42:16
  Speaker 1: numbers to the exclusion of all other considerations. They are
• 42:20
  Speaker 1: men and women who take a much more holistic view
• 42:24
  Speaker 1: of their responsibilities as business leaders and bring to mind
• 42:29
  Speaker 1: the nuances of all of that complex set of responsibilities
• 42:35
  Speaker 1: that they have when making decisions about hiring and firing,
• 42:39
  Speaker 1: about investment, about strategy, and what companies they what kind
• 42:44
  Speaker 1: of companies they want to run, and what company is
• 42:46
  Speaker 1: they want to buy and sell. So I can't sit
• 42:51
  Speaker 1: here and give you a short answer to how to
• 42:53
  Speaker 1: run a company. What I can say is, in the
• 42:56
  Speaker 1: long run, the Jack Walsh playbook usually leads to ruin. Okay,
• 43:01
  Speaker 1: just because I'm interested. You know, they would have these
• 43:04
  Speaker 1: retreats at their campus, not the Fairfield campus, but a
• 43:09
  Speaker 1: separate campus, and other companies have replicated this is this
• 43:13
  Speaker 1: just basically an old boys network? What really goes on there?
• 43:17
  Speaker 1: Is there any benefit? I think a lot of people
• 43:20
  Speaker 1: who went there would say there's lots of benefit. Um,
• 43:24
  Speaker 1: this was you're referring to a place colloquially known as Crotonville,
• 43:29
  Speaker 1: which was the g E Management Development Center. I think
• 43:32
  Speaker 1: I got that right in Croton on Hudson, a small
• 43:35
  Speaker 1: village just north of New York City, and it was
• 43:38
  Speaker 1: one of the first of its kind sort of offsite
• 43:42
  Speaker 1: retreat centers executive learning centers. Uh. And as you said,
• 43:46
  Speaker 1: it was replicated by many other big American companies, including me.
• 43:50
  Speaker 1: I'm going to forget them all, but had Hotchi, IBM, Bowie, etcetera.
• 43:54
  Speaker 1: All sort of saw what che did and made it
• 43:57
  Speaker 1: and over the years it served many different purposes. Welch
• 44:00
  Speaker 1: wasn't the one who who pioneered it. He sort of
• 44:03
  Speaker 1: revived it and brought it back when he took over,
• 44:06
  Speaker 1: but it was it was extant for much of the
• 44:09
  Speaker 1: twentieth century and served as a place where GE leaders
• 44:13
  Speaker 1: would go and essentially go to in house business school.
• 44:17
  Speaker 1: This is where they could go brush up on strategy
• 44:20
  Speaker 1: learned from their colleagues, take classes on this, that or
• 44:23
  Speaker 1: the other. You know, how to dodge taxes? Um. I
• 44:28
  Speaker 1: don't know exactly what the curriculum was under Welch, but
• 44:31
  Speaker 1: it was clear that this was an effort by him
• 44:35
  Speaker 1: and his executive team to create a system where they
• 44:41
  Speaker 1: could drive their values, drive their vision, drive their tactics
• 44:46
  Speaker 1: deep down into the organization. And by all accounts, it
• 44:49
  Speaker 1: was very successful. Um so was it old boys club? Yeah?
• 44:54
  Speaker 1: I'm sure there were elements of that. You put enough
• 44:56
  Speaker 1: well paid executives at an off site and inevitably there's
• 45:01
  Speaker 1: gonna be some uh, some antics, and I document some
• 45:04
  Speaker 1: of those in the book. But but I think the
• 45:07
  Speaker 1: more interesting thing to me is the degree to which
• 45:11
  Speaker 1: they really formalized the um. The teaching formalized the training
• 45:19
  Speaker 1: of the Jackbosh worldview for so many thousands of g
• 45:23
  Speaker 1: E employees who worked there. Okay, let's talk about the
• 45:26
  Speaker 1: big one from the street level executive compensation. I did
• 45:32
  Speaker 1: not grow up in a poor environment, but you were
• 45:34
  Speaker 1: rich if you drove a Cadillac. Okay, maybe I grew
• 45:39
  Speaker 1: up next to Westport, Connecticut. I think I saw Ferrari
• 45:42
  Speaker 1: once in my whole life until I moved to Los Angeles.
• 45:46
  Speaker 1: So you have these incredible paid packages which go on
• 45:50
  Speaker 1: to today. Now, one of the things these companies or
• 45:53
  Speaker 1: these boards say, if we don't pay this amount of money,
• 45:57
  Speaker 1: somebody else will to what the we? Is Jack responsible
• 46:02
  Speaker 1: for this incredible run up in executive compensation? Yeah, here's
• 46:08
  Speaker 1: another one where I think I'll put a little of
• 46:10
  Speaker 1: the blame in his feet, but certainly not all of it. UM,
• 46:13
  Speaker 1: no doubt about it. He was one of the first
• 46:16
  Speaker 1: CEOs in the nineteen eighties and nineteen nineties to start
• 46:18
  Speaker 1: getting these gargantuan pay packages. And it's important to remember
• 46:22
  Speaker 1: that he was not an inventor, he was not a founder.
• 46:25
  Speaker 1: He is a people manager. Um. He was. He was
• 46:28
  Speaker 1: paid to run this company, uh, and he was rewarded
• 46:32
  Speaker 1: as if he were a king for it. He made
• 46:35
  Speaker 1: first tens of millions of dollars and hundreds of millions
• 46:38
  Speaker 1: of dollars. By the end of his career, his net
• 46:40
  Speaker 1: worth was approaching a billion dollars. He was on the
• 46:43
  Speaker 1: Ford four hundred list of the richest Americans arrive at
• 46:47
  Speaker 1: the time. Uh, and so was he emblematic of it? Absolutely?
• 46:52
  Speaker 1: Was his board complicit? And do they deserve a ton
• 46:55
  Speaker 1: of the blame? Absolutely? Was it probably gonna happen in
• 46:59
  Speaker 1: any case? I think, so this is this is one
• 47:03
  Speaker 1: where the there were enough other people who saw the opportunity.
• 47:09
  Speaker 1: My sense is that, um, it's hard for me to
• 47:12
  Speaker 1: see sort of a an alternate history where we don't
• 47:18
  Speaker 1: have executive compensation that's just wildly out of control in
• 47:23
  Speaker 1: the way that it is today. Um, because you know,
• 47:25
  Speaker 1: that's and it's like the American story to me, this
• 47:27
  Speaker 1: is where just the nature of who we are as
• 47:30
  Speaker 1: a country and our you know, the absence of guardrails
• 47:34
  Speaker 1: on on the economy and on capitalism that we seem
• 47:37
  Speaker 1: to love so much, it takes us to these truly
• 47:40
  Speaker 1: unhealthy extremes and and basically people say, you know, we're
• 47:44
  Speaker 1: not going to do anything about it, and and so
• 47:47
  Speaker 1: what Yeah, So that that's sort of how I think
• 47:50
  Speaker 1: about Welch in the executive compensation. Was he a main driver? Yes?
• 47:55
  Speaker 1: Was he solely responsible? I want to be careful there.
• 47:59
  Speaker 1: Oh okay. One big element of the book is how
• 48:03
  Speaker 1: his disciples go on to blow up these companies across America.
