GE and the House That Jack Built


Today's episode is brought to you by IBM. SMART is open open is smart. IBM's combining their industry expertise with open source leadership of Red Hat. Let's unlocked the world's potential. Let's put smart to work learn more at IBM dot. COM SLASH RED HAT welcome to textile production of iheartradio's. How stuff works either in welcome to text up? I'm your host Jonathan Strickland executive producer with how stuff works and I heart radio and I love all things tech and we are continuing our journey through the history of General Electric or GE accompany the has encountered some pretty significant challenges over the last decade or so now in our first two episodes I went went through the founding of GE and made my way all the way up through World War Two and I talked about how some of the top level executives of the company were called upon by the US the government to serve in wartime government positions to help the US meet the needs of supplying the military with the equipment necessary to fight the war. I also talked about how GE continued. They need to grow as a company building on new departments and divisions and diversifying the company's businesses and I ended the last episode talking about a court case that determined GE was being anticompetitive by leveraging patents in order to act as an effective monopoly when it came to manufacturing light bulbs now we're almost up to nineteen fifty and it's time to get out of this world. The one thing I want to mention before we get into the nineteen fifties is that in nineteen forty six a scientist at GE lean named Vincent Schaefer developed the process of cloud seeding and the ideas pretty elegant but has long been a subject of scientific dispute so here's the process it involves distributing tiny particles into clouds in an effort to make it rain and the thought is that these particles will act as nucleic really excites for raindrops to form when the raindrops get large enough they have enough weight to fall to Earth and so that is is the general thought behind cloud seeding it's been practiced ever since but there have been many questions over whether or not cloud seeding actually works sometimes it would rain. Sometimes it wouldn't and if it did rain. Is there any way to be sure that it was the cloud seeding that actually made the difference. I mean you had to have a cloud there. In the first place he couldn't just manufacturer cloud experiments in labs suggested that it should work but the natural world is very different from the controlled conditions of a lab environment ornament. It didn't help that. Many of our measuring instruments lacked the precision to detect very small raindrops so you couldn't really monitor to see if it was actually doing what it was supposed supposed to do. An experiment in two thousand eighteen suggests that cloud seeding does in fact work at least to some extent but there's another question that still open which is does does cloud seeding make economic sense does the amount of water produced by rainfall justify the cost of flying aircraft up and distributing the particles articles in the first place because may very well work but it might not work well enough to make sense from a financial perspective. I just find it fascinating that we've essentially really been doing this for seventy years and we still don't know if we should be doing it now. I can certainly see why cloud seeding companies feel. We should be doing it. I mean I mean that's their business but the jury is still technically out over whether or not it makes sense and they're still a little bit debate on whether or not got it really truly works or if it works in enough conditions for it to be reasonable now in nineteen forty seven g e made the first two door refrigerator. Raider Freezer Combo and I only mention it here because I think it's cool. That's a pun now up to the nineteen fifties. He's so in one thousand nine hundred eighty one g built. A new jet engine called the j seven nine and here's an interesting historical note when engineers tested the J. Seven nine which had variable status the efficiency ratings were so high that the engineers thought their instruments were malfunctioning tioning. There's there's no way we're getting this level of energy efficiency out of this thing but then that raises a question for a lot of people what is a status was that actually mean will the name gives you a hint statr stationary that kind of thing <hes> so in jet engines you have fan blades that rotate those are rotors and you you had fan blades that holden places are called status and the purpose of this combination is to both draw air into the engine and to compress fresh air before it enters into the combustion chamber the adjustable status meant that the engine could be finely tuned to produce higher compressor pressures. Shire's and to produce more usable energy as opposed to waste heat when you're actually burning fuel in nineteen fifty four G. Research Laboratory scientists anticipate named Tracy Hall announced that his team had discovered a way to create synthetic diamonds in the lab halls team used a process involving high high pressure high temperature or hp ht they were successful in producing synthetic diamonds on December sixteenth nineteen fifty four. You're now other teams were using different methods to create diamonds of the in other companies as well but it was halls efforts that would receive the credit for design the first first reliable reproducible methodology to create commercially viable synthetic diamonds so a lot of qualifiers there because there were people who are working on in different methodologies and they were also producing diamonds but it wasn't considered to be as reliable nor as viable for commercial use and these were not diamonds meant to. Adorn engagement rings or other jewelry for one. They were Brownish