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PIERS MORGAN TONIGHT
Interview with Jack Welch
Aired June 8, 2011 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PIERS MORGAN, HOST: Tonight, keeping America great. What would it take to turn this country's economy around? I'll ask a man who really knows.
(BEGIN VIDEO CLIP)
JACK WELCH, FORMER CEO OF GENERAL ELECTRIC: I bet America is going to come back.
(END VIDEO CLIP)
MORGAN: Jack Welch ran one of the world's biggest corporations. What would he do to get America winning again? What does he think of President Obama's attempts to stem the financial crisis?
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There are too many people out there who are still out of work, without a job that allows them to save a little money or to create the life they want for their families. That's unacceptable to me. It's unacceptable to all of you.
(END VIDEO CLIP)
MORGAN: Jack Welch, one of America's most successful ever bosses, gives us his secrets for the success in business.
(BEGIN VIDEO CLIP)
WELCH: I hired great people. I was never the smartest guy in the world.
(END VIDEO CLIP)
MORGAN: Who would he hire to run the country? What does he think of the Republican field? What's his advice for politicians who fall from grace?
Jack Welch live for the hour.
This is PIERS MORGAN TONIGHT.
MORGAN: Good evening.
I'll bring in Jack Welch in just a moment. But, first, some breaking news on the Weiner-gate scandal. CNN has learned that Congressman Weiner's Democratic colleagues are urging him to resign -- in their words, quote, "to preserve his own dignity."
We've also learned that Weiner called former President Bill Clinton on Monday to express personal regret for his actions. Weiner's wife, Huma Abedin, is a top aide to Secretary of State Hillary Clinton.
And sensationally tonight, "The New York Times" is reporting that Ms. Abedin may be pregnant.
Jack Welch, I don't know where to start with this. And I never thought my opening words to you when I finally get to interview you, let's talk Weiners. What do you make of this?
WELCH: It's a tough go for this guy, yes. You know, his credibility is shot to hell and that's a tough deal.
MORGAN: Can he survive or should he just resign, do you think?
WELCH: Can you survive if you don't have credibility and don't have trust in the public office?
MORGAN: You tell me.
WELCH: Can you? I don't know how. I don't know how but --
MORGAN: He should go, you think?
WELCH: Well, I don't know how you would get up and start to represent your constituents with no credibility and no trust. I mean, the way he treated the press and everybody else and denying everything and -- according to "The Post" this morning, coaching the people to lie and according to Kristen Powers (ph) in her interview this afternoon, doing the same thing. I don't know. He said he didn't coach anybody.
MORGAN: If he had just held his hands up at the start, Weiner, and admitted to everything, the moment he was first approached by the media --, could he have survived then? Is it the lying that has made it a completely unsurvivable scandal?
WELCH: Neither event is pretty, particular all the photos out there. But he certainly compounded the problem enormously. It's always that way.
MORGAN: On a human level, I mean, you were I suppose a bit of a naughty boy.
WELCH: I was, I was.
MORGAN: And you were all over the headlines. People reveled in your -- you know, in your shenanigans. Yes.
What's it like to go through on a personal level? Obviously, you weren't on anything like this scale. You had an affair and it's well- publicized. When you go through it though, when you are the subject of headlines like this, what's it like?
WELCH: It's no fun. It's ugly. But in my case, I was -- I had retired. I told my wife immediately. I didn't hide anything. I never lied to anybody.
I married the woman I had the affair with. And I'm happily ever after.
MORGAN: Yes. So, actually, honesty, when you're caught, is the best way with all these things?
WELCH: Everything. Honestly, when you find a new activity, say what it is and get on with it.
MORGAN: I got you on because I can't think of a better person to ask about the economy, the financial crisis, and about America PLC. To many people for many decades, you personified America PLC.
What state do you think the economy is really in? I thought lots of people giving lots of different views. Your view is one I really want to hear.
WELCH: My view with -- we're muddling along. We're not going to double-dip in my view. There's too much liquidity out there. But we don't really have a vision of where we're going.
In order to lead a country or a company, you've got to get everybody on the same page and you've got to be able to have a vision of where you're going. America can't have a vision of health care for everybody, green economy, regulations -- can't have a bunch of piece- meal activities. It's got to have a vision.
The vision has to be, in my view, Piers -- it's got to be the most innovative economy in the world, growing at a healthy rate. And then everything you do has to pass through that screen.
MORGAN: But what is fascinating about what you're saying is the last time America was in a similar kind of position, and there are differences, but it's similar, was ironically when you took over at G.E. in 1980 and then the new beast in town was Japan.