• 48:08
  Speaker 1: So he's so successful, other boards want some of this magic.
• 48:13
  Speaker 1: These employees that are now CEOs replicate the paradigm, and
• 48:20
  Speaker 1: the companies do incredibly poorly. Tell us about that. Even
• 48:24
  Speaker 1: before Jack was born, GE was seen as the training
• 48:32
  Speaker 1: ground for other executives around corporate America. It had this
• 48:37
  Speaker 1: long and distinguished history throughout the twentieth century of being
• 48:41
  Speaker 1: the place where other CEOs were taught how to do
• 48:47
  Speaker 1: their business, which is to say that when another company
• 48:50
  Speaker 1: wanted to hire their next CEO, they looked to GE.
• 48:55
  Speaker 1: The thinking was that g E executives were just head
• 48:58
  Speaker 1: and shoulders above the rest of the competition. And for
• 49:02
  Speaker 1: that reason, people already before Jack wanted to hire from
• 49:06
  Speaker 1: g when they needed a new boss. Under Welch, that
• 49:11
  Speaker 1: was taken to a wild extreme. And that is because
• 49:15
  Speaker 1: in part Jack Welch was so successful during his run
• 49:20
  Speaker 1: in generating stock value, and so when other CEOs and
• 49:24
  Speaker 1: boards said we need a new CEO. They thought that
• 49:29
  Speaker 1: people who worked for Welch might have the Midas touch,
• 49:33
  Speaker 1: that if they were able to be a part of
• 49:35
  Speaker 1: Welch's machine making so much money for GE shareholders, maybe
• 49:40
  Speaker 1: they could do it at all these other companies. And
• 49:44
  Speaker 1: as a result, I don't I don't have a specific count,
• 49:47
  Speaker 1: and I don't know that anyone does, because there were, frankly,
• 49:50
  Speaker 1: so many over so many years. But there are dozens
• 49:54
  Speaker 1: and dozens and dozens, probably more than sixty individuals who
• 49:58
  Speaker 1: worked directly for Welch and then went on to run
• 50:01
  Speaker 1: other US public companies. And while I don't have a
• 50:04
  Speaker 1: completely exhaustive list because I don't know again that one
• 50:08
  Speaker 1: is available, what I can say with certainty is that
• 50:12
  Speaker 1: almost in every case, the same story repeated itself, ad infinitum.
• 50:18
  Speaker 1: The CEO was hired by a new company from a
• 50:21
  Speaker 1: position at g E. They were giving a multimillion dollar
• 50:26
  Speaker 1: pay package that ensured them a gilded retirement no matter
• 50:30
  Speaker 1: what happened to that company. They put to work the
• 50:35
  Speaker 1: Jackwelt style of management, downsizing deal making, often diving into
• 50:42
  Speaker 1: finance in many cases, and then within months, sometimes it
• 50:47
  Speaker 1: was sometimes it was quarters, maybe it was a year
• 50:50
  Speaker 1: or two in a few cases, but relatively quickly. All
• 50:54
  Speaker 1: these bad decisions would catch up with them and with
• 50:57
  Speaker 1: the company, and the CEOs almost always left the company's
• 51:02
  Speaker 1: worse off than they inherited them. The CEOs did get
• 51:06
  Speaker 1: their pay package, but many were forced to resign or
• 51:09
  Speaker 1: step down early, and then the companies had to reset
• 51:14
  Speaker 1: because it was proven that well, yeah, Jack was able
• 51:17
  Speaker 1: to do it for twenty years at g E. The
• 51:20
  Speaker 1: strategy just simply does not work, not only in the
• 51:25
  Speaker 1: long term, but but oftentimes in the short term too. Okay,
• 51:28
  Speaker 1: let's talk specifically about Boeing. So Boeing is a legendary
• 51:33
  Speaker 1: American company. They hire a new g disciple, which I
• 51:38
  Speaker 1: was not aware of the time, and move the headquarters
• 51:41
  Speaker 1: to Chicago. That's like the Dodgers having their front office
• 51:44
  Speaker 1: in New York. It just makes no sense. So walk
• 51:49
  Speaker 1: us through what happened there, how that guy got the job,
• 51:52
  Speaker 1: and why the board was so complicit. Yeah, besides Ge itself,
• 51:58
  Speaker 1: there's no company that was more directly shaped by Welch
• 52:02
  Speaker 1: than Bowing. It began in n when Bowing merged with
• 52:07
  Speaker 1: McDonald Douglas, another fading American aircraft manufacturer and As part
• 52:12
  Speaker 1: of that deal, they got this guy named Harry stone
• 52:15
  Speaker 1: Cipher who had worked with Jack under uh at Ge
• 52:20
  Speaker 1: and then was running McDonald douglas and then joins Bowing
• 52:24
  Speaker 1: as part of the merger as a president, not CEO
• 52:27
  Speaker 1: at the time, but as president. But because he had
• 52:30
  Speaker 1: so much stock in McDonald douglas, all of a sudden
• 52:33
  Speaker 1: he's the biggest stock owner at the company. And this
• 52:37
  Speaker 1: guy who's just the president of the company was the
• 52:41
  Speaker 1: CEO of a subsidiary now that was merged into Bowing.
• 52:46
  Speaker 1: He has the most stock, and all of a sudden
• 52:48
  Speaker 1: he starts throwing his weight around inside Bowing, and over
• 52:52
  Speaker 1: the next several years he becomes CEO and makes, as
• 52:55
  Speaker 1: you said, this fateful decision to move Bowing headquarters from Seattle,
• 53:00
  Speaker 1: birthplace of commercial aviation in the country, to Chicago. And
• 53:04
  Speaker 1: why do they do it? For tax breaks? You know,
• 53:08
  Speaker 1: as you said, I love them, I love the Dodgers
• 53:10
  Speaker 1: metaphor uh and and it was it had nothing to
• 53:13
  Speaker 1: do with running a good business and everything to do
• 53:17
  Speaker 1: with making a profit. And in fact, Stonesife for himself
• 53:20
  Speaker 1: said this in two thousand four, he gave an interview
• 53:22
  Speaker 1: where he said, and some people say I'm not running
• 53:25
  Speaker 1: Bowing like an engineering company, and that's right. I'm trying
• 53:28
  Speaker 1: to run up like a business people expect to make money.
• 53:32
  Speaker 1: It's not an engineering firm. Something to that effect. And
• 53:35
  Speaker 1: it was this admission that the Bowing that everyone knew
• 53:40
  Speaker 1: and respected, which is a company that was defined by
• 53:43
  Speaker 1: quality aeronautical engineering, was not long for this world. But
• 53:49
  Speaker 1: he was just the first. Harry Stonesifer was the first
• 53:52
  Speaker 1: of three CEOs who worked directly for Welch who have
• 53:55
  Speaker 1: run Bowing over the last twenty years, and I've really
• 53:58
  Speaker 1: overseen its declined as a great American company. After stone
• 54:02
  Speaker 1: Cipher was fired in two thousand five for having an
• 54:05
  Speaker 1: affair with the subordinate. The guy that they tapped to
• 54:08
  Speaker 1: replace him as Jim McNerney, another Welsh disciple who was
• 54:11
  Speaker 1: actually one of the runner ups after Jeff mmel to
• 54:13
  Speaker 1: take over Welch's job. Jim McNerney takes over Bowing after
• 54:18
  Speaker 1: running three M for a few years and keeps on
• 54:21
  Speaker 1: with this sort of implementation of the Jack Welch playbook.
