Republicans Made a Bonehead Play – Welch

Former General Electric CEO, Jack Welch sat down for a one-on-one interview with Bloomberg Television’s Trish Regan today and said the Republicans have made a boneheaded play coming out and wanting to defund the President’s signature legislation.

Welch went on to say that he stands by his previous statements and think the government’s jobs and economic data is highly flawed, but does believe the economy is getting better.

Welch also endorsed Sam Palmisano to be the next Microsoft CEO.

On who is responsible for the Government shutdown:

“There’s a lot of blame to go around and both sides get their credit. The relationships have just broken down. You can’t have key negotiations – take a business situation. You don’t meet every crisis to negotiate. You have relationships ongoing. Take the union example. When you have a union, you’ve got to work with the union all the time between negotiations. Build a relationship…I call it.”

“Let’s just take what happened here. You pass a bill. Pelosi says we’ve got to pass it quick so we didn’t read it. They get the bill approved. It goes to the Supreme Court. It’s the law. Then the president starts making changes. One side starts making changes. We’ll have waivers. We’ll change it for corporations. They don’t have to do it for a year. We’ll take care of Congress. All one-sided. Then the Republicans make a bonehead play and they come out wanting to defund it. You’re not going to defund his signature legislation.”

On whether the republicans are taking the wrong approach:

“They should have had a much more logical – where they are now with moderate steps like say, look, you gave it to the employers. Give it for a year and let people even try it for a year. If you want it, you can sign up. If you don’t want it, don’t do it. And this tax on medical devices, there’s some give there. Both sides want to give it. The Democrats passed I think – 30 of the Democrats in the Senate passed a bill wanting to give that up. Why do you want to tax a growth industry? Entrepreneurs get killed. It’s based on revenue, not on profits. So if you’re a startup and you’ve got a medical device, you’re getting taxed right now. That’s the wrong tax. But both sides – and the president says, I will not negotiate. So you’ve got one person asking to defund —

On whether he is concerned about the debt ceiling:

“Well, what I’d like to see happen if I could get it to happen, I’d like to throw the sequester in. I’d like to throw the CR in, and I’d like to throw the deficit bill in. And then there’s room to give. We can give a little bit on the tax pain. We can give a little bit on timing. We can make it optional for a year to sign up or not sign up and see how it works. We can do all these things and save face. People have got to save face here, both sides.”

On whether the government shutdown is helpful in terms of getting something bigger and better done:

“I think cleaning this up fast will only lead to bigger problems on the bigger issue. So I’d just as soon dabble along here for 10 days. Because we always have paid the employees that were injured by this in every shutdown we’ve had up to now. Now this is a tougher time financially, but we’ve always paid them. So the individuals who are being hurt will be taken care of most likely. And look, in a couple of weeks we’re into the big leagues game. So put it all in a hopper and come out, talk a lot, trust each other, be transparent and come out with a deal.”

“It’s so hard because the Republicans think – a few of the Republicans think they’ve got a winning issue on Obamacare, which we’ll only find out in time. And secondly, the president and Harry Reid think they can get the Congress back… So we’re playing politics, not country.”

On what the effect of the Affordable Care Act is going to have on businesses:

“Up to now, a little uncertainty. We’ll see it unfold. The biggest impact on companies has been the change in the work week to 30 hours. And that’s pushed some people into the 29-hour category, a lot of people. So we’re taking money out of the pockets of a lot of people in the 29-hour thing. We didn’t have to do that. It’s an element of the bill that didn’t have to be, but you had some compromise there. So there’s so many places to compromise. And if it’s in a big bill we got a better chance of saving face for both side. But right now they’re equally guilty.”

On what Republicans risk if they let the Obamacare exceptions for staffers pass:

“Look, I think they’re all in it together. That’s the unfortunate part. I think both sides of the aisle have played dishonestly with this element. They put $11,000 for families and $5,000 for individuals as a subsidy for themselves and their employees. It’s shaky. And I’m not sure it’s legal even. I don’t know all the law, but I would guess some people have commented it’s illegal. So it’s just – transparency is sort of a word that doesn’t exist. Now the president is having everybody over at 5:30. Hopefully they can get to a bigger deal, the beginning discussions of a bigger deal. But the media lives there every hour on the hour on the hour putting heat on, waiting for a bigger deal. It would be wonderful if we could throw all this sequester stuff, give somebody something there on one side, give something on the other side. Negotiations are critical. You don’t negotiate in a crisis. I worked for a company where we had strikes all through the ’60s and all through the ’70s. The first thing we wanted to do was become friendly with the union.”

On whether he is still skeptical of economic numbers and data coming from the government:

“Well, Labor Department statistics by definition are ridiculous. You’ve got 2,000 people in three offices making phone calls saying, have you worked for a while? And that’s why their numbers are vastly adjusted all the time. It just so happened at this time around November they were very positive, so I raised a question. But you’ve seen in the last two years the adjustments. Tons of people criticizing the gathering of the data. You had 2,000 people making phone calls to households saying, did you work? How long did you work? Did you work an hour? You’re employed. Come on. It’s a half-assed system for getting the data. Now over time people argue it all works out. I should have a put a question mark at the end of that tweet.”

On how he would characterize today’s economic environment:

“The global economy is strengthening. If you think back to a year ago, we had Europe falling apart, the US in a very tough situation. Today almost every economy is showing growth. I just came back from Europe. In Europe, there’s a real renewed optimism. There’s no question. It feels better. And it feels – Japan is doing great. Their GDP was up almost 4 percent in the second quarter because Abe has fueled one the same way Bernanke did here. So we’ve very expansionary policies both in the US and in Japan, and they’re paying off.”

On whether he thinks GE getting rid of NBC was the right move for them as a business:

“Well, they obviously thought it was. When you make a change in CEOs, the CEO decides what’s right for the – for the company at that point in time. And they decided it was much better to get the cash at a very good price and reinvest it in new businesses. And they’re doing that. So that was their decision. But that’s – when you leave – my predecessor left the same way. He gave me the keys to the office and I never saw him again in the office, truly. I remained friends with him, but it’s gone. And he taught me that’s the way to go. You don’t want to sit around second guessing being a – the worst idea in the world is when the CEO stays on the board. That should be abolished. That should be illegal.

On whether Alan Mulally is a good fit for the next Microsoft CEO:

“Well I know Alan from his days at Boeing. He’s a terrific leader. He’s a – he excites people. The question you have to ask about Alan in this job, does this technology fit – stretch him beyond his capability? Lou Gerstner came into IBM and did a very good job, so maybe that could happen. But I’m interviewing a guy this afternoon who I think would be a great successor. Sam Palmisano. I think Sam – I got to convince Sam that – he’s 62, but the new 70 is 60, the new 60 is 50. So Sam’s really 52 years old. So in about a half an hour, I’m going to nail him on the stage, I hope he’s not watching this, and ask him if he’d take this job. Because I think Sam Palmisano’s been one of the great CEOs in the decade.”

Video for viewing here.

Bloomberg Television

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