in color so they weren't terribly attractive. They also were very very very tiny the largest diamond they produced in that early batch measured point one five millimeters across so these were not large stones more importantly this purpose would be put to commercial uses <hes> in fact it wouldn't be until the nineteen seventies that scientists would actually be able to create diamonds of sufficient quality unclarity that they could be used in the gym industry and even then the process was so labor intensive and so expensive it was not economically feasible feasible to create synthetic diamonds for decorative purposes. The cost of the synthetic diamond would be so high though would actually be cheaper for free to go out and buy a ring with a natural diamond on it also the whole topic of diamonds is one that I find particularly cularly upsetting <hes> but that's a that's a topic for a totally different podcast. So how did they make synthetic diamonds while I'm sure for most of you know. Diamonds are a form of carbon. It's a it's a crystalline form of carbon. You GotTa crystalline structure where you have a carbon atom that surrounded by four other carbon atoms and they're all connected to each other through strong vaillant bonds and diamonds are incredibly hard. They are the hardest natural substance we we found so far. They also have a lot of different industrial uses. They can operate at high temperatures where they can hold firm at high temperatures. They don't really <unk> operate at all. They're just minerals but they hold together well at high temperature so you put it on something like a high speed cutting tool and the hardness combined signed with the fact that it's not going to break down at high temperatures means you can run that very high rpm since start cutting through stuff pretty well in nature diamonds form as carbon and is compressed at very high temperatures over a very long time and if it weren't for stuff like volcanoes we probably never would have found the things because they tend to form in the Earth's mantle which is not easy to get to they they the zone where they form about one hundred miles beneath the surface of of the earth. That's far deeper than we've ever drilled holes. Lab used a belt press and this press could exert more than ten GIG PASCAL ASK SCOWLS of pressure. A Pascal is a unit of measurement for pressure and it equates to a Newton per square meter standard atmospheric pressure is about one hundred one one point three to five kilo pass Cowles so a Giga Pascal is one billion Pascal Tenga passed gals would be ten billion pass gals. Dell's so that's a lot of pressure g would actually put it another way for those of us who don't use scientific notation for everything. They said the press could exert one point five million pounds per square inch of pressure so in other words. It's just a whole lot of pressure and plus. It would operate eight at a very high temperature. It would be heated to a temperature of more than three thousand six hundred fifty degrees Fahrenheit or two thousand ten degrees Celsius. This press pushed against a mixture of graphite which is another form of carbon and graphite would be dissolved in a catalyst metal than catalyst metals finals could include stuff like nickel or iron catalyst in a chemical reaction as something that facilitates and speeds up the chemical reaction so in this case and then that we didn't have wait millions of years for synthetic diamonds to form instead took about twenty minutes the largest of those diamonds like I said was point one five millimeters across so created darned tiny the following year. Ge introduced hermetically sealed relays. These are electronic components that could be used in lots of different applications nations that otherwise might be sensitive to their environments particularly in stuff like high altitude airplanes and aerospace applications and variations of these components would be used throughout the next few decades in those particular applications who's just one early example of how GE would become an important part of the space race which was just heating up in the nineteen fifties between the United States and the then Soviet Union. Meanwhile the company continued to expand and it's consumer product line it introduced a toaster decades earlier but in one thousand nine hundred eighty six it introduced the toaster oven specifically typically it was one called the t ninety three toast are oven and it's adorable. Nisha look up a picture of it that same year. Ge built a a commercial jet engine based off the J seventy nine design which was intended for military aircraft that wasn't meant to be for commercial aircraft so this new engine region which had the designation CJ eight. Oh five would mark General Electric's injury into the commercial jet engine business so now they were building jet engines engines not just for the US military but also companies like Boeing and other companies are creating aircraft nineteen fifty seven would be a really big year for GE e the company secured a contract with United States air force to provide the engine for an experimental supersonic aircraft the XP Seventy Valkyrie now. The EX in aircraft names is a big tip off that that's an experimental prototype. You'll often see X. As part of the designation at the beginning of various aircraft usually means experimental the engine called. Dj Ninety three was capable of producing enough thrust to propel the experimental aircraft two three times the speed of sound owned and it would travel an altitude of seventy thousand feet or about twenty one thousand meters now the time the thing was that the greatest threat to bombers were intercept aircraft so if you could fly high enough and fast enough you wouldn't have to worry about that. No one would ever be able to get a bead on you. They wouldn't be able to to to track you and fire on