• 54:25
  Speaker 1: He looks at what they do uh and how they're
• 54:29
  Speaker 1: going to build their next plane, the seven, and he
• 54:32
  Speaker 1: makes two absolutely pivotal decisions. He says, we don't want
• 54:36
  Speaker 1: to build it in Seattle because there's too much union
• 54:38
  Speaker 1: labor there. So they open up a new manufacturing facility
• 54:41
  Speaker 1: in Charleston, where there's not as much unionized labor and
• 54:45
  Speaker 1: where there's no history of aviation manufacturing. And so, guess what,
• 54:48
  Speaker 1: there's all these problems on those planes, something I documented
• 54:51
  Speaker 1: on the front page of the paper. And the other
• 54:53
  Speaker 1: thing he does is start to embrace outsourcing. Is Jack
• 54:55
  Speaker 1: Welch love outsourcing? And so where is Boeing historically manufactured
• 55:01
  Speaker 1: something like two thirds of the parts on any given
• 55:04
  Speaker 1: airplane and outsource the other third. The ratio has flipped
• 55:08
  Speaker 1: under McNerney, and all of a sudden, they're outsourcing two
• 55:11
  Speaker 1: thirds of the parts on their own plane and only
• 55:14
  Speaker 1: building a third of it themselves. And they lose control
• 55:16
  Speaker 1: of quality, that lose control of timing. And then McNerney
• 55:20
  Speaker 1: makes the what I think is the most fateful decision
• 55:23
  Speaker 1: in two thousand and eleven, he's about to lose a
• 55:25
  Speaker 1: big order of seven thirty seven's to America to air Bus,
• 55:29
  Speaker 1: his chief rival, two American airlines, and he tells American Airlines,
• 55:34
  Speaker 1: you know what, give us another week. We got a
• 55:35
  Speaker 1: decision to make. They decide to redesign the seven thirty
• 55:39
  Speaker 1: seven one more time, rather than create a new airplane
• 55:43
  Speaker 1: which would have taken them longer, which would have made
• 55:46
  Speaker 1: would have which would have meant that they would have
• 55:47
  Speaker 1: lost out this critical order to air Bus. And he says,
• 55:52
  Speaker 1: we will redesign the seven thirty seven one more time,
• 55:55
  Speaker 1: and that point becomes the seven thirty seven packs, which
• 55:58
  Speaker 1: of course crashed twice in five months, killing three sex people,
• 56:02
  Speaker 1: something I spent a year of my life reporting on.
• 56:06
  Speaker 1: McNerney is finally replaced by a man named Dennis Muhlenberg.
• 56:09
  Speaker 1: Muhlenberg oversees the two crashes, the period around the two crashes,
• 56:15
  Speaker 1: and when Muhlllemberg is finally fired because it's completely inept
• 56:19
  Speaker 1: in managing Bowing through a crisis, he's replaced by Dave Calhoun,
• 56:24
  Speaker 1: yet another Welch disciple, a guy who, at the age
• 56:27
  Speaker 1: of forty two was considered a potential successor to Welch
• 56:30
  Speaker 1: because he was such a likeness of the young Welch himself,
• 56:35
  Speaker 1: and who to this day is the CEO of the
• 56:38
  Speaker 1: Boeing Company. Okay, how did you end up on the
• 56:42
  Speaker 1: Bowing beat? I walked into the newsroom one morning in
• 56:49
  Speaker 1: I guess it was March of two thousand nineteen, having
• 56:54
  Speaker 1: never written about the airline industry before, but sitting next
• 56:57
  Speaker 1: to the woman who had been covering airlines for US,
• 57:00
  Speaker 1: but who happened to be on vacation that day. And
• 57:03
  Speaker 1: when the business editor of the New York Times wandered
• 57:05
  Speaker 1: over to our desk, she said, Julie's gone, David, what
• 57:09
  Speaker 1: are you doing right now? And I said the only
• 57:11
  Speaker 1: right answer, which is I don't know what am I
• 57:14
  Speaker 1: doing right now? You tell me, boss, And she said,
• 57:17
  Speaker 1: called Bowing because another plane had just crashed. And that
• 57:20
  Speaker 1: was how I began covering it. Um one of the
• 57:22
  Speaker 1: things we can do as reporters, um is learned pretty quickly.
• 57:26
  Speaker 1: And so the next year of my life was a
• 57:29
  Speaker 1: UM I was going to use a poor metaphor there,
• 57:32
  Speaker 1: but but but an accelerated learning period of trying to
• 57:36
  Speaker 1: understand the airline industry and UM getting, you know, ultimately
• 57:41
  Speaker 1: pretty deeply sourced inside the Bowing company, you know, Boeing
• 57:45
  Speaker 1: obfuscated and denied responsibility. Trump seemed to be on their
• 57:51
  Speaker 1: team to what did we were you in the press
• 57:55
  Speaker 1: responsible for opening this story and shining light on the facts.
• 57:59
  Speaker 1: And what was it like being right? You know, they're
• 58:03
  Speaker 1: on the point of a story. Well, I mean, we
• 58:06
  Speaker 1: broke a ton of important critical stories in the Bowing coverage.
• 58:11
  Speaker 1: So did the Wall Street Journal, so did the Seattle Times. Uh,
• 58:15
  Speaker 1: there was a huge amount of media interest, and there's
• 58:17
  Speaker 1: no doubt that some of the revelations that the Times,
• 58:22
  Speaker 1: the Journal in the Seattle Times were responsible in helping
• 58:26
  Speaker 1: uncover tremendously helped shape the narrative and um ultimately exposed
• 58:32
  Speaker 1: what had actually happened. It's also true that the House
• 58:38
  Speaker 1: Transportation and Infrastructure Committee took this very seriously and devoted
• 58:43
  Speaker 1: a huge amount of federal legislative investigative muscle to this story.
• 58:49
  Speaker 1: And as a result, we're able to obtain I gotta
• 58:52
  Speaker 1: believe millions and millions of pages of Bowing documents, of
• 58:55
  Speaker 1: which many hundreds or maybe a few thousand were ultimately
• 58:59
  Speaker 1: made public and earns about the crashes. Um, So there
• 59:02
  Speaker 1: were there were a lot of eyes on Bowing after
• 59:05
  Speaker 1: the second crash, of course. Uh. And I want to
• 59:09
  Speaker 1: respect the work we did and our competitors did, but
• 59:12
  Speaker 1: but I don't think it's fair to say that the
• 59:14
  Speaker 1: press alone was responsible for uncovering, you know, the true
• 59:18
  Speaker 1: and full story of what happened inside Boeing. Now is
• 59:29
  Speaker 1: your role, in your role as a reporter for The
• 59:31
  Speaker 1: New York's Times on this beat? To what degree was
• 59:35
  Speaker 1: reporting based on accumulating and reading these documents as opposed
• 59:42
  Speaker 1: to getting on the phone sending emails asking people questions.
