In Focus

All this Month in the Chicks Eye View we are going to be looking at CEOs. Chief Executive Officers. The Big Cheeses. The Top Dogs. As part of our Chicks Dozen we look at the management and the CEO of a company to get a well-rounded opinion of the business. Who is the man in the company's driver's seat? What makes him tick? What is he like? Where has been? Where is going to take the company and is he a leader?

Changing of the GE Guards

by Chick Karin

An interesting thing is happening over at General Electric (GE) right now. Their King of the Hill/CEO, Jack Welch, recently turned 65 and announced that he will retire at the end of this year. For the past few years there was speculation about who would replace him. It was down to three dudes, Robert Nardelli, President and CEO of GE Power Systems, James McNerney, head of GE Aircraft Engines, and Jeffrey Immelt, President and CEO of GE Medical Systems. Wow. Imagine even being considered to replace Jack Welch. (If you didn't know, Jack is a Corporate God. Under his 19-year tenure, GE has returned investors an annualized rate of 25%. An average of 25% per year!?! Major Kilowatts!) Who is the lucky guy who gets to fill those sockets? And, what happened to the other two?

Jeffrey Immelt was eventually determined to be the brightest bulb in Jack's eyes, and will be given the throne. But just who is this Jeffrey guy, and is he capable of taking over the house that Jack built? What does this mean for the company? As investors in GE (and the Chicks are), inquiring minds need to know!

Immelt, 44, has GE written all over his resume. He was born in Cincinnati, Ohio to a schoolteacher mother and a GE Aircraft Engines Manager father. Immelt got his BS from Dartmouth in Economics while playing for the football team, this after a stellar high-school basketball career. (Welch loves athletes, and even more, he loves guys who play golf. Guess what Jeffrey lists as his hobby? Golf. Way to play the game, Jeff.) He received his MBA from Harvard and started working at GE in 1982. He began in corporate marketing and moved to the plastics division, then to the appliance division and then back to plastics. It was in the plastics division that he met his wife (there's a joke in there somewhere), and they now have one daughter. He kept climbing the totem pole and 26 years later ended up as the President and CEO of the Medical Systems department. (Sounds like a long time, but doesn't it seem like you just graduated from high school yesterday? Time flies, and in his case, at the speed of light.)

The 6-foot-4-inch Immelt exudes personality. At Dartmouth he was president of his fraternity and his classmates call him a natural leader. According to a Business Week article, "They still hoot over his humorous class notes for the Dartmouth alumni magazine. he signed off by quoting John Travolta: 'Excuse me while I strut.' " In my opinion, anyone who quotes John Travolta can be my friend, but as an investor, we should look a little deeper. What has he done while at GE?

Get this. Since taking over the lagging Medical Systems department he turned the division around from losing money for three straight years to actually making a 23% profit!! Let's excuse him while he struts.

Time will only tell if Mr. Immelt can fill Welch's shoes, but in the meantime, he's got a great looking track record. But what happened to the other contenders - Nardelli and McNerney? They had been watched for the past six years by Welch and his Board of Directors, so where do they fit in the Corporate America Picture now? Well, it was only a matter of days before the un-chosen two were scooped up by some pretty high profile companies.

Robert Nardelli, 52, the former president and CEO of GE Power Systems, was named president and CEO of home improvement retailer Home Depot (HD). Also passed on was W. James McNerney, 51, the former head of GE's 10.5 billion-dollar-a-year Aircraft Engines. He Scotch-Guarded on over to become the CEO of the diversified manufacturing and technology company 3M (MMM). You can check on 3M in Chick Jana's article from yesterday.

I just find it interesting that within days of both men not getting the head job at GE, they are hunted down by the largest corporations in America to head up management teams. Just what is going on over there at GE that they are able to churn out such talented leaders? We will just have to wait and see how these Big Fresh Cheeses, Immelt, Nardelli and McNerney do, and if it's possible for them to find more good things to bring when it's their turn to be King of the Hill.

Keep the light on.I'll be back.