BOSTON (Reuters) - Jeff Immelt has been fixing businesses since his first big job — when the then-president of General Electric Co’s appliance unit spent weekends crawling on customers’ floors to help repair refrigerators.
That convinced Immelt, the 53-year-old chief executive of the biggest U.S. conglomerate, that he “was the worst screwdriver guy in the history of the company.”
But it set the stage for a career in which he has been repeatedly called on to rework troubled GE operations, according to “Jeff Immelt and The New GE Way,” by David Magee (McGraw Hill, $25.95).
The book follows Immelt, the son of a lifetime GE employee, from his first job — a brief stint at Procter & Gamble Co where shared an office with now Microsoft Corp CEO Steve Ballmer — through the October 2008 early morning phone call when he persuaded a bathrobe-clad Warren Buffett to invest $3 billion of Berkshire Hathaway’s money in GE.
It comes at the end of a brutal year for GE shareholders. The global financial crisis has pounded the company’s hefty finance arm, briefly in March driving GE’s share price below $6 — an 85 percent drop from their value before Immelt took the reins from Jack Welch in September 2001.
The worst financial crisis in decades has given Immelt the chance to emerge fully from the shadow of his famous predecessor, who was a darling of Wall Street in the 1990s, Magee said.
“He had that shadow over him,” Magee said in a phone interview. “All of a sudden you’re not hearing so much about Jack Welch and everybody is turning their attention to find out, ‘What do we have here? Let’s look at this plan, let’s look at how this company is being reshaped for the long term and the future.’”
Immelt has remade the world’s largest maker of jet engines and electricity-producing turbines into a company that is focused on sniffing out new business opportunities and finding new growth markets, Magee writes. Along the way, he has adopted a different management style, including putting aside some of Welch’s famous rules — such as the desire to be No. 1 or No. 2 in a business or to exit it.
The book also shows Immelt as an executive who is capable of changing his opinion as situations change.
When the idea of GE getting into the wind business was first pitched in 2001, Immelt dismissed it as a “hula hoop,” requiring a high investment with little payoff, Magee wrote.
Just three years later, Immelt gathered his top lieutenants to inform them of “Ecomagination,” a new push into green business.
The book’s final chapters watch Immelt and GE’s top executives navigate the financial market turmoil of the second half of 2008, showing Chief Financial Officer Keith Sherin and Immelt discussing whether to register GE Capital as a bank holding company — a shift they ultimately decided against.
One telling quote about GE’s management style comes from John Rice, a GE vice chairman who runs the company’s technology infrastructure arm.
“If you are off your numbers but doing a really good job running the company in a lousy market you should not have to worry,” Magee quotes Rice as saying.
The thing that gets Immelt most emotional is GE’s beaten-down stock price, Magee said. GE shares — which investors long considered a defensive investment due to the diversity of the company’s operations and its geographic reach — have sharply underperformed the broader market over the past year.
“It frustrates me,” Magee quotes Immelt as saying. “It makes me angry, but you have to step back.”
Reporting by Scott Malone; Editing by Eddie Evans