• 59:46
  Speaker 1: Is this for Bowing or for the book for Boeing? Oh,
• 59:50
  Speaker 1: it was a mix. I mean, we we had a
• 59:53
  Speaker 1: spreadsheet and I think I can talk about this publicly,
• 59:56
  Speaker 1: but there was a team of reporters working on It
• 59:58
  Speaker 1: wasn't just me, and we as a team had a
• 1:00:01
  Speaker 1: shared Google doc that, by the end of our year
• 1:00:05
  Speaker 1: on this story had the names of more than a
• 1:00:08
  Speaker 1: thousand people who we had contacted. And so there was
• 1:00:12
  Speaker 1: a lot of cold calling. There was knocking on doors,
• 1:00:15
  Speaker 1: There were handwritten letters that were sent. Uh, there were
• 1:00:19
  Speaker 1: you know, innumerable LinkedIn messages and Twitter dems. We we
• 1:00:24
  Speaker 1: worked real hard to talk to as many people as
• 1:00:26
  Speaker 1: we could, and we ultimately got you know, many many
• 1:00:29
  Speaker 1: important voices on the record. Um who who for? You know,
• 1:00:34
  Speaker 1: A variety of reasons initially didn't want to go on
• 1:00:36
  Speaker 1: the record, and and that was pivotal reporting that did shape,
• 1:00:41
  Speaker 1: um beyond, sort of the arc of the investigation itself. Definitely,
• 1:00:45
  Speaker 1: I think I can say with confidence affected personnel decisions
• 1:00:48
  Speaker 1: at Boeing. It was, you know, just the day after
• 1:00:51
  Speaker 1: I published a story on the front page of The
• 1:00:53
  Speaker 1: New York Times with the CEO of Southwest Airlines essentially
• 1:01:00
  Speaker 1: bad mouthing bowing and its leadership, that Dennis Muhgenberg was fired. Uh.
• 1:01:05
  Speaker 1: And those kind of things matter. Um Uh, those kind
• 1:01:10
  Speaker 1: of stories definitely, as you know, get noticed inside a
• 1:01:14
  Speaker 1: big company. Um. So we talked again. You know, I
• 1:01:19
  Speaker 1: personally talked to hundreds of people. With my colleagues, we
• 1:01:22
  Speaker 1: talked to more than a thousand people, and we read
• 1:01:24
  Speaker 1: I don't know how many, you know, thousands of pages
• 1:01:27
  Speaker 1: of airline manuals and documents along the way. Okay, I
• 1:01:31
  Speaker 1: want to drill down really to where the rubber meets
• 1:01:34
  Speaker 1: the road. People are more sophisticated now than they used
• 1:01:39
  Speaker 1: to be. Something happened such that you're at the center
• 1:01:41
  Speaker 1: of a news item. Reporters come out of the woodwork.
• 1:01:44
  Speaker 1: They want to be your best friend. Whatever happens, they
• 1:01:47
  Speaker 1: move on to the next story when they're done with
• 1:01:49
  Speaker 1: you and people are more sophisticated than that. To what
• 1:01:54
  Speaker 1: degree are you anxious about asking people questions? And and
• 1:02:00
  Speaker 1: a lot of people are not withcoming? How do you
• 1:02:03
  Speaker 1: convince them to be forthcoming? Yeah, I don't have a
• 1:02:07
  Speaker 1: lot of anxiety about asking people questions. Um, I'm I
• 1:02:11
  Speaker 1: put my cards on the table when I'm talking to someone,
• 1:02:13
  Speaker 1: I tell them what I want to talk about, So
• 1:02:17
  Speaker 1: that doesn't. Um, that's not a big inhibitor in my
• 1:02:21
  Speaker 1: own work in terms of convincing people to talk to
• 1:02:26
  Speaker 1: us or to go on the record about things they
• 1:02:29
  Speaker 1: might be uncomfortable with. That's one of the hardest things
• 1:02:32
  Speaker 1: and I'm I'm frankly not an expert at it. That's
• 1:02:36
  Speaker 1: I've done some of that in my career, but it's
• 1:02:37
  Speaker 1: not my bread and butter. Um. I think that you know,
• 1:02:42
  Speaker 1: people like my friend Emily Steele, who helped break the
• 1:02:46
  Speaker 1: Bill O'Riley story, our colleagues Jodi Canter and Megan Tooey
• 1:02:52
  Speaker 1: who broke the Harvey Weinstein story for us, they are
• 1:02:56
  Speaker 1: way more seasoned than I in convincing people to talk,
• 1:03:01
  Speaker 1: especially on the record, about really difficult and challenging things.
• 1:03:05
  Speaker 1: H But I think at the end of the day.
• 1:03:07
  Speaker 1: What they would say, if I could summarize for them,
• 1:03:10
  Speaker 1: and what I would say is, you gotta appeal to
• 1:03:14
  Speaker 1: the greater good. And you've got to convince people that,
• 1:03:18
  Speaker 1: even if they don't want to do this, and they
• 1:03:20
  Speaker 1: believe that there might be some personal repercussions for them
• 1:03:23
  Speaker 1: in the form of blowback or embarrassment or making them
• 1:03:27
  Speaker 1: a public figure in a way they're not ready for,
• 1:03:30
  Speaker 1: that there is a greater social good at work here,
• 1:03:33
  Speaker 1: and that they have the opportunity to, you know, help
• 1:03:37
  Speaker 1: make things better for other people, to prevent some suffering
• 1:03:41
  Speaker 1: for other people down the line, uh, and to make
• 1:03:43
  Speaker 1: the world a better place. And I think if you
• 1:03:45
  Speaker 1: can make that argument convincing on you, you got a shot.
• 1:03:48
  Speaker 1: Do you personally have any anxiety about flying on a
• 1:03:52
  Speaker 1: seven seven back? No, because a variety of reasons. I mean,
• 1:03:58
  Speaker 1: I like, uh, tens of thousands of commercial planes take
• 1:04:06
  Speaker 1: off on land every day and almost none of them
• 1:04:09
  Speaker 1: ever crashed. So just by the law of numbers, uh,
• 1:04:13
  Speaker 1: I just like my chances. Um. It's also true that
• 1:04:17
  Speaker 1: the seven even Max has undergone a series of changes
• 1:04:22
  Speaker 1: and revisions and updates that have addressed the problem that
• 1:04:27
  Speaker 1: was responsible for those two crashes. So there's there's no
• 1:04:32
  Speaker 1: that you know, I shouldn't be speaking total declarative, but
• 1:04:36
  Speaker 1: there's almost a zero chance that that seem problem whatever encounter,
• 1:04:43
  Speaker 1: be encountered again. But more more broadly than that, I
• 1:04:46
  Speaker 1: just the law of big numbers suggest that you're very
• 1:04:49
  Speaker 1: very very very very unlikely to die in a commercial
• 1:04:51
  Speaker 1: erwle plane crash. Okay. Recently the New York Times had
• 1:04:55
  Speaker 1: a change in editorship. What has changed, uh, not a
• 1:05:02
  Speaker 1: lot um. You know, Joe con who's our new executive editor,
• 1:05:06
  Speaker 1: was an instrumental part of guiding the daily report for
• 1:05:11
  Speaker 1: years now. He's a known quantity in the newsroom. I
• 1:05:15
  Speaker 1: think his priorities are very avigned with those of Dean mackay.
