Greening of the GE Giant
WHAT HE DOES
As the man in charge of the world's second-largest company by market value, Jeff Immelt is tasked with continuing the impressive profit growth his idolized predecessor, Jack Welch, brought to General Electric.
WHAT HE'S KNOWN FOR
Immelt has long lived in Welch's shadow. During Welch's two-decade reign, he increased the company's market value by $400 billion, giving shareholders an average annual return of 23 percent.
While Immelt has delivered similar earnings growth, some investors doubt he'll be able to increase-or even maintain-G.E.'s profit growth. The company's stock price didn't change much between 2001 (when Welch stepped down) and early 2007. Standard & Poor's 500-stock index, meanwhile, rose about 30 percent during that period.
One bright spot of Immelt's tenure is the attention he has received for leading the greening of G.E. His "Ecomagination" initiative aims to reduce the company's emissions of greenhouse gases and double its spending on research and development for environmentally friendly technology by 2010.
WHERE HE'S FROM
The son of a schoolteacher and a former G.E. employee, Immelt was born in Cincinnati. He earned a degree in applied mathematics from Dartmouth College in 1978. He served as president of his fraternity and played on the football team. Classmates later told BusinessWeek that the 6-foot-4, charismatic Immelt was a natural-born leader.
After graduation, he returned home to work for Procter & Gamble and ended up sharing an office with future Microsoft C.E.O. Steve Ballmer. Immelt received an M.B.A. from Harvard Business School in 1982. That same year, he started his career at G.E. in the corporate marketing department in Fairfield, Connecticut. He soon shifted to the plastics division, where he met his wife, Andrea.
The turning point in Immelt's career came in 1989, when he was with G.E. Appliances. In response to one of the company's biggest recalls, he coordinated the replacement of a million faulty refrigerator compressors. In the process, he came into his own as a leader; according to Time magazine, he delivered rousing speeches from atop a forklift on the factory floor. Top brass noticed his abilities, and by the time Immelt became president and C.E.O. of G.E. Medical Systems in 1997, he had been marked as a possible successor to Welch.
Welch looked to Immelt to execute many of his strategies at G.E. Medical Systems, which became the first unit to institute Six Sigma, a quality-control process intended to lower the company's costs.
When it came time for Welch to choose his replacement, he tapped Immelt over Robert Nardelli, who went on to become the (now disgraced) chairman and C.E.O. of Home Depot, and Jim McNerney, who landed the job of chairman and C.E.O. of 3M before moving to Boeing. Immelt took the top job at G.E. on September 7, 2001.
WHERE HE'S GOING
Immelt has moved away from Welch's obsession with the bottom line. The new leader stresses long-term growth powered by idea generation and marketing.
And as his predecessor's methods fall out of favor on Wall Street-witness a recent Fortune headline, "Tearing Up the Jack Welch Playbook"-Immelt will have a chance to further redefine the company on his terms.
Immelt has already overseen a reshuffling of the company's portfolio, spending $70 billion on acquisitions. Now he must prove that the new mix of business lines, which focus on high-margin sectors such as health care rather than low-margin ones like plastics, can boost the company's lagging stock price. -Zubin Jelveh