MORGAN: Now, it's China. And America faced similar challenges. The jobless figures were actually higher then.
WELCH: Much worse.
MORGAN: Interest rates were 13 percent, 14 percent. I mean, this was --
WELCH: Prime rate was 20 percent.
MORGAN: Right. So, arguably, a worst scenario than we're in now. Your response to this, in turning G.E. to the biggest company in the world, was to get in there, to slash the dead wood, to sell off any companies that were not first or second, to have a new system where the bottom 10 percent of the workforce fired every year.
It was brutal. It was ruthless. And it was incredibly successful.
Would that formula you deployed then for G.E., would that work for America as -- if you viewed it as a corporation?
WELCH: Yes. If America had a strategy of being a highly competitive, successful winning enterprise and you put everything through it, you wouldn't have this uncertainty. You would have every government action supporting this vision.
For example, in G.E., we got rid of a lot of businesses that weren't number one and number two. But we had -- we were selling televisions, we were making televisions in Syracuse, New York, television sets, and the Japanese were selling them cheaper in downtown Syracuse than we could make them. Well, it didn't take a scientist to tell you you couldn't keep doing that.
MORGAN: When I had Donald Trump on there, in fact, every time I have him on here, it always gets around to China in about five seconds. And he starts ranting about China.
He says America has surrendered itself businesswise to China. There should be trade barriers now. He gets very, very animated.
Is there any merit to that? Or do you think the actual answer with China is to be more competitive by giving them what they need?
WELCH: Out-innovating them is the way to beat China. And to do everything that we do in this country to support innovative policy, that drives innovation and new products and more jobs and creates jobs. You can't -- you can't put a wall up around here. We tried that in the '30s. It didn't work.
MORGAN: Am I right in thinking when the Japanese were ruling high in the '80s, actually what they wanted and what they got from America was when -- precisely what you're suggesting. They came up with innovative stuff the Japanese actually needed and they bought it.
WELCH: Absolutely. We had enormous trade surplus with Japan and General Electric. We sold them turbines. We sold them nuclear plants. We sold them lots of things.
And, in the end, Piers, you cannot put a wall up to win this game. You've got to have policies that allow you to win.
For example, we're the only country in the world that taxes foreign earnings. What does that do? Keeps all the money over there because they don't want to bring it back to get taxed. People say, "Why don't you bring it back?" Because if you leave it there, you don't pay taxes on it.
And every other country, even Japan and the U.K. in the last few years have broken that and have said, wherever you may make your money, bring it back, it's free.
MORGAN: President Obama, according to a new CNN poll today, his personal approval rating is falling. It went up a bit after the bin Laden assassination or killing, whatever you want to call it -- down six points since then. Many people saying the reason is that the economy appears to be tanking again.
And this election, according to another poll today, what are the issues that you must care about -- Americans were asked -- four of the five subjects were economic-based subjects. One was terrorism.
So, it looks to me and to most observers here this election will now be fought almost solely about the economy and almost solely on domestic economy.
What does President Obama do? I know you don't want him to succeed in this necessarily. But if you were him, what would you do right now to get your approval rating up because people think we know what you're doing with the economy.
WELCH: I would, in fact, not just use rhetoric to move to the middle. I would use actions to move to the middle.
And I would put a real lid on regulations for a while. I would not allow my NLRB to tell the Boeing Company that they can't move to a place after they moved there and they built a plant and spent $2 billion and hired 1,000 employees in South Carolina and say, no, no, no, you got to go home or you got to fight it in the courts.
I wouldn't do anything to hurt our competitiveness because my vision would be, we want America to be the most competitive enterprise on Earth.
MORGAN: You cited Steve Jobs, Apple, repeatedly, as a great example of what you're talking about -- an entrepreneur with creative geniuses around him, constantly innovating and dominating a marketplace by doing so. And, you know, if everyone behaved like he did and Apple did, America would be in great shape.
WELCH: Absolutely. He has done a remarkable job. Imagine a guy who started Apple. They threw him out. Apple sunk. He goes to Pixar, created another multibillion car company. Comes back to a reeling broken Apple and gets it back number one again. Think of it.
That's what we need everywhere. We need --
MORGAN: Why aren't there more Steve Jobses being created in America?
WELCH: That is a great question. There are many more than you think. America's management today is far superior than what it was when I was there. Fat cats used to run companies, sitting in offices with big briefing books.
