Jeff Immelt, head of General Electric Corporation, is getting the boot as head of the company. Travis Kalanick is being asked to step aside as head of Uber. The news came out the same day. Two kingpins of business being pushed aside almost simultaneously. The parallels are so delicious, I had to write about it.
Immelt is the Robert Redford of business executives. Perfect hair, Savile Row suit, London-made wingtips. If he wasn’t the head of GE for 16 years, he could at least play the role. He took over from Jack Welsh, the master earnings manipulator (Mr. 11% profit growth year after year) a couple days before September 11, 2001. I always felt Immelt personified GE beautifully – handsome on the outside, complex and conflicted on the inside. He should have been CEO in the 1980s and ‘90s, playing golf with Generals and Presidents, and then wheeling and dealing over cocktails at “The Club.”
But Immelt’s world changed radically after taking the job. The financial world lost respect for dishwashers and lightbulbs. Half of GE’s revenue came from GE Finance. After 2008, the financial folks lost respect for the financial folks. General Electric stock got stuck in the La Brea Tar Pits. Even today, after hundreds of plant closings, acquisitions, and selloffs, the company’s stock value is 27% less than when Immelt took over in 2001.
Ironically, Immelt announced that the company would sell the light bulb business last week—his last big announcement.
Thomas Edison, the founder of the company which would become GE, would have understood the personnel move. Crusty old Tom, inventor and entrepreneur, considered by his peers as one miserable SOB, probably would have kicked out smooth Jeff Immelt earlier than Nelson Peltz did, whose Trian Fund Management is GE’s Biggest stockholder.
On the miserable human being scale, Tom Edison and Travis Kalanick of Uber would have vied for top banana.
In nine years Kalanick has built Uber from a tiny startup to a household name. The value of a taxi medallion in New York City was $1 million in 2013. Today you would be hard pressed to get $200,000 for one. Uber is valued at $70 billion, with 40-year old Kalanick’s stake at $6.3 billion. He is mega rich and evidently almost universally despised by those who know him. He has built a “grasping” culture at Uber, but one that has worked brilliantly at empire building.
Jeffery Immelt, bred from corporate parents, graduate of Dartmouth, well spoken, beautifully coiffed, knows all the old corporate rules. He certainly has the patina of a gentleman. Travis Kalanick’s father sold newspaper advertising in L.A. and his mother, Bonnie Horowitz, taught him to be tough. He went to Cal Northridge with a total passion to make it BIG. He made it HUGE, but Travis just could not stop being Travis.
His undoing this past year stemmed from his desire to move past Google, Ford and Tesla and everybody else in autonomous cars. He moved much of the business to Pittsburgh and basically tried to buy the Robotics department at Carnegie Mellon University—cheaper than paying $15 billion for Mobileye like Intel just did. He looted the department by offering riches to the good geeks of Pittsburgh. Then he took the audacious gamble that Thomas Edison probably would have admired. He hired Google’s technical head of its autonomous car project Anthony Lewandowski to lead his headlong rush into robotic vehicles.
Google was not pleased. It sued Uber and Lewandowski and things started to fall apart for Kalanick. He also got nailed for not reining in the boorish, sexist behavior of Uber’s employees.
Travis needs some of Jeff Immelt’s adultness and Immelt probably wishes he had some of Kalanick’s brashness.
This weekend they both got pushed aside – not exactly fired – but the money guys on their respective boards told them they were no longer in charge.
It’s business. It ain’t Beanbag.
Question: Who would you rather have dinner with Jeff Immelt or Travis Kalanick?
10 Comments
Retiring after 16 years as CEO is not the same as getting the boot.
This is GE and Immelt putting a good face on it. Nelson Peltz is all about stock price and in that regard Immelt has to be regarded a failure. Would Warren Buffett have tolerated 16 years of depressed value for one of his big assets. The market hates conglomerates. If the aircraft engine division was spun off as a seperate company it would be extremely valuable. Evidently Immelt did not want to do it, but Flannery, his successor may now do it.
I would choose Kalanick to have dinner with. We could both wear funny hats. He may be a jerk, but he has built an amazing company in a few years. I’d also like him to show me how to use the App better.
Immelt would be interesting too. Maybe we could discuss fabrics.
Neither! I suspect the overwhelmingly well groomed Immelt would not go well with my
Kmart purchased blue jeans and sweatshirt, and talking with Kalanick would be like
conversing with another snowflake of the me-too generation. However, maybe either
or both would pick up the tab. How about both, at the same time, at Beef-A-Roo?
They could get to know each other.
I’d be more interested in what Travis Kalanick had to say about building a business but from what I’ve read about him I’d be fighting the urge to strangle him all during dinner. That would be distracting.
