Cohan's Book Chronicles the Success and Failure of GE

seventeen years seventeen long time financial journalist. He's been writing for a Who's Who, a business journalism, and more, including Business Week. He's authored many books, several New York Times bestsellers, former Bloomberg contributor, and I think you and I even anchored together at one point. We did time the good old days. Anymore, I'll just see myself out and listen to this. His latest book is Power Failure, The Rise and Fall of an American Icon. Really delighted to have

you in studio. First of all, how are you. I'm great, Thank you. It's great to be here, great to be back in this building. Honestly, it is really great. Right A long time ago, you've been busy tell us about this book. Well, Uh, there seems to be a strange pattern going on, Carol. Like you know, when I wrote about bear Stearns, there's sort of a metaphorical dead body on the ground, and I wanted to know how it got there. Same thing with the Duke Lacrosse scandal. Uh,

even the Goldman, I wanted to know how it avoided death. Uh. And with GE, you know, Uh, to me, it felt like also there was a dead body on the ground, and I wanted to know how it got there. It was sort of like a mystery that I wanted to solve, and I felt compelled to solve it. So some for some reason, I made the crazy decision to go back to the founding of the company and try to figure out what happened. And even from the outset, things aren't

exactly the way they seem. People think that, you know, Thomas Edison was the great founder of GE, but in fact, by the time his company merged with another company, another electric company, Thomas Edison was already out of the picture.

It was just a small shareholder of a company that was controlled by JP Morgan and Henry Villard, with Henry Vllard being the CEO, and then it merged with Charles Coffin's uh, you know electric company to form General Electric, and Charles Coffin became the CEO of the combined company, with Edison not even knowing about the merger, not wanting the merger, and him just like floating off, you know, over to New Jersey to you know, create some sort

of limestone mining company or something. So right from the outset, and then just one more thing, because it is darn interesting, is that was? And then in was the big financial crisis and ge almost went bankrupt. And if they didn't buy their debt back at a discount, if this sounds familiar, if they didn't buy their desk debt back at a discount with permission from JP Morgan, they would have gone bankrupt. So fast forward to today, and yes, what we see

what we see with g today. How would you just where or when would you describe the turning point into you know, the quote unquote dead body that you see gees today? When did that start to die? But you know that, of course is the subject of much debate sort of centered around the idea of whether sort of Jack Welch Uh, you know, bequeath Jeff Immult a company that was not nearly as robust as Jack thought it was.

Jack thought he had bequeathed them a royal flush, and Jeff thought it was, you know, kind of a losing hand. So whether that's true or whether Jack actually left, I mean, he did leave him the most valuable company in the world, the most respected company in the world. But you know, he also Jeff took over from Jack on September seven of two thousand one. G E made the engines on

the jets. GEE had reinsured some of the buildings down at the World Trade Center, and they of course owned NBC Universe NBC which hadn't ran from with no advertising for you know, least a week, costing GE hundreds of millions of dollars. So uh, and they lost some employees that day. And of course, uh, you know, everything kind of changed in governance after nine eleven. Uh. And so you know, Jeff thought he had gotten a very different set of assets and opportunities than Jack thought he had

bequeathed them. But so the question is, you know, did Jeff play the hand poorly or did you know, can make wrong decisions. I think really the turning point seemed to be, uh, the financial crisis, no surprise because because you know, g E owned G Capital, which was, you know, like the third or fourth largest financial institution in the country, and everybody was focused on Wall Street going down the tubes. But G Capital almost went to two down the tubes

as well. It's something I want to ask you about, Um that's not related to your book, but the crypto world. For someone who has understood the financial market, it's been on Wall Street prior to writing all of these books. Um, how do you see the crypto world right now? Do you think about it? Do you want to write about it? I've I've written about it for Puck. You have written about it. Yeah, that book coming at some point, probably

by Michael Lewis. I think over the weekend right I am working on a documentary film about cryptocurrency and did interview the infamous now SBF less December for ninety minutes for the film. Uh. You know, this is a watershed moment, and not a good one. It's sort of you know, it's it's hard to say whether it's an Enron moment, an MF Global moment, a Lehman moment, it's probably some of all of the same, and none of them en did well, So it's not going to be good for

ft X, obviously already filed for bankruptcy. I mean, I think the big question is when you have the icon of the industry, you know, the guy who is supposedly the JP Morgan of the industry, you know, literally going up in smoke in three days when nobody even conceived of that. Of course, nobody conceived of Bear Stearns or Lehman going down, or en Ron or World Calm or any of those things. Of course, you know, they happened

very very quickly. And uh, you know, I think though it's gonna have huge ramifications obviously for Mr SPF whether or not he goes to prison or not. You know, it's unclear whether you know, he's you know, criminally culpable for what went on or maybe just naive. I mean, it literally is unknown at this point. I think what we need is in an exam, an examiner in the in the bankruptcy case, like there was in Lehman, to

figure out exactly what happened. And I hope the judge appoints somebody, but I think this is gonna chill, you know, investment in this industry for a while. But but let me just make one other point. I also think that it will be a good thing in the long run, just like you know Webb dot one do zero was a good thing to come and go. We're gonna come back with Bill Cohen right here on Bloomberg Radio. You want to get back to our guests. Bill Cohen still

with us. His latest book well known obviously to our Bloomberg audience and a former Bloomberg contributor. His latest book is called Power Failure, The Rise and Fall of an

American Icon. It is about ge I want to ask you something though, because you've written about Goldman sachs Um and our most read story in the Bloomberg has to do with Goldman paying out a twelve million dollars or well over twelve million dollars to a partner who complained internally about a toxic workplace for women in the highest echelons of Wall Street's most prestigious firm. This is our most read story all day today. I guess what I wanted to ask you is what is the right question

to be asking? Is this a Goldman Stories that a Wall Street story, Like, what is it when we see something like this, which is, as our reporter said, this doesn't happen a lot, and it certainly isn't made public a lot when something like this happens. This is not just a Goldman Sachs problem. This is a chronic problem across Wall Street and has been for generations. You know.

