General Electric’s Turn from Jack Welch to Jeff Immelt
In 2001 Jack Welch, hailed as “manager of the 20th century,” handed the GE CEO role to Jeff Immelt just days before the 9/11 attacks. During Welch’s tenure GE’s market value had soared above $400 billion; under Immelt, the stock fell about 30% and more than $150 billion in market cap was lost, amid strategic missteps and heavy exposure to GE Capital during the 2008 financial crisis.
Initially, Immelt enjoyed the halo of Welch’s legacy, but post‑bubble and post‑9/11 conditions quickly eroded performance and investor confidence.
GE’s decline, including its removal from the Dow and breakup of major units, led some analysts to argue that Welch’s conglomerate model and capital‑allocation choices had sown seeds of later trouble, illustrating the risks when a successor inherits an admired but fragile structure.
GE’s experience is a cautionary parallel: even a well‑telegraphed succession can fail if the underlying business model or capital allocation proves unsuited to new conditions. Berkshire’s breadth and cash hoard resemble GE’s at its peak, making disciplined strategy under Abel — and the design of post‑Buffett governance and investing processes — critical.