• 1:05:20
  Speaker 1: So I would not be the first to note that
• 1:05:23
  Speaker 1: this is a pretty drama free succession at the New
• 1:05:26
  Speaker 1: York Times, and I think that's a good thing for
• 1:05:28
  Speaker 1: the paper. Well, many people have commented, and I've noticed
• 1:05:32
  Speaker 1: myself as an avid Times reader, that certainly on the
• 1:05:36
  Speaker 1: political front, there's I don't want to say a few
• 1:05:40
  Speaker 1: or false equivalence us there's more reporting on the right
• 1:05:45
  Speaker 1: and things that are troubling than they're used to be before.
• 1:05:50
  Speaker 1: Is that something you feel at all? I guess I
• 1:05:54
  Speaker 1: would dispute that conclusion. But I would also note that
• 1:05:58
  Speaker 1: Joe has been executive editor for a matter of weeks,
• 1:06:01
  Speaker 1: and that kind of reporting takes months and months to
• 1:06:07
  Speaker 1: plan and deliver. So whatever changes people might have noticed
• 1:06:12
  Speaker 1: on a particular way that we're covering something in the
• 1:06:17
  Speaker 1: past couple of weeks is probably reflective of decisions that
• 1:06:20
  Speaker 1: were made. Uh you know many months prior. How do
• 1:06:23
  Speaker 1: you end up working in the New York Times? Uh?
• 1:06:27
  Speaker 1: So someone just had a good quote about you know,
• 1:06:29
  Speaker 1: luck is what is it? Luck is where opportunity meets
• 1:06:33
  Speaker 1: hard work or something like that. So I feel lucky. UM.
• 1:06:37
  Speaker 1: I also had good opportunities. But I also busted my
• 1:06:40
  Speaker 1: butt for a long time. I was late to the
• 1:06:44
  Speaker 1: journalism game. I was not part of my high school newspaper,
• 1:06:47
  Speaker 1: my college newspaper. It was really in my early twenties
• 1:06:51
  Speaker 1: when I got the journalism bug, and I was designing
• 1:06:53
  Speaker 1: museum exhibitions at the time, doing nothing like reporting at all. Um,
• 1:06:59
  Speaker 1: but I got the bug, and I went back to
• 1:07:00
  Speaker 1: journalism school at Berkeley, and UM, I think a couple
• 1:07:05
  Speaker 1: of things I had a really great professor, a couple
• 1:07:08
  Speaker 1: of really great professors. I got a really great story
• 1:07:12
  Speaker 1: early on that gave me a huge amount of confidence,
• 1:07:15
  Speaker 1: um that I could really do this and and and
• 1:07:18
  Speaker 1: make a go of it. And then I decided to
• 1:07:21
  Speaker 1: focus on business reporting pretty early on, which was a
• 1:07:24
  Speaker 1: strategic moved and one that that really has worked to
• 1:07:28
  Speaker 1: in my advantage over the years. So why business reporting.
• 1:07:32
  Speaker 1: I realized no one else was interested in it and
• 1:07:34
  Speaker 1: I was, and that you know, that delta there was
• 1:07:37
  Speaker 1: very compelling to me because I understood right away not
• 1:07:41
  Speaker 1: only that there were huge stories in business right, businesses everything,
• 1:07:45
  Speaker 1: they're huge stories here. It was super fascinating to me.
• 1:07:49
  Speaker 1: It was where there was power. I could see that
• 1:07:51
  Speaker 1: there was power there and and it was a way
• 1:07:54
  Speaker 1: into reporting on powerful people. And the fact that I
• 1:07:57
  Speaker 1: basically had it to myself among my ass at the
• 1:08:00
  Speaker 1: business at the journalism school meant that it was pretty
• 1:08:03
  Speaker 1: wide open. Uh. And then I also realized that there
• 1:08:06
  Speaker 1: were jobs in it, and I didn't want to be like,
• 1:08:09
  Speaker 1: you know, making sixteen thousand dollars a year right in
• 1:08:12
  Speaker 1: features about street poets for the rest of my life.
• 1:08:16
  Speaker 1: I wanted, like I was gonna do this, I wanted
• 1:08:18
  Speaker 1: to have a real career. Okay. One of the criticisms
• 1:08:22
  Speaker 1: of the New York Times is there's groupthink, and it's
• 1:08:26
  Speaker 1: really like its own sports team, and you don't really
• 1:08:30
  Speaker 1: want to be too much of a star, go too
• 1:08:33
  Speaker 1: far out, maybe hurt the team. To what degree do
• 1:08:37
  Speaker 1: you feel pressure to fall in line with the team
• 1:08:41
  Speaker 1: in general or be fearful that you raise your head
• 1:08:44
  Speaker 1: and do something might piss people off. I don't even
• 1:08:47
  Speaker 1: know what you're talking about. Give me an example. Okay, Well,
• 1:08:49
  Speaker 1: you know there was the whole Taylor Wren's thing that
• 1:08:52
  Speaker 1: people were blowing back. There was the very wise thing
• 1:08:55
  Speaker 1: that people were blowing back. You know what people don't
• 1:08:57
  Speaker 1: realize is these newspapers. This tends to be people who
• 1:09:02
  Speaker 1: see this as a lifelong career, and their employers are
• 1:09:07
  Speaker 1: these giant institutions, writing books individually, etcetera. Something completely different.
• 1:09:13
  Speaker 1: So such that people end up becoming even though they're individuals,
• 1:09:20
  Speaker 1: they're part of the group, and then therefore they can
• 1:09:23
  Speaker 1: react to another person in the group maybe having too
• 1:09:26
  Speaker 1: much success or doing something that pisces them off. We
• 1:09:29
  Speaker 1: had a certain thing to happen at the Washington Post.
• 1:09:32
  Speaker 1: You're in the belly of the beast. Is it just
• 1:09:35
  Speaker 1: calm or can you feel these things? All? Right? I'm
• 1:09:39
  Speaker 1: gonna back up. Uh, I'm an employee of a for
• 1:09:44
  Speaker 1: profit corporation. They pay me to do a job. My
• 1:09:50
  Speaker 1: responsibility is to do my job really well as well
• 1:09:54
  Speaker 1: as I can for my organization. So that's how I like.
• 1:09:57
  Speaker 1: That's the fundamental level that which I understand my relationship
• 1:10:01
  Speaker 1: with The New York Times. I get paid to do
• 1:10:03
  Speaker 1: a job. You said, like I you know, a lot
• 1:10:06
  Speaker 1: of people see it as a life on career. I don't.
• 1:10:08
  Speaker 1: I won't necessarily accept that as a as uh as
• 1:10:13
  Speaker 1: the way I think about my time at the times,
• 1:10:15
  Speaker 1: I'm super grateful I've been here for nine years. I'm
• 1:10:18
  Speaker 1: in no rush to leave. I have no plans to leave.
