The latest autopsy is from the editorial board at USA Today. Blame is placed on the cult of the CEO.
Both Jeff Immelt and the iconic Jeff Welch are vilified. They were able to use their power to make decisions which helped to weaken the corporation.
For example, the folks at USA Today contend Immelt made bad acquisitions, timed badly. Among them was power division of Alstom when utilities were shifting from coal to natural gas and renewables.
And Welch, to boost profits, shortchanged capital investments.
Where was the board of directors? Were they cowed by the cult of the celebrity CEO? Or did they just see profits increasing and not dig further into the financial condition of the corporation?
In addition, CNBC attacks current GE CEO John Flannery for a lack of vision and for sticking with incremental change. Yet, he's still there, on the job. Why?
But what receives less attention is the harm done to ordinary people and why that shouldn't have happened.
Only in passing in the media is it mentioned that there are those GE lifetime employees who can't retire or who are retired but need to unretire to hustle to earn income because the stock has dropped so significantly in value. Just since 2017, $150 billion has vanished in market value.
Those employees should have been aware of the investing fundamental of diversification. Never should they have purchased so much of their own company's stock. With so much information available about how to build a nest egg how did they wind up blowing their financial security? Were they old-line loyal to the corporation?
Also among those screwed, at least for now, are many property owners in the Connecticut suburbs. Now that GE is relocating to Boston from Fairfield, CT, the houses in that location and surrounding towns aren't selling. The money locked in the property was to be applied to dreams such as putting offspring through college and funding retirement.
Here is a typical tale of woe. A 60-year-old professional is stuck financially. His property's market value is about a million dollars. He still has a $250,000 mortgage. His plan was to sell it and relocate for semi-retirement after his child graduates from high school in 2019.
As the adage goes, man plans, the gods laugh.
Meanwhile, the annual property tax is over $20k. Why did he take the risk of buying such an expensive house? Why wasn't he more aware of the dramatic fluctuations in property values and spread the risk by investing more in other assets?
If he loses his good job because of age discrimination the whole house of cards could come down, literally. Ageism dominates, especially along the Northeast Corridor.
He's not alone, of course. The financial future of not only those associated directly and indirectly with GE is in play. So is it for myriad aging professionals who allowed themselves to become overextended. They could be one good job away from bankruptcy. Their "sin" will visit their children who then have to pile on the student college loans.
GE could become the symbol of reckless decision-making, both on the corporate and individual levels. The tragedy is almost Shakespearean. Too many constituencies were myopic simultaneously.
Let us not praise famous men and successful professionals.
Contact Jane Genova firstname.lastname@example.org.
“Over-50: Outsmarting Your Comfort Zone” https://over-50.typepad.com/over-50/2018/05/outsmarting-your-comfort-zone-free-book.html
“Over-50: The Four Monsters in the Mind” https://over-50.typepad.com/over-50/2018/04/ageism-bites-.html