Today, we have short-sleeved managers. I run a course called "Two Days with Jack Welch," do it twice a year, and I bring in 100 executives. And these guys run $500 million companies, billion dollar companies. Not huge companies.
They're on fire. They're doing all kinds of stuff. They're creating jobs. I mean, we just need more job creators.
We don't need uncertainty and regulations. You can't pass a health care bill, Piers, and then end up with 1,300 exemptions because your friends get it. Who gets it? What's the answer (ph) -- who's -- what does it mean? It's a real issue.
We got to get the uncertainty out of the game. What are the rules?
MORGAN: I want to come back and ask you how we get the uncertainty out of the game. But I also want to come back first after this break and ask you how we got into the mess in the first place, because it was a spectacular mess.
(BEGIN VIDEO CLIP)
OBAMA: We are in a tough fight. We've been in a tough five in the last 2 1/2 years to get past a crippling recession, but also to deal with the problems that happened before this recession -- the fact that manufacturing had weakened, the middle class was treading water. I don't think the answer is for us to turn back. I think the answer is to stand up for what this country is capable of achieving.
(END VIDEO CLIP)
MORGAN: President Obama expressing faith that the American economy can turn around.
Do you share his faith, Jack?
WELCH: With the right policies, certainly do. I think the American spirit is alive and well. And we just need a clear direction, where everybody can get in line to follow it, including the government and the private sector.
MORGAN: When you retired and you left G.E., five, six, seven years ago --
MORGAN: Ten years ago. Really as long ago as that? Wow. WELCH: Yes.
MORGAN: So, 10 years ago.
WELCH: Yes, I mean, 10 years.
MORGAN: It's a long time, isn't it? It feels like yesterday, Jack.
When you left 10 years ago, everything was riding high. And G.E. was fantastic. You're going from $14 billion to $400 billion. America was riding high. Everything was looking great.
What went so catastrophically wrong that meant that we had this terrible financial crisis?
WELCH: So many things can be attributed to what caused the problem, but certainly lots of money available too easy. When smart people have too much money floating around too easily, the risk premium has gone out, out of bets.
MORGAN: Is that because greed kicks in?
WELCH: No, I don't think it's so much greed. I think it's everybody sort of free wheeling it. For example, we had the Congress saying everybody should own a house. We had Fannie and Freddie supporting that.
We had mortgage bankers out people things. We had Wall Street dreaming up new instruments, SIVs and things like that we never heard of before.
We had -- everybody had a piece in this. Everybody.
MORGAN: Who was most to blame?
WELCH: Boy, that's a hard one. I mean, you can -- well, you can blame the consumer for getting a house they didn't have with no responsibility. You can blame Wall Street for pushing it. I really can't pick one.
WELCH: -- by the Wall Street.
MORGAN: If you were CEO of America PLC or Wall Street PLC, and you were doing your 10 percent rule, who would you have fired? I mean, who were the main culprits here from a business perspective?
WELCH: Well, I would have cleaned out anybody in the mortgage business who put faulty mortgages together. I would have put in people that were putting together faulty paper. I would have cleaned out everyone of those people that were falsifying their applications as to their ability to pay. I mean, there's a series -- there's an army of people --
MORGAN: Should some of these people have gone to jail?
WELCH: I'm not -- I'm not qualified to pick that, whether that's true or not. I don't know enough in the details of that. I honestly don't, Piers, I tell you.
MORGAN: But when you talk about falsifying paperwork, can it be --
WELCH: Consumers do that all the time. I mean, when we just had this thing in the -- this oil problem in the Gulf. Ken Feinberg talks about all the false paper he got, with people claiming that lived in Maine, they had a problem with the fish in their restaurant. And everybody put in a claim.
I mean, that's just life.
MORGAN: So, you weren't saying that people in Wall Street itself were falsifying stuff because that is --
WELCH: That's wrong.
MORGAN: That has been suggested, that many of them were.
WELCH: No, I'm not saying that. I'm not --
MORGAN: They were playing with paperwork and it wasn't real money.
WELCH: I'm not sure it's true. They were putting together instruments and selling them through a public that was buying them. Was that right or wrong? I don't know. I don't know if it's illegal or not, Piers. I'm not -- I'm not capable of answering that correctly.
MORGAN: If you'd been running Goldman Sachs, would you have allowed the multimillion dollar bonuses to be paid out after the bailout for the next few years?
WELCH: Look, there's a culture in Wall Street, I own (INAUDIBLE) -- which is one of the worst moments in my life.
MORGAN: But you got rid of it.
