Look what Jack Welch left GE

[still_one]

JACK WELCH, GENERAL ELECTRIC'S DEMANDING former chief executive, delighted in setting the bar high. When he stepped down a few days before Sept. 11, 2001, he left his successor, Jeffrey Immelt, the challenge of matching a remarkable string of years of strong profit growth.

What was most remarkable about those years, however, wasn't apparent to anyone outside the company until recently. The bar might have been set artificially high.

During the last five years of the Welch era, ended in 2001, GE's reported earnings jumped from 72 cents a share to $1.37, a rise of 65 cents a share, or 90.2% -- spectacular for a behemoth like GE. But without a massive under-reserving at its reinsurance unit, the company would have shown a cumulative earnings gain of just four cents, or 5.6%.

The under-reserving is expected to be completely corrected early next year, clearing the way for the unit's sale to Swiss Re. By the time that occurs, General Electric (ticker: GE) will have pumped in $9.4 billion in pretax dollars since 2001 to raise the reserves to an adequate level. When taxes are taken into consideration, the tab will come to $6.1 billion, or about 61 cents a share. And 61 cents would have all but torched the 65 cents of earnings gains in Welch's last five years.



http://online.barrons.com/article/SB113538495855331017.html?mod=9_0030_b_this_weeks_magazine_main

[kevinmc]

1. I Worked at GE.......

and I left in Oct. 2001. I was there the whole time Welch was there and I knew they played with numbers. Another thing GE is BS'en is that "Six Sigma" mantra they spout.

[still_one]

3. and I know there is more than GE who played games with numbers

so what is the value of a company if you don't know what their earnings represent

[Old and In the Way]

2. The G W Bush of manufacturing Corporations.

He's driven the business logic of many, many US corporations. He has disciples all over the business world. I worked for a couple of companies who's management trained under Jack....real short termers in their business models. If you can't get an ROI in 6 months, outsource it.

[still_one]

4. That is one of the reason our trade deficiet is so large

and we are told it doesn't matter

[ChairmanAgnostic]

5. heh heh heh

I was a service provider for their financial end -
meaning, I sold my soul and represented their clients in litigation.
The financial arm had several insurance cos. which had to dance an incredible dance of tap, clap, trap and crap.

The orders one had to follow, (to support the Re-Ins numbers) were so bad that I left that entire side of the profession. I have never been happier. Those that scrambled to grab my share of the biz - ah. Little did they know.

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