you at that speed in that altitude so the valkyrie would be safe against typical defenses however the Soviet Union was developing surface has to air missile technology and that started to bring into question whether or not the valkyrie would be equally as effective against that sort of defense system system and one of the ways to get around that would be to fly the Valkyrie at lower altitudes where it could fly beneath radar but if you did that you you also had to fly slower you couldn't fly at the same mach three speed at lower altitudes that meant that the bomber would be flying lower and slower lower than it was designed to do and it would be no more effective than other bombers that were already in use at that time and it was more expensive so with all of those this consideration stacked against the Valkyrie the ultimate decision was not to go into production and build those out as a production model so it it just remained an experimental prototype but is super cool to look at if you ever want to look at a picture of XP seventy valkyrie pretty neat looking something else that happened in nineteen fifty eighty seven was the general electric constructed a nuclear power plant and Alameda County California and it was the first nuclear reactor to be connected to a commercial commercial electricity grid in other words. General Electric was able to produce electricity though would go to average citizens over him Alameda County and and I've talked a little bit about how nuclear power plants work. I'll just give a very very high level rundown so new have a nuclear material that undergoes nuclear nuclear decay and as part of that process a releases subatomic particles typically neutrons and those neutrons collide with other atoms of that same nuclear material Israel. This is your fuel and when they collide with those other atoms it initiates a chain reaction those atoms then go undergo radioactive decay and they release neutrons and so on and so forth so if there's enough fissile material that is material that can split apart in the fuel this reaction can be sustained until the amount of fuel dips below critical levels in which case you start to have fewer and fewer reactions and you've spent nuclear fuel doesn't mean that all the nuclear radiation stuff has gone far from it but it's no longer producing the reactions at the level. You need to sustain that reaction indefinitely. This is a nuclear power plant now. The concentration -centration of nuclear material is really high where that reaction starts to pick up speed over and over and over again and this happens in the blink of an eye then you can set off a much more explosive chain-reaction in that case. You have a nuclear bomb rather than a power plant then that that concentration is key there. That's why you'll hear stories about how how much <hes> uranium you would need for a nuclear power plant versus one for refined refined uranium for a nuclear bomb. Now this reaction produces a lot of heat and it's the heat that's the key for these nuclear power plants that he usually usually through a paired system of pipes transfers to a boiler and the water in the boiler boils into steam and that steam then turns turbines lines which generate electricity so nuclear power plant is if you think about it really just a way to boil water really fast and really efficiently only coal power plants also boil water but obviously they do it through combustion rather than through a nuclear reaction so the interesting thing to me the as that the the part that generates the heat is different but the end result is very much the same in the sense that you're boiling water or to create steam turbines to generate electricity now. I'll not go down the nuclear power rabbit hole because there's much more talk about just with General Electric but if you want to learn more about nuclear power plants do a quick search over at tech stuff podcast dot com as where we have an archive of all of our past episodes you can also learn the difference between vision nuclear reactors which are what we use today and fusion nuclear reactors which we hope we can make feasible in in the near future. We have done fusion reactions already but the question is can you make that sustainable. Can you make it economically feasible. That's that's a question that we have not yet answered but if we are able to do it it could transform the world anyway the G. E. Facility which was called the Vallis Saito's nuclear centered it still exists. It was only an active power plant until nineteen sixty three at that point the federal government told ged shut it down <hes> so the boiler reactor was shut down in nineteen sixty three but gee maintains the facility mainly for the purposes of testing and analysis particularly testing radiated radiated materials to see how long they remain <hes> at dangerous levels of radiation for example so if you have instruments or the suits things like that that would exist. Radi- radiation in <hes> filled area you want to know how long does that stuff going to be dangerous. <hes> that's just part of what they do now. A major part of that facility <hes> one of the largest of the reactors on that site got shut down in nineteen seventy seven it was still being used for research purposes says but not to generate electricity. Why was it shut down. Well discovered that it had the unfortunate distinction of sitting nearly directly on top of a fault line line. There was a legitimate concern over what might happen should an earthquake hit while the reactor was an operation. There is still a small reactor on the side operates in the one hundred kilowatt range but that's the only one as far as I can tell <hes> otherwise all the other reactors have been completely decommissioned at shutdown. We've got a lot more to say about General Electric but before I get into that. Let's take a quick break. Today's Today's