WELCH: Yes, because I couldn't manage that system of bonuses. We had a trader who did something illegal. I had to go down there on a Friday night and work the weekend with a crowd to find out what went wrong.
Well, I went to the men's room. I'm in the men's room standing next to a trader. He said to me, we had a $4 million fraudulent play. He said, this won't hurt my bonus, will it?
MORGAN: All he cared about.
WELCH: All he talked about. It's a culture. It's a culture. I wasn't able to manage it. MORGAN: But let's take this culture for a moment because many say it was precisely this culture collectively across all the people you've talked about which led to the crisis. The culture nearly brought down -- it brought down Lehman Brothers. It could have easily brought down Goldman and others.
They were bailed out. And the moment they got back on their feet, having been bailed out, the first thing they did, from my perspective, was stick their noses straight back in that same trough.
WELCH: And if they didn't, guess what those people would have done? They would have gone to the British banks and to the other banks, Hong Kong, Shanghai Bank, Deutsche Bank and everybody else waiting to steal their people.
MORGAN: Unless the global banking community --
WELCH: All took an oath and said, "We will stop bonuses."
MORGAN: No, unless governments all around the world, when they orchestrated these bailouts, said, "We'll bail you out and you will all sign up to no bonuses for the next five years." Why couldn't they have done that?
WELCH: Why didn't the government do that?
MORGAN: Should they have done it?
WELCH: Well, I mean --
MORGAN: -- big defender of --
WELCH: I don't like the government doing it, OK? So I'm not going to get drabbed into that one, OK?
MORGAN: But it's interesting that you even hesitate, because you've been a big supporter previously, I'll grant you that, of allowing people to be paid what they should get in the marketplace.
WELCH: I do.
MORGAN: And that includes bonuses. But this is different. This is where these companies have been bailed out by the taxpayer. It's a different scenario.
WELCH: No, I'm giving you that point. I'm giving you that point that they should have been more cautious. But they had a competitive playing field again. And you've seen it.
MORGAN: They only had a playing field at all because they were bailed out.
WELCH: But they still had to stay in business. They had to stay in business. MORGAN: You don't have to reward yourselves multimillion-dollar business bonuses --
WELCH: You better award your investment banking team. You better award your best traders. Or somebody else will take them. That's the system down there.
MORGAN: Yes, but that's what I mean about had there been a global --
WELCH: Oh, yes. I'm not arguing --
MORGAN: -- crackdown. If they all got together, we're all in this together. There wasn't a country (INAUDIBLE) actually it's not true.
WELCH: Canada did a nice job.
MORGAN: There were countries that didn't. But, actually, collectively, if they'd all gone in together and said, right, here's the deal, yes, we'll bail you out, no, you can't have bonuses for five years for anyway. So, there's no trading around.
WELCH: Let's not make it five years.
MORGAN: Three years. Something. What I hate is you've got millions and millions of Americans who have lost their home, who have lost their jobs, who have lost their security, who can't feed their children, and they're having to read in their newspaper -- one of the few things they can afford still -- they're reading or seeing on television about these bankers and all they're thinking is: these guys got us in the mess. We bail them out. And now, they're making millions again and I don't have a home or a job.
WELCH: And I don't blame them for being mad as hell.
MORGAN: It's wrong, isn't it?
WELCH: Seems to be. You won't get me arguing that case. I don't buy that case. So, but I know -- I do know that unless you got everybody, you sink this company and that company because that culture will move people to where the action is.
MORGAN: We're going to come back after the break and I'm going to talk to you about politics. I think you're on the roll now, Jack. It's time to go stacking (ph) on the big political issues of the day. I want to know who you think should be running the country.
MORGAN: And if you want to tweet me, tweet @PiersTonight or @PiersMorgan. And we'll put some of your questions to Neutron Jack.
(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)
SARAH PALIN (R), FORMER ALASKA GOVERNOR: (INAUDIBLE) which was something new to learn. And, you know, he warned the British that they weren't going to be taking away our arms by ringing those bells and making sure as he's riding his horse through town, to send those warning shots and bells that we were going to be secure and we were going to be free, and we were going to be armed.
(END VIDEO CLIP)
MORGAN: That was Sarah Palin in Boston last week, giving her unique view of American history.
I mean, Jack, when you hear Sarah Palin come out with stuff like that and she's so carefully controlled these days, we don't hear many spontaneous utterances. When she says something like that, does it worry you she might have her finger on the nuclear trigger within a couple years?
WELCH: I wouldn't support her for president.
MORGAN: You think she'd be dangerous?
WELCH: I just wouldn't support her for president.
