Narrator: In August 2018, an aging Jack Welch, once the most celebrated CEO in America, sat at the exclusive Nantucket Golf Club, a world he had helped create. He was frail, but his anger was sharp and undiminished. Looking back at the spectacular collapse of General Electric, the corporate titan he had built into the most valuable company on Earth, he didn't blame market forces or economic downturns. He blamed his own handpicked successor, Jeff Immelt. "I fucked up," Welch told author William Cohan, not about a business deal, but about his own legacy. How did this icon of American capitalism, a man who defined an era of corporate management, come to watch his life's work crumble, believing his greatest mistake was the very person he chose to carry his torch?

The answer lies within the pages of Power Failure: The Rise and Fall of General Electric by William D. Cohan. The book provides a sweeping, deeply researched account of a corporate giant, from its innovative origins to its mythic peak and its devastating decline. It’s a cautionary tale of hype, hubris, and the perilous consequences of believing in a flawed corporate mythology.

Narrator: While Thomas Edison is universally celebrated as the inventive genius behind General Electric, the company’s survival and early dominance owe just as much, if not more, to the shrewd business acumen of Charles Coffin. In the late 19th century, Edison was a brilliant inventor, creating the incandescent lamp and the Pearl Street Station, the world's first electrical grid. But his focus was on technology, not the complex machinery of business.

Meanwhile, in Lynn, Massachusetts, Charles Coffin, a former shoe manufacturer, had taken over a small electrical company called Thomson-Houston. Coffin was not an inventor; he was a strategist. He understood that to sell electricity, you first had to create a market for it. He pioneered a strategy known as vendor financing, providing capital to struggling local electric companies in exchange for them using his equipment. He aggressively acquired rivals to consolidate patents and expand market share. By 1891, Coffin’s Thomson-Houston was more profitable and efficiently run than Edison's larger company. When financial pressures forced a merger in 1892, it was Coffin, not Edison, who became the president of the newly formed General Electric. This established a foundational DNA at GE: technological innovation was vital, but financial and strategic management was king.

Narrator: In the 1950s, under CEO Ralph Cordiner, GE was a respected but bureaucratic behemoth. Cordiner sought to inject entrepreneurial energy into the company with a radical decentralization plan. He broke GE into over 100 small, independent "companies," empowering their general managers with immense autonomy and holding them accountable for their own profits and losses. His goal was to create "more risk and opportunity" and eliminate the complacency of a "good and complacent place to work."

However, this strategy had a dark, unintended consequence. The intense pressure to meet ever-increasing profit and market-share targets, coupled with the isolation of the new divisions, created a hothouse environment for unethical behavior. In the heavy-equipment division, a group of executives began engaging in a massive price-fixing conspiracy with competitors like Westinghouse and Allis-Chalmers. They rationalized their illegal collusion as necessary to stabilize a volatile market. One GE veteran explained the mindset, stating that while collusion was illegal, "it wasn’t unethical." This scandal revealed a deep-seated hypocrisy within GE: a company that publicly preached integrity while its internal culture of pressure drove managers to break the law.

Narrator: When Jack Welch took the helm in 1981, he inherited a strong but sluggish company. He immediately set out to revolutionize it with a simple, brutal philosophy: in every business GE operated, it had to be number one or number two in its market. If it wasn't, he would "fix, sell, or close" it. This led to a massive wave of restructuring and downsizing. In his first few years, Welch eliminated over 100,000 jobs, earning him the infamous nickname "Neutron Jack" because he left the buildings standing but removed the people.

Welch’s vision wasn't just about cutting; it was about reshaping. He orchestrated the audacious 1985 acquisition of RCA for $6.3 billion, primarily to get his hands on its television network, NBC. Welch saw NBC not just as a media asset, but as a "moat"—a cash-flow-rich business protected from foreign competition by U.S. law. This deal showcased his aggressive, deal-making style and his focus on acquiring businesses that could provide a steady stream of cash, a strategy that would become central to his reign.

Narrator: The true engine of the Welch era was GE Capital, the company's financial services arm. Initially a small division to help consumers finance appliance purchases, Welch and his lieutenants, like Gary Wendt, transformed it into a global financial powerhouse. Leveraging GE's pristine AAA credit rating, GE Capital could borrow money at incredibly low rates and lend it out for everything from commercial real estate to leveraged buyouts, generating enormous profits.

However, GE Capital also became what critics called a "black box." Its complex and opaque accounting allowed GE to "smooth" its earnings. If an industrial division had a bad quarter, GE Capital could sell an asset—a fleet of aircraft, a real estate portfolio—to generate a gain that would fill the gap, ensuring GE never missed Wall Street's quarterly earnings expectations. This practice created the illusion of impossibly consistent growth, turning Welch into a management deity. But it also made GE dangerously dependent on its financial arm and masked underlying weaknesses in its industrial businesses, a reality that would come back to haunt the company. The disastrous 1986 acquisition of the investment bank Kidder, Peabody, which was rife with scandal and cultural clashes, was an early warning sign of the risks involved in this financial empire-building.

Narrator: By the time Jack Welch retired in 2001, GE was the most valuable company in the world, and he was hailed as the "Manager of the Century." But the book argues that his legacy was a house of cards. He left his successor, Jeff Immelt, with an impossibly complex company that was dangerously over-leveraged in financial services. The very "black box" of GE Capital that had guaranteed Welch's success became a massive liability.

When the 2008 financial crisis hit, GE's reliance on short-term commercial paper for funding nearly brought the entire company to its knees. The myth of consistent, predictable growth was shattered. Immelt was forced to dismantle the empire Welch had built, selling off plastics, appliances, and large parts of GE Capital. The fall of GE wasn't simply the failure of one successor; it was the inevitable unwinding of a corporate mythology built on financial engineering and short-term results. Welch’s bitter regret in Nantucket was not just about Immelt; it was the lament of a man confronting the fact that the very system he created to ensure his legacy was the one that ultimately destroyed it.

Narrator: The single most important takeaway from Power Failure is that a corporate culture obsessed with meeting short-term financial targets at all costs is ultimately unsustainable. Jack Welch's GE became a master at the game of pleasing Wall Street, but in doing so, it created a complex, opaque, and fragile enterprise. The relentless pressure for smooth, predictable earnings growth led to a reliance on financial engineering that masked real-world risks and vulnerabilities.

The story of GE serves as a powerful warning about the limits of a flawed corporate mythology. It challenges us to question what defines true success. Is it a soaring stock price and a celebrated CEO, or is it the creation of a resilient, transparent, and enduring institution? GE's rise and fall forces us to consider the true, long-term price of chasing perfection.