Jack Welch became one of corporate America’s most celebrated leaders for transforming General Electric from a solid, if bureaucratic, company to an entrepreneurial giant during his long tenure as chief executive.
Now, Mr Welch, known as “neutron Jack” for the widespread job cuts at GE, may be poised to attempt an even greater management feat: publishing a newspaper.
This week, it was revealed that Mr Welch and fellow Boston native Jack Connors, an advertising executive, had held discussions about launching a bid for The Boston Globe, aiming to return the struggling paper to local ownership. The retired executives are reaching out to other civic-minded Boston-ians for a possible effort
to prise the daily away from the New York Times Company, which bought it in 1993 for $1.1bn.
The prospect of Mr Welch’s managerial prowess being applied to a newspaper that is bleeding readers and advertisers may be tantalising to some. But the question many are asking in Boston is whether Mr Welch’s skills would be suited for the newsroom of one of the US’s most prestigious papers – where results are not measured purely in profits.
“It, possibly, is a good thing,” said Louis Ureneck, chairman of the journalism department at Boston University. “But we really need to know more.”
Chiefly, Mr Ureneck and others are wondering what Mr Welch’s financial expectations would be for the Globe. Would he and his partners be running the paper to maximise their return on investment, for example, or more as a matter of civic duty?
“Tying promotions and incentives to performance is good, but should we have an annual culling of the [under-performers] in the editorial department?” one Globe reporter wondered, referring to Mr Welch’s practice at General Electric of removing the bottom 10 per cent of employees each year.
Another matter was whether a group of prominent investors – people who regularly appear in the Globe’s pages – would respect the independence of the newsroom. Mr Welch himself became the subject of nasty headlines a few years ago after a bitter divorce fight led to the airing of his generous GE retirement package.
Similar questions are surfacing at other US cities as deep-pocketed local figures increasingly put themselves forward as potential saviours for their hometown newspapers. Three wealthy Angelenos – David Geffen, Ron Burkle and Eli Broad – have expressed interest in buying the Los Angeles Times from Tribune. Newspapers in New York, Baltimore and Hartford have also drawn suitors.
These efforts are all predicated on the notion that local owners are more in touch with their community than distant corporations. Furthermore, at a time when newspapers are struggling to adapt to the internet and other challenges, they would be willing to settle for lower returns than Wall Street fund managers.
A person familiar with Mr Connors’s plans said he believed any investment would be more civic-minded than financially motivated. Yet he noted that discussions were preliminary.
Still, one Boston media executive was sceptical. “These are guys who have a somewhat romantic vision of what running a newspaper means. They remember the good old days of newspapers and they have a dream of owning their hometown paper,” he said. “But the reality is going to hit them when they look at the numbers and drill into the business and realise that they are going to have to make some severe cuts and go head to head with unions.”
Those realisations seem to be dawning on Brian Tierney, a public relations executive who assembled a team that bought The Philadelphia Inquirer earlier this year. In spite of early optimism, Mr Tierney last week sent a memo to staff warning about cash flow problems and future job losses.
Mr Welch is no stranger to the media business. During his tenure at GE, it acquired NBC, one of the largest US broadcast networks. Mr Welch made deep cuts to the news division, and some former executives say he meddled with their coverage. Lawrence Grossman, former president of NBC News, claimed Mr Welch ordered him to tone down reporting on the Black Monday stock market crash in 1987.
“There was a big culture clash for the first few years,” said Tom Wolzien, a Wall Street analyst who spent 15 years at NBC.
In retirement, Mr Welch has crossed the editorial divide. Along with his wife, Suzy Welch, a former editor of Harvard Business Review, he now pens a regular column for Business Week magazine. While that experience may have enriched Mr Welch’s understanding of journalism, questions about his intentions linger.
“I don’t think he’s buying the Globe so his wife can be editor,” Mr Ureneck said. “But who knows?”