MORGAN: Why not?
WELCH: I don't think she has the gravitas or the international depth or a lot of things. I know I wouldn't support her for president.
MORGAN: She's getting a lot of grassroots support.
WELCH: She's a celebrity, not a politician.
MORGAN: And you think it's because of that she's getting support?
WELCH: Well, I mean, people follow her. I mean, she struck a vein along with the Tea Party in terms of government spending and government waste. I just wouldn't support her as president. I have nothing against her. I just wouldn't vote for her.
MORGAN: Do you see anybody emerging on the Republican side who is the kind of ladder that you're looking for?
WELCH: You know, Piers, this is a great question, because if you asked me that a month ago, I would have said, well, Mitt Romney might be best guy, et cetera -- the most obvious guy. But everything I see Tim Pawlenty say in the last month appeals to me.
Now, he's not the jazziest guy in town. He's not the most exciting. But if you look at what he says and his vision for America and that plan he put out in the last 48 hours, every time I see him, whether it would be your show or somebody else, the guy makes sense. MORGAN: He definitely does. My only issue with him is that he -- he's not the most dynamic of characters. Does that matter anymore? Because Obama --
WELCH: It makes a lot of difference to get elected. Whether or not -- it doesn't do a hell of a lot for you once you're in the job.
MORGAN: I mean, you're a Republican, right?
WELCH: Yes, absolutely.
MORGAN: So, you want somebody who can beat President Obama. Now, Barack Obama, whether you like him or not, is a very, very dynamic kind of character.
MORGAN: And he has the youthful exuberance and zest and all that kind of thing.
When you look at somebody like Tim Pawlenty, I think he's a smart guy. I've enjoyed having him on the show. He makes all the sense that you say. I can see the temptation. But in your heart, do you think he can beat someone like Obama?
WELCH: I'm going to find out over the next 15 months -- hopefully, the next six to nine months because they're going to pick somebody in the primary. But, I mean, I just have found him -- you know, I was at the gym this week talking to some guys who never would have thought this. And I said what I just told you. This guy's starting to intrigue the hell out of me. And then he came up with his plan.
And I talked to some guy. He said, I'm going to have a fundraiser for him -- I almost dropped dead. This guy would never support Tim Pawlenty in his life. He's a Democrat. He's going to do a fundraiser for him.
MORGAN: Why do you think he's doing that?
WELCH: He likes what he says. He likes what he says. There's some buyer's remorse on the Wall Street crowd over the Obama selection, whether you want to buy that or not. There is some buyer's remorse.
MORGAN: And do you think that everyone on the Republican side is waiting for somebody to come through now? I get the sense it's all kind of in limbo.
WELCH: It is.
MORGAN: The issue now seems pretty clear cut. Forget any kind of foreign policy issues. It's about the economy. It's about jobs.
WELCH: It's about a vision for America. It's about where are you going to take America? Do you believe in America's greatness? Do you have an economic plan that's going to create jobs? Are you going to create an exciting, innovative America where people are going to win?
Is that what you're going to do? Are you going to grab people by their shirt and excite them about where you're going to take America? Where the pie gets bigger? We're not slicing a smaller and smaller pie and arguing whether we do this for health care, this for the environment.
We've got a bigger pie. When you get a bigger pie, Piers, armies win. We want it so armies win.
MORGAN: What do you so to people who say, look, Jack Welch, you were running GE. You took GE all around the world and did loads of business. Thus depriving and removing the ability of American jobs in America.
WELCH: I'd say, look, we grew GE from 25 billion to 130 billion dollars. And from 1985 to 2000, we didn't have many layoffs. All we did was build, build, build jobs.
We became competitive. We had a vision of becoming the most competitive enterprise on Earth. And we became the most competitive enterprise on Earth in every business we were in. Every employee rallied behind it. We had over a 90 percent approval rating of the management and the strategy. You don't get that for a dental plan.
I mean, you don't get it. People bought into where we were going. People would buy into a vision of America that wasn't piecemeal. We got a health care plan to get 45 million people on the health care and it won't cost anything. How do you get 45 million in, it's not going to cost anything?
MORGAN: When you look at countries like China, India, Brazil, so on, these emerging superpowers, economic powerhouses, how should America deal with this threat, which they've never had to face before?
WELCH: They ought to talk about them. They ought to talk about how successful they are, what they're doing. I had a meeting on Friday where -- I'm part of a group that runs this hundred CEO forum. And we had Brazilians and we had Chinese there.
