Part 6/9:
The Consequences of Welch's Vision
While Welch's strategies generated enormous wealth for shareholders—if you had invested $10,000 in GE stock when he took over, it would have swelled to over $800,000—these profits came at a high cost. His management tactics led to a phenomenon often cited as the deterioration of the American middle class, as businesses increasingly relied on layoffs, outsourcing, and efforts to trim labor costs.
The fallout from Welch’s focus on financialization was starkly evident during the 2008 financial crisis, which ultimately uncovered the weaknesses in the models he championed. GE struggled under the weight of its own financial strategies as the economic landscape shifted dramatically.