Power Failure: The Rise and Fall of an American Icon

by William D. Cohan

A surprising number of close GE observers, both inside and outside the company, believed that Jeff should have used the time after the September 11 attacks to sit down with the research analysts on Wall Street who were covering the company and also with key GE shareholders and explain to them the world had changed. That GE had changed and the days of continuous double-digit sales and earnings quarterly growth were gone. That earnings growth was likely to become more episodic and less predictable. He could have explained that he was not Jack Welch. He was not the CEO of the Century. It was time for Jeff to “reset” expectations about GE’s earnings and GE’s stock. He could have put an end to Jack’s practice of managing earnings, taking any write-downs that needed to be taken, and he could have begun to defuse the ticking time bombs tucked away in the recesses of GE’s balance sheet. He could have told Wall Street that it was no longer reasonable for GE to have the astronomical price-to-earnings multiple that it had under Jack, often approaching fifty times