Guess what? They both want to be exceptional. They both are excited about their growth. A guy said why -- the theme of the meeting was why are Brazilian managers so good? Brazilian managers are so good, they said, because they've been dealing with uncertainty for so long.
We can't even predict the past, was the line. Yet we're ready to move on a dime for anything. All the developed nations, the Brits, your old hometown or home country, the Europeans, the Americans -- we've had pretty steady trajectories, then maybe a downturn.
Uncertainty hasn't been the way. Now we're in an uncertain climate. We need more certainty. We have people scared about their jobs every day. When people know they have job security, and have a future, and somebody tells them where we're going, and doesn't leave them in limbo all the time, you'll get them there. You will get people so excited about the vision.
MORGAN: What it seems -- when we were in Britain, for example, looking at the whole big picture -- obviously, Britain's lost a lot of its power over the years. But you can look at it subjectively and you say, right, you got America, which was always the number one superpower. But now you have China, India, Brazil and the others.
Actually, America is clearly not going to be the only superpower in town. It may not even be economically the number one in ten years time. China may well, according to latest projections --
WELCH: Well, if we fall asleep, we won't be.
MORGAN: Exactly. Now, Donald Trump, to come back to him, his argument is that China is stealing jobs from America, stealing money from America, buying up all the debt to try and own and control America. What is the right way to deal with China?
WELCH: Out innovate them, which we can do, which we do all the time. Get government policies that every time a government official, a bureaucrat sitting in some damn office in Washington thinks of a new reg, he thinks, is this going to make America the most competitive enterprise, the most competitive country on Earth? Or if I do this, is this the right time to do this, when we're broke?
Or should we put more money into here and here? When they think through this problem and think of it through a prism of does this make us more competitive -- can we beat Brazil, China? It's OK to be exceptional. It's OK to be the best. It's OK to want to be the best.
MORGAN: Do they scare you or excite you, the Chinese?
WELCH: Excite me.
MORGAN: Because it's a new opportunity.
WELCH: They're huge, 1.3 billion people. All I see are consumers. All I see is opportunity. Brains. When I went to India, I went to India initially for low cost. When I got to India, I found out it wasn't about he cost. It was about all that damn intellect they have there.
MORGAN: Jack, hold this excitement for one second.
WELCH: Excuse me.
MORGAN: Have a cup of water. We're going to come back. I'm going to get some Facebook and Twitter questions for you precisely on this kind of thing.
MORGAN: Back now, my special guest, Jack Welch. I must say Twitter, Jack, and Facebook have been exploding since you've been getting overheated here. I love this one just in from Pergie519, "Jack Welch is the cutest little old dude ever. He's so smart. I could watch him all night."
How do you feel about being a cute old dude, Jack?
WELCH: I don't like the old part of it.
MORGAN: We got some more here. Quite interesting. This is from Tam Morkwed (ph) -- I think via Facebook -- "how do you fix Detroit? Is it on its way to being fixed?"
WELCH: I think it's on its way to being fixed. I think you see that every day. The topic is where they're competing very effectively with the Japanese and Korean imports. Although the Koreans are getting very strong.
MORGAN: I like this one because I actually wasn't even aware of this as we've been doing the interview? But Dorian Dallis reminds me "how did you overcome what was a crippling stutter?"
WELCH: My mother told me -- God bless her, Irish mother. She made me feel 6'4 with hair too. She told me every day, Jack, your mind just works too fast for your tongue. You're too smart. I believed her.
MORGAN: She made it almost like a positive.
WELCH: She made it positive. You know, I didn't experience -- I got to spend one second with you. I was speaking at MIT a week ago. A young man in the audience took the mike; there was 1,200 people in the auditorium. And he ah, ah, ah -- he couldn't speak. He couldn't speak. He was just -- I said, lack look at me. come on. Look at me stuttering down here.
I was sitting at the bottom of the well. And I'm not even -- I'm not even 6'4" with hair. And the guy yelled out, I am. And he came running up. It was a moment -- we captured -- they had a film of it. It was a moment you'd never see again. That's what you have to have. You have to have some guts and be told it's OK.
MORGAN: And is the power of positive thought -- it may be an old cliche, but is that key? It seeps seems to me that America collectively was so shaken by the financial crisis, it sort of lost its confidence. America's always been supremely confident. That's been the beauty of the place.
WELCH: Love that comment, Piers. Self-confidence is the key to everything you do with all your people. From your mother's knee to good grades in school to playing sports, whatever it is, every notch of self-confidence -- you, wherever you grew up, what you did, you did the talent show --
MORGAN: I'm sure, like you, I've often had moments of self- doubt. The trick is not to let anybody see then, right?
