You Don't Know Jack
and Robert Weissman
The clock is running out for Jack Welch, CEO of General Electric. It is also winding down for Don Morrison, a dairy farmer in upstate New York.
For two decades, Welch has led the one-time appliance company, transforming it into the world's most transnationalized conglomerate with a finance subsidiary as its profit center. The subject of almost unqualified adulation from the media and market analysts, he may end his tenure with a loud thud.
Scheduled to retire this year, Welch extended his reign by an additional year to oversee GE's gobbling up of Honeywell. European regulators are now raising serious concerns about the monopolistic effects of the deal, and appear poised to block it. Welch, who has made his reputation by pushing all cost-cutting and market-dominating measures to the extreme, may find that, in his final act, the law and society finally set some limits on him.
Don Morrison knows all too well the effect of Welch's hard-driving effort to cut expenses and externalize costs, and he hopes it is not only the European antitrust regulators who find the spine to stand up to Welch.
The U.S. Environmental Protection Agency (EPA) is expected in August to issue a final decision on whether it will dredge the Hudson River to clean up a GE-created PCB mess on the river bed -- at a cost of $460 million to GE.
Until 1976, a broad array of U.S. manufacturers used PCBs (polychlorinated
biphenyls) for insulation in electrical equipment. In 1976, Congress banned their manufacture and sale, following evidence that PCBs cause cancer and other harmful health effects. Since the banning, new evidence suggests PCBs also disrupt the endocrine system and lower intelligence levels of children exposed in the womb.
From the 1940s to 1976, GE dumped 1.3 million pounds of PCBs into the Hudson River, creating what is now the nation's largest Superfund site.
Don Morrison knows all about it. "Twenty-five years ago," he says, "the state dug sludge out of the river, and put it on land adjoining mine. I figured if they let them put it in the river, it can't be that bad. So it didn't bother me. É When they asked permission to push it [against my house], I said sure. My kids played in it, they grew up in it."
Don Morrison's wife died of colon cancer at the age of 49. "We can't prove it, but we believe that PCB had a tremendous amount to do with it." Now he lives in fear that his children will suffer from a similar fate.
Morrison and other survivors want GE at least to remedy the problem, 25 years after PCBs were outlawed in the United States.
In December 2000, EPA announced that it agreed, saying that after 16 years of studies, it had determined to clean up a 40-mile stretch of the Hudson. Under the Superfund law, GE would be liable for the costs of cleanup.
GE claims that it supports cleaning the river, and that it has acted responsibly to reduce its daily PCB pollution to three ounces. But it says dredging will stir up sediments and make the problem worse.
EPA retorts that the ongoing public health and environmental consequences of the PCB pollution are severe, with PCBs at river bottom continuing to enter the food chain. New technologies, agency experts say, address concerns about spreading contaminants by dredging.
But GE isn't just making arguments. In fine Jack Welch style, GE has pulled out all the stops to block the dredging plan. GE's Hudson River lobbying dream team includes former Senate Majority Leader George Mitchell and former House Appropriations Committee Chair Robert Livingston. Among other hardball tactics, the company deployed NBC President and GE Vice Chair Robert Wright to lobby New York City Council members against a bill endorsing the dredging project. (Think direct intervention from the head of a TV network, which owns a major station in New York, might give GE some leverage?)
GE certainly has lots of friends in the Bush administration, and in the Congress.
On the other hand, EPA chief Christine Todd Whitman endorsed the dredging when she was governor of New Jersey. And the Bush administration is under pressure not to announce any more environmentally stupid and harmful policy decisions with an obvious tilt to corporate interests. So the outcome of the final EPA decision remains very much in doubt.
The GE of Jack Welch has made its mark by pushing it workers, suppliers and the law to the limit, and often beyond.
But his strategies, though lavishly praised by Wall Street, are basically inhuman, as Don Morrison and many others can testify.
As Jack Welch's reign comes to an end, it is time for the society to say the clock has run out on Welch's model of comprehensive and global management by stress. The first way to deliver that message is for EPA to authorize the go-ahead of the Hudson dredging, without delay.
[For more on the GE-Hudson River issue, see www.cleanupge.org.]
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999).
(c) Russell Mokhiber and Robert Weissman