Welch divorce will deflate superhero myth
© St. Petersburg Times
New York Times columnist Maureen Dowd once asked legendary General Electric chief Jack Welch what could possibly make Jack, Straight from the Gut -- his bestseller biography, released last fall -- worth an upfront $7.1-million.
Is there any sex in it? "Very little," Welch said then, laughing. If only the book had been published a few months later.
As it turns out, we don't know Jack.
The business executive corporate peers most want to emulate and America's business media most like to fawn over -- the person that Fortune magazine in 1984 called the "toughest boss in America" and later anointed as "Manager of the 20th Century" -- is about to face one of the highest-profile corporate divorces in history.
Welch's split from Jane, his (second) wife of 13 years, could land Mrs. Welch one of the biggest settlements ever and make her one of the richest women in the United States.
Memo to publisher: Any sequel to Straight from the Gut might better be titled Straight to the Gut.
Last fall, the 66-year-old former GE chairman gave an interview to 42-year-old Suzy Wetlaufer, the editor of the Harvard Business Review. A romantic relationship quickly blossomed. And that prompted the 49-year-old Mrs. Welch to call Wetlaufer in December and question her, shall we say, journalistic integrity.
Wetlaufer, divorced with four kids, went to her superiors and confessed to the dalliance. The extracurricular tale was first reported March 4 by a reporter for the Wall Street Journal. But that did not stop the Journal, in a somber March 18 take on the affair, from referring to Welch as "super-CEO."
Should we bother about any of this intrigue? But of course! If we didn't all gravitate to reading about the tawdry, People magazine would not prosper.
But there are two longer lasting reasons to care. First, the Myth of Jack Welch -- Superhero of Corporate America -- has long needed serious deflating. (Manager of the 20th century? Get real.) Welch also acquired the nickname "Neutron Jack" -- a dubious monicker much like the one owned by less revered cost-cutting champ,"Chainsaw" Al Dunlap -- for introducing to GE the policy of routinely firing the "bottom 10 percent" of the company's work force. Welch reasoned that fear was the best way of keeping GE's minions on their toes.
Second, the upcoming divorce between Jack and Jane Welch may well reinforce the recent trend by corporate wives, who have sued their feckless husbands for half their net worth. Divorce among executives is rising, in part because it has lost its stigma among the business elite.
Talk about all in the family. It was the raucous 1997 divorce between Gary Wendt, a Jack Welch underling and the chief of GE Capital Corp., and wife Lorna Wendt after 32 years of marriage that sparked the national movement of 50-50 splits of personal assets. (Several states already endorse equal sharing.)
Gary offered Lorna 10 percent of marital assets to go away. Lorna Wendt fought back, going after not only typical assets, like cars and home, but "soft" assets such as Gary Wendt's pension benefits and even unvested stock options.
She later won a $20-million divorce judgment and, in the process, became a new feminist symbol. In 1998, she established the Institute for Equality in Marriage. Her divorce case remains the shot heard 'round the water cooler.
In Jack Welch's case, GE paid the departing chairman more than $16-million in 2001. Last year, Welch for the first time also made Forbes magazine's list of the 400 richest Americans. His rank: No. 376.
Conservatively, we're talking about dividing a potential pot of Welch's wealth of at least $680-million. Probably more.
When Jack Welch divorced his first wife, Carolyn, in 1987 after four kids and 28 years of marriage, he was approaching his peak years of corporate power and personal fame. In his own words, he thought himself a babe magnet.
"Suddenly I found myself single again," Welch writes in Straight from the Gut. "Being single and having money was like standing six feet four with a full head of hair. Everyone is trying to fix you up, and you get lots of dates with interesting and attractive women."
But no relationship clicked until Walter Wriston, the banker who built Citicorp into a global giant, and wife, Kathy, arranged a blind date for Welch with Jane Beasley. Seventeen years younger than Welch, she was an Alabama-born lawyer who worked at Citicorp's law firm, Shearman & Sterling in Manhattan.
The first meeting was a double date with the Wristons at Tino's, an Italian restaurant. Later that night, Jack and Jane closed the bar at Cafe Luxembourg. On a second date over burgers at Smith & Wollensky, both Jack and Jane arrived in leather jackets and jeans. It was a sign, Welch says. They married in April 1989 at Welch's house in Nantucket.
Welch agreed with his new wife to go to the opera, which he never learned to like, until she relieved him of that chore. His wife, in turn, agreed to learn to ski and play golf, Welch's true love.
Jane, wrote Welch in his book, became "the perfect partner."
At least until Harvard Business Review's Suzy Wetlaufer showed up for an interview. After the romance began, she reportedly flaunted an expensive bracelet -- a gift from Welch.
Since the Jack-and-Suzy affair came to light, Wetlaufer has resigned from her $277,000-a-year job, but will return to the publication in an "editor at large" role. Two colleagues resigned in protest at the embarrassment caused to the magazine.
One sorry detail: Only now is the Harvard Business Review clarifying its guidelines about author-subject fraternization.
As for Jane Welch, who lived with Jack through his multiple heart attacks, a quintuple bypass and years of corporate stress, she has retained the legal services of William Zabel. The lawyer has acted in a similar divorce capacity for international financier George Soros and novelist/TV producer Michael Crichton.
Here's an item bound to yield some fireworks: Jack and Jane's prenuptial agreement expired three years ago. That means Jane Welch is free to pursue wealth generated during the entire 13-year marriage -- the top earning years for the GE chieftain.
Jack, your next episode looks like it will be Straight from the Wallet. And hand over that nickname. Say hello to "Neutron Jane."
-- Robert Trigaux can be reached at email@example.com or (727) 893-8405.
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