WELCH: Hide them. Hide them. MORGAN: Everybody has them.
WELCH: We all have them.
MORGAN: Exuding their confidence.
WELCH: Try getting a job with 425,000 employees and 25 billion dollars in business and you get the job the next day. And then you just go.
MORGAN: Another question here. This is -- I love this one. From Mark Bradshaw via Facebook. "How much money does Jack Welch have on him right now?"
WELCH: I don't know, but I'd probably be about -- I'd say somewhere between 100 and 120 bucks. So knocking me off wouldn't get you much.
MORGAN: I read a quote recently you have made 720 million dollars yourself. That true?
WELCH: Something like that.
MORGAN: Not bad, is it?
WELCH: For a kid from Salem that went through a 50 dollar a semester college, a hell of a country, huh.
MORGAN: Does money make you happy?
WELCH: No. I had my pile pretty early. Making other people -- seeing other people get money is the biggest turn on in the world. We used to get the stock option sheets on Friday night in our company. We'd see a guy making 80,000 dollars, an engineer, cashing in stock for 275,000 or 400,000.
We'd say what a hell of a weekend they're going to have. And that is the turn-on, to get everybody to grow. And that's what we got to do in America. That's what we did for 100 and some years.
MORGAN: Why isn't America manufacturing more stuff now? Why isn't it recognizing that this is probably the big problem?
WELCH: We're manufacturing lots of great -- we don't want to manufacture t-shirts. We don't want to manufacture --
MORGAN: What about, for example, very heavy big plant machinery and ship it to China, where they really need it?
WELCH: We are. Look at Caterpillar.
MORGAN: Are we doing enough?
WELCH: We're doing tons of it. GE jet engines, GE turbines.
MORGAN: Isn't that where you could see real growth? WELCH: We're seeing it. Look at Caterpillar now. That Earth moving equipment, it's all over China. Caterpillar's doing a fabulous job.
MORGAN: Would you like to se more companies like that?
WELCH: Of course we do.
MORGAN: Is that one of the answers, one of the solutions?
WELCH: Yes, one of the solutions is that.
MORGAN: Build more, ship it to where they want it and need it.
WELCH: Also, have it there, and bring some parts back and forth. You got to be part of a global economy.
MORGAN: Another short break now. When we come back, I want to talk to you about you as a business man, your philosophy for business success, based on the fact you were described as the manager of the century. So no pressure.
(BEGIN VIDEO CLIP)
WELCH: I hired great people. I was never the smartest guy in the room. From the first person I hired, I was never the smartest guy in the room. And that's a big deal. And if you're going to be a leader -- if you're a leader and you're the smartest guy in the world -- in the room, you've got real problems.
(END VIDEO CLIP)
MORGAN: That's one of the examples of business advice that Jack Welch has come out with his Jack Welch Management Institute, one of your new projects. You said you weren't the smartest guy in the room. A lot of the time you probably were, Jack.
What I liked about you was the simple philosophy you brought to your business. Having read your books. I'll read you some of the famous things you came out with. "Creating great people will make a great company. Shareholder value is the dumbest idea in the world. I want people who dream and I want people who sweat."
Are we getting enough of this ideology at the moment in America?
WELCH: Yes, I think we are. I think we're getting a lot of the latter. We're getting a lot of dreamers out there now in small companies starting out. The recession, in many ways, Piers, created a lot of entrepreneurs. They couldn't go to -- when I was when I was teaching at MIT, I had a class of 40 people; 23 of them had already started companies. That's something -- now we have immigration policy that's ridiculous. We throw people out. We educate them and then kick them out. We ought to give them a green card and a big check if they're here for a certain period of time, as an example.
MORGAN: You mentioned education. What was frightening to me if I was an American was the survey this week that said that China is about to overtake America in the field of scientific research production. That's a worrying moment. That means that education system is getting better and better and more and more competitive.
WELCH: Of course they are getting more and more competitive. That's why we have to step up our game. There's a great article in the Journal today on the lack of productivity in American universities. I mean, the cost of a higher education keeps going up for parents who can't afford to send their kid to a school, because these guys are -- too many of these guys are teaching one class a week.
The productivity now at universities is terrible. Tenure is a terrible idea. It keeps them around forever and they don't have to work hard.
MORGAN: One of the arguments against the Chinese way of doing business is that they don't have all the bureaucracy because they don't play by the normal rules. They cut corners. They're ruthless. They'll do anything to win. But they don't play by the rules. What's your experience of doing business with the Chinese?