episode is brought to you by IBM. Technology is becoming more open data more accessible and the world more innovative. IBM is combining their industry expertise with the open source leadership of Red Hat to bring you more freedom more security or flexibility. Let's unlock the world's potential. Let's put smart to work learn more at IBM DOT dot com slash red hat the work out of GE's research lab was pretty incredible in the nineteen fifties as you have the nuclear scientists building that I licensed power plant to provide electricity to a grid you add synthetic diamonds and you had Robert H win TORP DWARF WHO created the substance called Borozan in the lab or zone is a man made substance. You don't find it in nature but it's almost as hard as diamond demand and it can be used in temperatures much higher that even diamonds can be used in diamonds will break down once you get over a certain temperature boras on can hold together longer so so it would also become a very useful component in industrial cutting tools for example now around the same time a different group of engineers were building something perhaps a little bit less. Salafi in the grand scheme of things but that would be the humble electric can opener g introduced. The first consumer electric can opener in nineteen fifty eight and pet ownership has never been the same sense in Nineteen fifty-nine g introduced the halogen lamp these work in <hes> way very similar to incandescent lamps. There's a tungsten filament inside a very small bulb and encasing the filament is a quartz envelope envelope inside the envelope is a gas from the halogen group of gases so this is different from what the gas would find in your typical incandescent bulb. The benefit of a halogen gas is that it can combine with Tungsten Vapor so when the tungsten filament heats up and it starts to give off light it's also giving off. Tungsten Vapor you know tongue says essentially burning off of the filament that vapor combined with the halogen gas and then it gets deposited back back onto the tungsten filament at least some of it does so some of that vaporize tungsten gets returned that actually helps extend the useful life of the Halogen Lamp Lamp Halogen Lamps can produce a lot more light per unit of energy compared to an incandescent bulb. They also produce a lot more heat and someone who has sadly a few halogen lamp fixtures in his house. I can speak from experiences. Those things get real hot. Guys like you will burn your fingers. I know I have anyway in nineteen sixty a device built by GE became the first man made object to be recovered after going into orbit around the earth it was code named by the RV to a re entry vehicle those part of the discoverer thirteen satellite right the discover thirteen satellite kind of set the stage for space-based reconnaissance and spy missions now granted that was not the public facing part of the mission. Obviously letting everyone know hey. This is a spy satellite is not the best plan. If you WANNA use it for you know spice stuff so there was a cover story in the cover story was essentially that it was a science experiment but in reality it was a classified mission that was overseen by both the Air Force and the CIA he I a. g. would go on to open up a space center in Valley Forge Pennsylvania in one thousand nine hundred sixty one because they were getting more and more involved in and building components for the space race also in nineteen sixty there was a guy named Jack Welsh who joined Ge as a chemical engineer. He'll he'll be really important later so remember that name. Jack Welsh we'll get back to it nineteen sixty two scientists from GE would develop one of the first solid state lasers using semiconductors interestingly scientists at IBM and over at Mit were independently doing the exact same thing and all the parties pretty much crack the problem right around the same time this set off a bit of a patent rush with G. beating IBM to the punch by a little more than a week. I just find it fascinating that the solid state laser was one of those things that multiple parties invented at around the same time independently a of each other but to be fair the stage had already been set with early work in Mazars and lasers so he's not the first lasers they were the first solid state ones solid state lasers would then find their way into numerous technologies and applications early on scientists theorize that they could be incredibly useful in communications but they would become so commonplace that we'd rely on them to play our tunes for us because the laser and stuff like CD players. DVD PLAYERS BLU ray players. Those are all solid estate lasers so what was truly cutting edge technology in nineteen sixty. Two is now so commonplace that you can go out and buy one and use it to frustrate your pets. You know you can just go get a little key chain with a solid state laser on it <hes> but I'm pretty sure back in nineteen sixty two. No one thought that that was going to be a future possibility. De Scientists were also working with superconductors and magnetism now. A conductor is a material that allows electrons to pass through it conducts electricity. A superconductor is a material that does this with no resistance to the flow of electricity so under normal conditions conductors have a bit of resistance to electricity atrocity in the amount of resistance is dependent upon several factors like how what the actual material is. What is the conductive material also its thickness org gauge so a thin copper wire for example has higher resistance than a thick copper cable. They're both made of the same thing but the physical structure structure is different and that changes the resistance of the material. GE's superconducting magnet was the first to break through the one hundred thousand costs limit limit. The Gos- is a unit of measurement for magnetic flux