• 1:10:20
  Speaker 1: But I also don't necessarily think it's the only job
• 1:10:22
  Speaker 1: I'll ever have in my life. I think as some
• 1:10:24
  Speaker 1: people might feel that way, sure, but it's not necessarily
• 1:10:27
  Speaker 1: how I think about it. In terms of interpersonal dynamics,
• 1:10:31
  Speaker 1: I don't think it's different than any other organization. If
• 1:10:34
  Speaker 1: you and I'm not speaking about any specific incident or
• 1:10:37
  Speaker 1: any of the ones you just mentioned, but if you
• 1:10:40
  Speaker 1: work at PepsiCo and you publicly are talking shit about
• 1:10:48
  Speaker 1: your colleagues or probably be repercussions if you're on a
• 1:10:52
  Speaker 1: sports team and you go to the press conference after
• 1:10:56
  Speaker 1: a loss and say, you know, like you know, if
• 1:10:58
  Speaker 1: you're Katie and Katie is like Kyrie was a piece
• 1:11:00
  Speaker 1: of ship, like he's you know, such and such and
• 1:11:02
  Speaker 1: such and such and goes off on your teammate, there
• 1:11:06
  Speaker 1: might be consequences. So the do It's no doubt about it.
• 1:11:11
  Speaker 1: Institutions like the New York Times get a huge amount
• 1:11:13
  Speaker 1: of scrutiny, But I don't necessarily believe that there is
• 1:11:17
  Speaker 1: a you know something some like weird magic sauce about
• 1:11:22
  Speaker 1: the a newspapers culture um in terms of can I
• 1:11:28
  Speaker 1: feel like, of course, you know, like when when big
• 1:11:31
  Speaker 1: things royal and organization, the individuals of that organization, whether
• 1:11:36
  Speaker 1: there or not, they're directly a part of it, They
• 1:11:38
  Speaker 1: notice it, they feel it. And so again I what
• 1:11:43
  Speaker 1: I alluded to earlier when we talked about the new
• 1:11:45
  Speaker 1: executive editor Pertains here too write like things are pretty
• 1:11:49
  Speaker 1: calm at the New York Times right now, internally, at
• 1:11:53
  Speaker 1: least for me at least what I'm seeing and for
• 1:11:55
  Speaker 1: the most part, that's good, and I think it's reflective
• 1:11:58
  Speaker 1: of a healthy culture where reporters by and large are
• 1:12:02
  Speaker 1: focused on doing the work, which is what they pay
• 1:12:04
  Speaker 1: us for. Okay, you beat recently changed to the climate.
• 1:12:09
  Speaker 1: How did that happen? I won't borroy you with the
• 1:12:12
  Speaker 1: whole way it happened, but what I'll say is that
• 1:12:14
  Speaker 1: I have been on the business desk for the better
• 1:12:17
  Speaker 1: part of nine years at the paper, and I've done
• 1:12:20
  Speaker 1: all sorts of different things than the business desk. And
• 1:12:24
  Speaker 1: I was at a place and the paper was at
• 1:12:26
  Speaker 1: a place where we realized there was the opportunity for
• 1:12:30
  Speaker 1: me to do uh, sort of refocus my energies, and
• 1:12:35
  Speaker 1: the way to do that while capitalizing on all my
• 1:12:39
  Speaker 1: experience reporting on business, all my connections in the business
• 1:12:43
  Speaker 1: world and get me focused on the topic I'm really
• 1:12:46
  Speaker 1: excited about, was to essentially move me from the business
• 1:12:51
  Speaker 1: desk to the climate desk. But I'm still I'm still
• 1:12:53
  Speaker 1: writing about business, so my focus is on the intersection
• 1:12:57
  Speaker 1: of the business world and public see and that's a
• 1:13:00
  Speaker 1: that's a big overlap. But I'm still very much reporting
• 1:13:04
  Speaker 1: on the business world, um, though very much through the
• 1:13:07
  Speaker 1: lions of climate change and particularly the energy transition. Okay,
• 1:13:13
  Speaker 1: so what's going on? Give us a snapshot. Well, the
• 1:13:17
  Speaker 1: humanity has been burning fossil fuels relentlessly for the past
• 1:13:24
  Speaker 1: fifty years, depending when you start counting it, and it's
• 1:13:27
  Speaker 1: dramatically changed the climate of the Earth in ways that
• 1:13:32
  Speaker 1: are creating exponentially more destructive and severe weather events, and
• 1:13:41
  Speaker 1: that are starting to affect and endanger and jeopardize not
• 1:13:45
  Speaker 1: only you know, many millions of humans, um, but many
• 1:13:49
  Speaker 1: other parts of the ecosystem as well. And while there
• 1:13:52
  Speaker 1: has been decades of scientific consensus UH making clear the
• 1:13:59
  Speaker 1: impair wative to stop burning fossil fuels, we as a
• 1:14:02
  Speaker 1: human society have not done a very good job following
• 1:14:05
  Speaker 1: the advice of our scientists, and on balance, we are
• 1:14:08
  Speaker 1: still headed in the wrong direction. Needles say, there's two
• 1:14:12
  Speaker 1: sides here. There's climate deniers their corporations that have an
• 1:14:17
  Speaker 1: investment in burning UH fossil fuels. So to what degree
• 1:14:22
  Speaker 1: do you feel you're preaching to the converted? How do
• 1:14:24
  Speaker 1: you penetrate the minds of people who could make better decisions,
• 1:14:30
  Speaker 1: whether to be corporations or people who believe otherwise? Yeah,
• 1:14:34
  Speaker 1: I don't, I don't, Again, Bob, I don't see that
• 1:14:36
  Speaker 1: as my job, right, Like, my mandate isn't to convert people. Um.
• 1:14:42
  Speaker 1: My mandate is to report on what's happening and be
• 1:14:45
  Speaker 1: as accurate as possible and try to find stories that
• 1:14:49
  Speaker 1: help explain how we got here and where we're going.
• 1:14:53
  Speaker 1: So I'm not in the business of of converting people. Um.
• 1:14:58
  Speaker 1: You know, if that happens along the way, and and
• 1:15:00
  Speaker 1: people who previously didn't believe in science believe in science
• 1:15:03
  Speaker 1: as a result of my reporting, great, but that's that's
• 1:15:06
  Speaker 1: not my remit. Okay, we're just getting a little deeper
• 1:15:10
  Speaker 1: into the fact. We have the Supreme Court decision that
• 1:15:13
  Speaker 1: ultimately neuter the e p A to a great degree.
• 1:15:18
  Speaker 1: What's the landscape going forward? Well, I would, I would,
• 1:15:23
  Speaker 1: I would dispute your characterization of that ruling of West Virginia. Uh.
• 1:15:29
  Speaker 1: By all accounts it was it was not great for
• 1:15:33
  Speaker 1: the power of the e p A to regulate the
• 1:15:36
  Speaker 1: emissions of power plants in general, but it was not
• 1:15:40
  Speaker 1: nearly as expansive of a ruling as some climate advocates feared. Um,
• 1:15:48
  Speaker 1: So the e p A still does the have the
• 1:15:51
  Speaker 1: ability to in to regulate the emissions of individual power plants.