My first book was about Lazard, where I had worked for six years, and I had a chapter in their chapter fourteen called It's a White Man's World, and it basically chronicled back then. That's that book came out in two thousand seven about the way women were treated at Lizard and it was not pretty okay. Uh. In my Goldman book, I also wrote about the way women were treated at Goldman. And I think I know some of these women who just you know, who brought this lawsuit

against Goldman. Uh. You know, this is a chronic problem across the industry. There's a lot of lip service paid to trying to treat people better, and not just women, but women in particular, and uh, you know, other people who don't have the opportunities they should have, you know, in this chronic you know that that goes back to sort of the original culture of the original sins, if you will, of these firms, which were sort of like

white male partnerships, and they were family owned businesses. They were small, little, my own businesses. There was a Mr Goldman, there was a Mr Sachs, there was a JP. Morgan, there were three Lizard brothers, there were Lehman brothers. So these were all family owned businesses. They were very wary of outsiders, didn't want, you know, even to marry outside the family because they were afraid of deluding the ownership and the culture that they were creating at these firms.

It was a matter of trust. But of course as they got bigger and wealthier and more successful, they brought in other partners. Sometimes it works, sometimes it didn't, you know. And and at Lazard they were wary of bringing in, you know, women, They didn't think women could you know, do this work or wanted to do this work. And I remember they had one woman, and then the idea was to bring in a second one. And somebody, some fancy partners, said, why do we need a second partner,

We already have one. I was a second woman. We already have one. I mean, that was the mentalities. Yeah, okay, whatever exactly. I mean, obviously that's ridiculous and needs to change. But it's slow to change, and even when they give lip service to it, it's slow to change because it's not a particularly you know, pleasant work environment to begin with. It's very laborious, hard work, long hours. Nobody's gonna have much sympathy for people who work on Well Street given

how much they get paid. But it's not, you know, a great lifestyle. The work life balance is completely messed up and hasn't really changed dramatically. Uh, you know, despite again what they say they're trying to do and pretending to try to do. So, you know, I hate to be a downer on this, but you know the fact is, there's a long, long way to go on this. I want to jump in here. We got some breaking news.

Apple said that it's preparing to get made in US chips, uh, or I should say made in US chips in a pivot from Asia. Supply. These chips are going to come from Arizona. Um. We're gonna get more on that in just a minute. For though, I want to go back to you Bill and talk a little bit about the culture at g because for years, this was a place that speaking of cultures, yeah, I mean your newest book is about e UM. For years, this was a great

place to work, especially if your upper management. You talk a little bit about how the culture they're allowed. For the downfall of G well, you know, my my first job out of business school, uh in was working at G Capital, financing leverage buyouts of all things, which was sort of like the last thing I would have ever expected to be doing in my life at that point.

I had been a reporter and have gone to business school, and then I was working at G Capital financing LBOs around the corner from here, and then I went and worked for the chief credit officer of G Capital up in Stanford, Connecticut. I always found g E to be you know, quote unquote corporate. You know, I wasn't necessarily a real corporate guy, but I felt it felt corporate. You know, there were there were there were HR departments before you know Wall Street firms at HR departments. You know,

there were uh lots of benefits and perquisites. You know, I got a company car, you know, I got to take these trips and go on golf outings and things like that, and it was sort of like Rara and really sort of American and sort of kind of white bready, you know, and you know it's okay. Uh, you know, I like the people. I really like the people I worked with. I think they are quite unique group of people. And I really enjoyed interviewing the people for this book.

You are from everybody from Jack, Jeff m Malt, you know, even people like David Zaslov and David Calhoun and Dave Cody, that the David's who all have become very successful. They they just loved Jack and they loved working at GE. I mean it's incredible. I mean, having worked at a bunch of Wall Street firms, you know, and interviewed a bunch of people working in all sorts of Wall Street firms, you rarely get anybody who says how excited and glad

they were to be working at Wall Street. But people really liked working at GE for for a long time, or at least during this you know phase, until things sort of unwound and uh, you know, did did did Jack Welch? And I do feel like the history around Jack Welch is being challenge and challenge and I think I think, I think it's un unfair to be honest with you, I I you know, I know David Gillis wrote that book about that, and uh, you know, I don't think that's particularly fair. You know, I spent a

lot of time with Jack. I worked there. I spent a lot of time interviewing. I spent with time talking to Jeff Immalt and other senior executives and board members. And I worked there, so I really got a feel for the place. And I think Jack created something that was really quite special. He wasn't anything remotely like a saint. He'd been he'd probably been canceled long ago and you know today, but he took over a company that was worth twelve billion dollars and and and it became worth

fifty billion when he left. Now, you know, that's quite an accomplishment. So the world's most valuable company right at one at one point, the world's most valuable company, the world's most respected company was It was kind of like Apple, Google, Microsoft all rolled into one. I feel like earning season would kick off officially when reported it was the bell Weather exactly. You know if the oldest member of the Dow it was, you know, it was, and the technology

that came out of that place was extraordinary. Yeah, I wish we had more time. We come back and talk some more whenever you like. All right, we would love it. We would love it. Bill Cohen um with us. You need to check out his new book because so much has been talked about, studied about, written about when it comes to the company known as General Electric. His book is called Power Failure, The Rise and Fall of an American Icon.