As with most things at GE, it was more complicated than it first appeared. When Immelt took over the Plastics operation, the previous management hadn’t been playing it straight. Under pressure from Welch, the division had stretched to make its numbers, including misreporting inventory figures to reduce the cost of goods sold. Fudging the numbers about the size of the inventory gave an artificial boost to the division’s earnings, making it appear to have made the numbers Welch demanded.