• 1:15:55
  Speaker 1: But but it makes it more complicated to regulate them
• 1:15:58
  Speaker 1: as a group. All that is a roundabout way of
• 1:16:02
  Speaker 1: saying that the Supreme Court is uh, well, the Supreme
• 1:16:08
  Speaker 1: Court is and this decision is one of the ways
• 1:16:11
  Speaker 1: in which the Biden administration has been essentially losing the
• 1:16:15
  Speaker 1: tools it has as its disposal to reduce overall emissions
• 1:16:20
  Speaker 1: in the United States, and the inability to pass Build
• 1:16:24
  Speaker 1: Back Better was one of those. There are other issues
• 1:16:27
  Speaker 1: going on that my my colleague Coral Davenport has reported
• 1:16:30
  Speaker 1: on in depth. But the upshot is we as a
• 1:16:35
  Speaker 1: nation and it's largely a result of the hyperpartisanship and
• 1:16:39
  Speaker 1: as you said, a pretty clear partisan rift between how
• 1:16:45
  Speaker 1: the different parties are approaching climate and energy issues. UM
• 1:16:49
  Speaker 1: are not moving very quickly to reduce the United States
• 1:16:53
  Speaker 1: is greenhouse gas emissions. And if one wanted to reduce those,
• 1:17:00
  Speaker 1: we're the opportunities, well, there are many and I want
• 1:17:03
  Speaker 1: to be careful here because I am not an expert, UM,
• 1:17:06
  Speaker 1: but the Buildback Better plan and the reconciliation package that
• 1:17:10
  Speaker 1: was on the table and that was essentially killed by
• 1:17:13
  Speaker 1: Senator Mansion, who of course is from West Virginia and
• 1:17:16
  Speaker 1: has business interests tied to the coal industry. Uh. That bill,
• 1:17:21
  Speaker 1: that that package would have uh advocated huge sums of
• 1:17:27
  Speaker 1: money towards essentially transitioning power generation in the United States
• 1:17:32
  Speaker 1: to renewable energy. And that's that. That is not necessarily
• 1:17:37
  Speaker 1: the number one way to reduce emissions, but it's one
• 1:17:40
  Speaker 1: of the biggest, right, Like, let's stop using We don't
• 1:17:43
  Speaker 1: use a whole lot of coal in this country anymore, um,
• 1:17:46
  Speaker 1: but let's stop using natural gas. Uh. Let's for power generation.
• 1:17:52
  Speaker 1: Let's stop using coal wherever it is still used. Uh.
• 1:17:56
  Speaker 1: And let's start using more oil. Excuse me, more solar,
• 1:18:01
  Speaker 1: more wind, uh, and more hydro electricity. These are renewable
• 1:18:04
  Speaker 1: sources of energy that do not create new emissions. Okay,
• 1:18:09
  Speaker 1: just on a very practical matter. You know, we've had COVID.
• 1:18:12
  Speaker 1: Everything's a little bit crazy. Maybe we should go before that,
• 1:18:16
  Speaker 1: to what degree do you go into the office every day?
• 1:18:21
  Speaker 1: To what degree do you choose your own topics? Are
• 1:18:25
  Speaker 1: they assigned? Do you write stuff specifically be printed? Do
• 1:18:30
  Speaker 1: you write stuff? And they rejected? What's the whole process
• 1:18:33
  Speaker 1: of the mechanics there? Well, I've been in the office
• 1:18:37
  Speaker 1: more than most for the last year and a half
• 1:18:39
  Speaker 1: or so I like the office, I like my desk,
• 1:18:41
  Speaker 1: I like seeing people and talking to people. Um. But
• 1:18:44
  Speaker 1: it's also the case that not I'm one of I'm
• 1:18:48
  Speaker 1: in the minority still And so have you had COVID? Yes,
• 1:18:53
  Speaker 1: I've had COVID twice as a matter of fact. Um uh.
• 1:18:58
  Speaker 1: And I'm fortunate to still be said in here and
• 1:19:00
  Speaker 1: and to not have any severe lasting impacts at least
• 1:19:04
  Speaker 1: that I'm aware of right now, maybe in my brain. Um.
• 1:19:08
  Speaker 1: But listen. As for the reporting process, um, it's a
• 1:19:11
  Speaker 1: mix of writing stories that the editors have asked for
• 1:19:16
  Speaker 1: and then working with them to identify targets that again
• 1:19:21
  Speaker 1: sort of help us continue our mission of trying to
• 1:19:26
  Speaker 1: write fact based stories that that helped explain where the climate,
• 1:19:31
  Speaker 1: the situation is and what's what's to come. So I
• 1:19:34
  Speaker 1: would say, on balance, you know, since I joined the
• 1:19:37
  Speaker 1: Climate desk, most of my sort of biggest marquee pieces,
• 1:19:43
  Speaker 1: you know, big investigative features those kind of things, have
• 1:19:46
  Speaker 1: been ones I've come up with myself. I've got a
• 1:19:48
  Speaker 1: good line of reporting I'm excited about, which was uh,
• 1:19:53
  Speaker 1: you know, probably myself and another reporter sort of stumbled
• 1:19:56
  Speaker 1: across some stuff, and I'm I'm picking it up and
• 1:19:58
  Speaker 1: running with it. But it's all is the case. I
• 1:20:00
  Speaker 1: wrote a news analysis story on Friday after the West
• 1:20:04
  Speaker 1: Virginia ruling that was very much something the editors wanted
• 1:20:07
  Speaker 1: to see and it was their idea. And I'm like,
• 1:20:08
  Speaker 1: that's a good idea. I can turn that around in
• 1:20:10
  Speaker 1: a day or so. And there wasn't the paper. Let's
• 1:20:20
  Speaker 1: go back to the book. There was a review in
• 1:20:24
  Speaker 1: the New York Times book review by Curdie Anderson which
• 1:20:28
  Speaker 1: was more than relatively negative. Now the caveat here is
• 1:20:35
  Speaker 1: he wrote a book which I would not call identical,
• 1:20:37
  Speaker 1: but many people feel covered a similar subject. How do
• 1:20:41
  Speaker 1: you feel about all that. I didn't write my book
• 1:20:46
  Speaker 1: for book reviewers. Uh, And so I'll just leave it there.
• 1:20:50
  Speaker 1: Let me put it in in a different way. The nature
• 1:20:53
  Speaker 1: of being in the public eye is you get a
• 1:20:57
  Speaker 1: lot of feedback. There are people who attack you just
• 1:21:00
  Speaker 1: to attack you. So now that your level has been raised,
• 1:21:04
  Speaker 1: your profile has been raised, what's that been like for you.
• 1:21:08
  Speaker 1: I've been surprised how few people have really come at
• 1:21:12
  Speaker 1: me and tried to argue with the premise of the book. Right,
• 1:21:15
  Speaker 1: I make a make a pretty clear Uh, rhetorical argument
• 1:21:21
  Speaker 1: in this book, which is that Jack o Elch bears
• 1:21:24
  Speaker 1: singular responsibility for a lot of the problems we have
• 1:21:27
  Speaker 1: in our society. Um. I have yet to see someone
• 1:21:30
  Speaker 1: sort of take the other side of that debate in
• 1:21:33
  Speaker 1: a really forceful way. Um ah. And that to me
• 1:21:39
  Speaker 1: has been surprising. Even when Jeff you know, Jack's successor,
• 1:21:42
  Speaker 1: came after me on LinkedIn, it was in this sort
• 1:21:45
  Speaker 1: of limp way of saying, like Jack was actually a
• 1:21:47
  Speaker 1: good manager, all right, Like no effort to to dispute
• 1:21:52
  Speaker 1: the actual merits of my argument, okay, And that to me, Um,
• 1:21:57
  Speaker 1: you know, I'm not saying I'm entirely right. I mean,
• 1:22:01
  Speaker 1: I believe in my thesis. But but this is a
• 1:22:03
  Speaker 1: book that was meant to start a conversation. And what
• 1:22:06
  Speaker 1: I've been really gratified by is the fact that people
• 1:22:09
  Speaker 1: want to have this conversation. And certainly not everyone agrees
• 1:22:12
  Speaker 1: with me. Um. But what you said, honestly about what
• 1:22:16
  Speaker 1: you said in in your newsletter is one of my
• 1:22:19
  Speaker 1: favorite things. And it's a quote I'm using and I'm
• 1:22:22
  Speaker 1: telling my marketing people to use. You said if everyone
• 1:22:24
  Speaker 1: in America read this book, there would be a revolution.