WELCH: Well, it's a -- they do it their way. And you've got to be flexible enough to move with them and know what they're doing. But you can still play by a right move. But you're going to see when you -- we started a light bulb factory there. And we built three light bulb factories.
And we thought we had a real going concern there. Then we found out that every mayor of a town in China could buy a light bulb factory and could buy a light bulb machine in Hungary. And they said that's a good idea. Before we knew it, there were 500 lighting companies spewing out cheap light bulbs. So you've got to have something unique.
MORGAN: Isn't that their great trump card, what do so brilliant, the Chinese? They take a great idea and they do it faster, cheaper, and often better.
WELCH: No question. That's why you've got to always have something they need. To go to China with a me-to product is a joke. I've got to be in China because they've got a 1.3 billion people with a me-too product. They love you when you come with something special. They yawn when you come with something --
MORGAN: How important -- you said once here, integrity is the ticket to the game. If you don't have it in your bones, you shouldn't be allowed on the field.
WELCH: Absolutely. Integrity is the whole thing. When you go to countries initially -- in the '90s, the Europeans allowed bribery as a tax deduction, in the '80s particularly. And they started to change. When we went over there, we would lose orders to bribes.
MORGAN: Were you surprised by the Warren Buffett affair recently, when his top guy had to leave in what were pretty unethical circumstances?
WELCH: Warren will never understand that, nor will others. We don't know what is behind it all. So it's tough to comment. I was with Warren recently and he said, I was the most surprised guy in the world that this happened.
MORGAN: Were you surprised that he allowed it to happen?
WELCH: Warren runs a very decentralized company. He lets people do their thing. He's been very successful doing that. But it puts a lot of trust in every manager he has. And he's got to bet on them doing it all right themselves.
MORGAN: Do you think if you'd been in his shoes and a top, top executive, running the show for you comes to you and says what that guy said to Warren Buffett, wouldn't alarm bells go off?
WELCH: They did go off for Warren.
MORGAN: But it was too late.
WELCH: We don't know what happened.
MORGAN: Take a final break. When we come back, I want to talk to you about your flourishing second career as an actor.
(BEGIN VIDEO CLIP)
WELCH: Look, I know how much dawn meant to you. If you need to pass some eye water, I'll be happy to go out and get you some weakness tissues.
UNIDENTIFIED MALE: No, I'm not crying in front of Jack Welch, Neutron Jack. And I'm not giving up. Don Guise (ph) wanted this company kept in tact, and these people are from Philadelphia.
WELCH: Let it go, John! It's over.
(END VIDEO CLIP)
MORGAN: I mean, Jack Welch, Jack Nicholson, it's hard to tell the difference.
WELCH: No, it isn't.
MORGAN: Do you enjoy your acting?
WELCH: It was my big moment in the sun, I'll tell you.
MORGAN: Tell me about your new online venture.
WELCH: We've got a school called the Jack Welch Management Institute. It's at Chancellor University, which is a small school in Cleveland. And we've got an MBA program and we've got certificate where we're teaching people how to lead and how to manage.
We have four certificates. The first one, which we just started is how to be a new leader. I wrote the course myself with another person.
MORGAN: That's quite interesting, because actually someone has just Tweeted -- I like this question here. ToddPR on my Twitter,"Neutron Jack, if you were running a Fortune 500 today, what current CEO" -- we'll remove Steve Jobs from this for the purpose of this -- "would you hire to run a business?"
WELCH: You've got to say that Sam Palmisano at IBM has done an incredible job.
MORGAN: Best businessman in the world right now?
WELCH: One of them. One of them.
MORGAN: Who's been to you the most inspirational over all the years, all the business people you've met?
WELCH: Not one. And I think anybody who looks at one person as a leader is wrong. Everyone has got something special. Somebody can teach you how to do this better. Everyone -- you can learn from everybody. Finding a better way every day is what every person has to wake up doing.
I'm learning something from you tonight. I'll know more about how you think than I knew yesterday. And I'll know a lot of stuff here.
MORGAN: Jack, with the greatest of respect, I think I have learned slightly more, as have the viewers, from you tonight than you will ever learn from me. It's been a real pleasure.
WELCH: Thank you so much for having me, Piers.
MORGAN: Thank you very much.
WELCH: It's been a treat.
MORGAN: Get America going again. And tomorrow night, I'll sit down with a very different guest, the Duchess of York, Sarah Ferguson. Now here's Anderson Cooper with "AC 360."