density. I'll give you the technical definition of Gos- as laid out by the Encyclopedia Media Britannica so here we go one gos- quote corresponds to the magnetic flux density that will induce an electro motive force of one AB volt in each linear centimeter of a wire moving laterally at one centimeter per second at right angles to a magnetic flux into quote okay so that's a bit of a mouthful anyway we rate magnets in Gos- that's how we measure their strength so jeeze superconducting magnet was incredibly ably powerful it would also lay the foundation for practical applications of that type of a magnet particularly in the creation of magnetic resonance imaging Technologies Angie would play a very important role in developing that technology or the MRI as we would say <hes> very important part of GS business one of the fun VACs. I discovered while researching these episodes is that the footprints that the Apollo Eleven astronauts left on the moon are there in thanks to GE specifically specifically the boots worn by the astronauts had silicone rubber in them that had been manufactured by GE so that's G. E. footprint up there in a way but that it was just one of the contributions Ge made to the Apollo Program. I don't want to discount or dismiss any of the other ones that the company made they actually provided a lot of technology analogy to the space program. General Electric was involved in designing or manufacturing several systems related to the space race including the ship to satellite communications system that allowed the Apollo crew to send TV images from the capsule two satellites orbiting the Earth which in turn being those images down to terrestrial stations in nineteen seventy-three three another GE researcher Dr Ivar Giver. Would get a Nobel prize he had back in nineteen sixty discovered the truly odd behavior savior of superconducting tunneling so what the heck is tunneling well it all has to do with the weird world of quantum mechanics and quantum physics so oh when I was in school we learned that electrons orbit the nucleus of atoms in a certain energy state and electrons would quote unquote want to occupy by the lowest energy state available once that energy state was full of electrons then the next electrons would fill up the next available state further out from the nucleus and so on and so on until you had all the electrons that that particular Adam would have whether it was a base version of the atom or an ion or whatever this was a pretty big simplification of what is actually going on then in my books. I remember seeing the old illustrations we had newer ones too but I remember those old. All illustrations has made it look like an electron with sort of like a planet orbiting around a Sun like nucleus so in other words according to those illustrations it would appear that an electron electron has a specific position around the nucleus that you could measure detect and predict but as scientists would later learn we could really only determine partial information mation about a subatomic particles velocity and location the more we knew about one of those two things the less we would know about the other so the more you know about particle velocity. The less you know about its position. The more you know about S- position the less you know about blossomed so really we don't know whether electronic quote unquote is is an up in a specific place we see we know where it can be the various positions where the electron could possibly be found. C can think of it as kind of a zone of probability or field of probability. There's a chance the electron will be at any of those points within that field it has to be within the field unless you've poured more energy into the atom and thus pushed the electron out but it has to be somewhere in that field. You just don't know where it is so it's Kinda this amorphous fog that the electron could inhabit now if you have a situation in which this field this imaginary Mary field because we don't actually have a fog here but if this field spans a barrier that normally you would have to use energy to get across it means that the there's actually a possibility that the electron could appear on the other side of that barrier so imagine you have a hallway and there's a door closed at the end of the hallway and you have this electron field and the electron field actually overlaps the door to the point where part of the field extends to the other side of the closed door then you would expect the electron to be in the hallway. You didn't open the door. You saw the electron go into the hallway. You figure that's where it's got to be but because that field overlaps the door there is the possibility that the electron could be on the other side and because there's a possibility ability means that sometimes there will be an electron on the other side of that door and it's as if the electron has tunneled through or climbed over the door but at no no time. Did it ever have to expend energy to do that. It just appeared on the other side. This is tunneling and it doesn't make a whole lot of sense to us because that's not how we observe things in our normal world. You don't go down a hallway and suddenly little Jimmy is just on the other side of the door because there was a chance little Jimmy was going to be there. That doesn't happen been in our real world but in quantum physics it's totes thing as one of the reasons why developing microchips was smaller and smaller components becomes a really. Lee huge challenge because electron tunneling is a problem if you're determined to channel electrons down specific pathways as is the case with a circuit then then you run into an issue if an electron can encounter a gate the gate is closed but because of electron tunneling there's the possibility of the electron appearing hearing on the other side of the gate. It means that you can create errors