• 1:22:27
  Speaker 1: And I was God, God, damn, that's right, right, that's
• 1:22:29
  Speaker 1: actually that was the intent. That was the spirit I
• 1:22:33
  Speaker 1: was trying to provoke with this book. And the fact
• 1:22:36
  Speaker 1: that you and others have responded to it to me,
• 1:22:39
  Speaker 1: UM suggests that at least you know, that effort to
• 1:22:43
  Speaker 1: spark a conversation, to get us talking about these big
• 1:22:46
  Speaker 1: issues and how we can live in a in a
• 1:22:49
  Speaker 1: society that works for more people. Um, was was at
• 1:22:52
  Speaker 1: least somewhat successful. And commercially is the book met your expectations?
• 1:22:58
  Speaker 1: Exceeded them? Disappoint did you? Yeah? Exceeded? Uh? It was
• 1:23:02
  Speaker 1: a hit, um. And I I was a nervous author
• 1:23:06
  Speaker 1: right the the in the days and months and weeks
• 1:23:11
  Speaker 1: before we knew how this book was doing, and I
• 1:23:14
  Speaker 1: was haveing, I was deeply nervous. But listen. It debuted
• 1:23:18
  Speaker 1: on the New York Times bestseller List, It was on
• 1:23:19
  Speaker 1: the Wall Street Journal best seller list. It hit number
• 1:23:22
  Speaker 1: twenty eight in all books on Amazon. Uh. It's gotten
• 1:23:26
  Speaker 1: a huge amount of press coverage. UM. I will note
• 1:23:30
  Speaker 1: almost all of it favorable, with a few notable exceptions
• 1:23:34
  Speaker 1: which I can take my lumps on and keep keep
• 1:23:37
  Speaker 1: marching forward. And uh and yeah, and like people are
• 1:23:42
  Speaker 1: talking about this, and that that to me was like,
• 1:23:45
  Speaker 1: if people want to talk about this, and if it
• 1:23:47
  Speaker 1: gets if it fires people up, you know, whether they
• 1:23:50
  Speaker 1: get piste off about it or not, I'm fine, Um,
• 1:23:53
  Speaker 1: as long as they're sort of having the argument in
• 1:23:55
  Speaker 1: good faith. Uh, that's gravy to me. I hope people
• 1:23:59
  Speaker 1: just agree with it, right, Like, if if it's not Jack,
• 1:24:03
  Speaker 1: tell me who it is, Tell me how we got here?
• 1:24:05
  Speaker 1: Tell me what's wrong with our society that this? You know,
• 1:24:09
  Speaker 1: CEO has makes six times with the medium employee works
• 1:24:14
  Speaker 1: makes and and then it takes like three jobs for
• 1:24:17
  Speaker 1: a low income family to keep food on the table, right, Like,
• 1:24:22
  Speaker 1: how did we get here in the world today? There's
• 1:24:24
  Speaker 1: so many messages. You've had a successful book, What is
• 1:24:29
  Speaker 1: the key to getting the message out? I had a
• 1:24:33
  Speaker 1: great team. I'm not I'm not b S and you.
• 1:24:35
  Speaker 1: I have good marketing people at Simon and Schuster who
• 1:24:38
  Speaker 1: who did humans work? Um? And I was very engaged
• 1:24:43
  Speaker 1: in it as well. I tried real hard to get
• 1:24:45
  Speaker 1: people to buy this book. I didn't just write it. UM.
• 1:24:49
  Speaker 1: So there's some hustle involved, for sure, But I think
• 1:24:52
  Speaker 1: at the end of the day, you have to have
• 1:24:54
  Speaker 1: a really crystalline idea that people want to talk about,
• 1:24:58
  Speaker 1: and and I was I did know if this was
• 1:25:00
  Speaker 1: going to be one of those, but but clearly it
• 1:25:02
  Speaker 1: has been, and it's it's helped me, you know, if
• 1:25:06
  Speaker 1: I if I ever write another book, I think I've
• 1:25:08
  Speaker 1: learned things through this process that have really made me
• 1:25:10
  Speaker 1: realize what what what some of these successful elements of
• 1:25:14
  Speaker 1: a book launch would be. And I think number one
• 1:25:17
  Speaker 1: is like, can you can you stay in a sentence
• 1:25:20
  Speaker 1: what your idea is and does that sentence want to
• 1:25:23
  Speaker 1: make people keep talking? Okay? In the actual process of
• 1:25:27
  Speaker 1: writing the book, did you take time off from the
• 1:25:31
  Speaker 1: times you write in your spirit time? How did you
• 1:25:33
  Speaker 1: do it? I didn't take time off. I did in
• 1:25:35
  Speaker 1: my spare time. It was incredibly incredibly quick process. UM.
• 1:25:39
  Speaker 1: I had the idea for the book in April of so,
• 1:25:43
  Speaker 1: just over two years ago. I wrote the proposal UM
• 1:25:47
  Speaker 1: in August of so, less than two years ago. I
• 1:25:51
  Speaker 1: didn't sign a contract until October November, so now we're
• 1:25:56
  Speaker 1: talking like eighteen months ago. And then I crashed this
• 1:26:00
  Speaker 1: thing in a in a year or so, which is
• 1:26:03
  Speaker 1: an absurd timeline for a book. Uh So, I my
• 1:26:08
  Speaker 1: wife gets lots of thanks for bearing with mean and
• 1:26:11
  Speaker 1: helping take care of our kids. Well, I spent time
• 1:26:15
  Speaker 1: writing this book. Well, thanks for taking the time to
• 1:26:18
  Speaker 1: talk to us here, David. Really fascinating. I'm sure everybody
• 1:26:22
  Speaker 1: will be stimulated. I've already gotten a ton of email
• 1:26:25
  Speaker 1: people bought and read the book. I'm sure now even
• 1:26:27
  Speaker 1: more people will. So thanks for writing the book. Because
• 1:26:31
  Speaker 1: someone had to write the truth. That's why I had
• 1:26:32
  Speaker 1: to get it immediately said, someone is speaking the truth
• 1:26:36
  Speaker 1: about Jack Welch, which was sitting there in plain sight.
• 1:26:41
  Speaker 1: So in any event, thanks so much for taking the time.
• 1:26:44
  Speaker 1: Thank you so much, Bob, and you you literally gave
• 1:26:47
  Speaker 1: me my favorite quote, my favorite blurb of this whole cycle,
• 1:26:51
  Speaker 1: and I'll never forget it. Wow, that's great. Until next time.
• 1:26:55
  Speaker 1: This is Bob Lefts