It is hard to take someone serious when they wear their hat like Travis.
That aside, I am sure I could use a few lessons about building a business from him.
Immelt is a manager more than an entrepreneur, which is the exact person I ran from when I started my company in 1990.
I will never have to recite the saying “we have done so much with so little for so long, we are currently qualified to do anything with nothing” again; Or at least I hope I don’t.
To call Knuckle Head Jack Welsh a corporate hero is just mental illness at it’s best. The only reason he could show any profit was his effort to sell off (like parting out an old Buick) manufacturing units. What a shame that these are gone. Many were profitable and the ones that were not, were the fault of management. I saw it first hand. I suffered the consequences of his efforts. Am I bitter, absolutely. My opinion of Welsh hasn’t changed in 40 years. I see his ads on TV that he and his young bride want to mentor struggling businesses. Who would want to hire the corporate wrecking ball!!!! He has no clue, none.
If you read the piece you would understand I was not lauding Jack Welsh. My reference was sarcastic. He manipulated earnings like a magician. With a vast portfolio like GE he had a lot of toys to play with.
No doubt that Jack Welsh was one smart cookie, but I think he gets way too many accolades for his tenure at GE. He was the head of one huge conglomerate at the right time that caught the big wave of expanding sales across the board. Yes, he was a big proponent of Six-Sigma quality initiatives, but I have subsequently read that after Welsh’s reign at GE many divisional managers debunked some of the ‘achievements’ attributed to Six-Sigma.
“It takes a thousand men to invent a telegraph, or a steam engine, or a phonograph, or a photograph, or a telephone or any other important thing—and the last man gets the credit and we forget the others. He added his little mite — that is all he did. These object lessons should teach us that ninety-nine parts of all things that proceed from the intellect are plagiarisms, pure and simple; and the lesson ought to make us modest. But nothing can do that.” – Mark Twain
There is a special place in my heart for Thomas Alva Edison, Perhaps the fact I graduated from Thomas Alva Edison High School here in New York.
My favorite contrast is between Thomas Alva Edison vs Albert Einstein.
Both has messy desks like me 🙂
As an inventor, Edison made 1,000 unsuccessful attempts at inventing the light bulb.
Einstein said Insanity is doing the same thing over and over again and expecting different results.
When a reporter asked, “How did it feel to fail 1,000 times?” Edison replied, “I didn’t fail 1,000 times. The light bulb was an invention with 1,000 steps.”
Edison put on public demonstrations where he electrocuted animals to show the dangers of alternating current. Perhaps he channeled the inner sadist in us, or created fear and respect as a “boss”
Or is it possible – that Edison honestly believed that AC was dangerous and honestly did not think it should be used? However most liberal narratives need a villain, right?
Some may question Edison’s business sense.
Edison worked on an iron ore project lost a ton of money, he sold most of his GE stock to fund it – it almost bankrupted him . when asked he said ‘Oh my God, we spent a fortune on that.’ He said, ‘we had fun spending it.’”
Was Edison that big of an SOB, or a tough Boss?
Realize BOSS spelled backwards is DOUBLE “S”, O, B!
Edison had Perseverance – keep going and never gave up.
Edison stated There is no and never will be any practical use for Alternating Current.
Without AC we would have no high voltage transmission or distribution.
Although new technology is changing this. look at the ultra high voltage DC transmission lines with VERY low losses.
Why must we vilify Edison?
Edison worked on X-rays, and pioneered much of today’s medical technology is based on his work.
During the x-ray experiments on Edison’s assistant and himself, both suffered and his assistant became disabled. In those times there were no pensions, benefits, welfare, social services, etc…
However, Edison kept him on the payroll and took care of all of his expenses until the day he died. In those days keeping employees on the payroll who couldn’t work, I’m sure, was not common practice. Had he worked for most others, he’d have ended his days a beggar in the streets.
As for dinner you can keep them both.
They both are Limousine Liberals, wielding their power from their Ivory towers, and claiming to be for the little guy. Look how they support President Obama and the almost president HiLlEry Diane Rodham Clinton.
It is ironic how so many praise Kalanick for providing so many with an opportunity to earn money flexibly via Uber, yet all of Kalanick’s profits are directed to driverless cars.
The ultimate automation of such a huge portion of the economy, talk of an evil boss.
Growing an empire upon the backs of hard working cab drivers only to leave them unemployed.
Edison did not do that!
If I had a time machine, I would go back to sit in a restaurant and watch the fights and arguments between Edison, Tesla, and Westinghouse. The endless debates of AC or DC.
That would be a dinner!!!