this way anyway. Let's get back to. GE's time line in Nineteen seventy eight GE's medical medical systems division developed an improved method for taking x Ray cross-section pictures which reduced the scanning time down to less than five seconds which was an enormous miss improvement. A huge leap forward in the patient's wouldn't have to sit still for as long to get a cross section x Ray done no. I'm reminded of a time when I had to get an x ray done. I was having a kidney stone and that was painful. It was so painful that just trying to stay still was a huge challenge for me and it was technology like this this breakthrough. I was just talking about that made. Those sort of x ray scans much faster much more efficient and reduce blurring learning so that if the patient were moving because the scanning took so so little time there was a better chance to get a nice clear picture otherwise obviously if the patient moves while the picture is being taken. You're going to get blur so I'm very thankful that GE was able to make xrays much more efficient and take less time. GE celebrated one Hundred Years of innovation in nineteen seventy eight which might be a little confusing at first because General Electric Company was founded in eighteen ninety a two not eighteen seventy eight however g also traces its historical roots back to an earlier company if you listen to the first episode you know about that Edison Edison Electric Light Company that one began in eighteen seventy eight according to time line on the GE website specifically timely that's on GE's website in India. Ah The company states that in nineteen seventy eight g became the first company to have received fifty thousand patents wow while the company continued to diversify versa Fai and work in various industries a big change was around the corner and that change happened in nineteen eighty one when Jack Welsh that chemical engineer I mentioned earlier would become on the company's youngest chairman and CEO he replaced the outgoing CEO which was a guy named Reginald h Jones welches tenure is an incredibly important one in the history of Ge so I figured it'd be good to get a little background on the man I he was born in peabody Massachusetts in nineteen thirty five. His father was a railroad conductor doctor. Jack Welsh would grow up in Salem Massachusetts and as a kid he loved playing sports he really loved winning and he despised losing that'd be a fundamental part of his character would carry over to his work at GE he received a bachelor's degree in chemistry from the University of Massachusetts at Amherst and he received his Masters and his PhD the University of Illinois Champaign upon graduating in got a job at GE and he worked in their plastics division and he nearly quit his job. Bob After just a short while he felt that jeeze organization was too cumbersome. Those filled with middle management positions bloated any felt his own work wasn't being valued valued properly but an executive named Ruben got off convinced Welsh to stay with the company so he did then he would end up leading the plastic division after working there for a while then he moved onto other executive roles he oversaw the chemical and Metallurgical Division <hes> then he headed up. Ge Strategic Planning then he became a sector sector executive for the Consumer Products Division and despite all of that he wasn't first and foremost in the minds of the board of directors who are looking to fill bill that position of of CEO when we come back. I'll talk a little bit more about how he got his position and what he did with it but first. Let's take another quick break. Support for tech stuff comes from our friends at rocket mortgage by quicken. Loans home is so much more than a house. It's your own little little slice of heaven. That's why when you find the perfect place for you and your family. Getting a mortgage shouldn't get in the way imagine how it feels to have an award winning team gene by your side through every step of the mortgage process. It's awesome and exactly what you get with rocket mortgage by quicken loans their team mortgage experts. It's is obsessed with finding a better way which means that their number one goal is to make the home buying process smoother for you in fact rocket mortgage gauges there with award winning client service and support every step of the way quicken loans has helped millions of Americans achieve their dream of home ownership and when when you're ready to purchase the home of your dreams they can help you to visit rocket mortgage dot com slash tech stuff and take the first step toward the home of your dreams equal housing lender licensed in L. S. consumer access dot Org number thirty thirty rocket mortgage by quicken loans push-button get mortgage. Let let me tell you about Pete who loved hockey and always wanted to play in the NHL Pete played since he was three and begged his mom to let him stay on the ice by some nights. What's he even slept in his hockey skates? Pete practiced and practiced until one day when he was forty-seven Pete realized he just wasn't that good so he threw his skates in the trash but then you heard how Gyco proud partner of the NHL good save money on car insurance so he switched and saved a bunch so it all worked out the Welsh was just one of seven people under consideration for the role of GE CEO in nineteen eighteen eighty one he didn't even have a formalized plan for where he wanted the company to go but he did have the determination to lead G to being the number one company in every every industry in which GE had presence this was enough to convince the Board to name him CEO and his first moves were really to streamline G. E. EH while he had risen through the ranks in his decades at General Electric. He still felt that the company was bloated that opinion had not changed even though he had gone from from being an engineer an executive at the time he assumed the position of CEO GE was a mega giant consisting of three hundred different different businesses and Welsh saw that as a problem because how could you focus and be the absolute best when your presence is spread so thin across so so many businesses and so began to consolidate departments he began to sell off divisions trimming the fat part of that meant laying off employees and Welsh did that too. He did that a lot by the mid nineteen eighty s just a few years after he had become CEO G had laid off around one hundred twenty thousand employees. This is hard for me to even imagine the town I grew up in has a population of around forty thousand people people today. Ge Laid off three times as many people as were in my home town. That's tough for me to even imagine the layoffs earned Welsh a nickname neutron jack because he was like a neutron bomb going off in the company he would eliminate employees while leaving the corporate assets intact the neutron bomb is thought of as the same thing so sort of bond that can kill living stuff and leave physical infrastructure untouched. Welsh hated did this nickname it was a pretty cut throat and brutal strategy but Welsh was pretty much demanding that approach he wanted to get l. of any business where g did not occupy the number one or number two spot in the industry. If G were further behind that he would rather ditch that part part of the business than to continue to just sort of muddle along made little sense he said to be in businesses were other companies could go to market selling stuff cheaper for them what it costs. Ge to manufacture those same things in the first place so he gave an example of this. He's talked about television sets in Schenectady New York. They were still making making television sets when Jack Welsh took over ge but Welsh said that Japanese companies were selling TV sets for less money to the final customer than it would cost ged manufacturer set so Japanese television set might sell for one hundred dollars and might cost one hundred ten dollars for GE to even make a TV set. There was no way to compete in that space and at all make a profit so it made no sense to keep the business he preferred focusing focusing the company's efforts on industries where they could outperform their competitors rather than remain in business just to have a foot in the door through eliminating divisions selling off businesses says an through laying off thousands of employees the company ended up saving a lot of money to the tune of billions of dollars and Welsh wasn't just it's going to sit on those savings he looked to reinvest in the company and as far that he was looking for a possible acquisition and decided upon an old familiar her name that name was RCA now if you listen to the earlier GE episodes or if you listen to my RCA episodes you'll remember that general all electric was one of the founding companies that created RCA in the first place G. E. was also the majority shareholder until it was compelled to sell off those tares of RCA along with the other founders this was because the United States government at the time had antitrust concerns about the radio industry will the merger of GE and RCA was a six point three billion dollar deal which was the largest in history at that point and Welsh took the same approach to RCA as he had to g e namely he began hacking away at businesses. He viewed as being distractions so within three years of this deal Welsh had reduced the number of RCA employees employees to half of what they once were he oversaw RCA selling off. Almost all of its businesses really only two remained. One was the defense it's business that RCA would do for the US military and also for NASA the other was the NBC television network so this was the time when GE would own NBC was the subject of the become a frequent plot point on the TV series thirty rock. It's also an RCA effectively just became name. It was no longer the company at once was so if you listen to the RCA episodes this is pretty much at the point where the RCA story ended working for a Welsh was really tough if you're really good at your job and your job was in a division that Welsh viewed as being central GE's mission. You had decent job job. Security Welsh had employees go through regular performance reviews and the employees who are in the top twenty percent would get bonuses. Those who are in the bottom ten percent were likely to get fired and holy cats did his strategy push. Ge To new heights the company became known as the House that Jack Built the stock price for GE rose four thousand percent meanwhile the company was still churning out innovations such as groundbreaking work and fiber optics and magnetic resonance imaging systems the company also launched the Consumer News and Business Channel or see NBC in nineteen eighty nine so it wasn't just a powerful company in industry. It was now also becoming a powerful media company one other area. Welsh pushed ge into to was financial services with GE capital. Welsh lead acquisition efforts to buy foreign banks and also would become a major insurance provider. These services were at the time remarkably profitable in fact. That's an understatement when Welsh took over Ge. The company's value was fourteen eighteen billion dollars by the time Welsh would retire in two thousand one. The company's value was in excess of four hundred ten billion dollars and a large part that was due to the profitability of the financial services during that time. Also we have to say that when this happened it was a brilliant move from a business perspective. I pushed G. E. new heights and it made Welsh a very wealthy man it would also end up being the major pain point for GE's several years later that I'm going to get to that in our next episode as it begins to play into the more recent allegations about GE and its accounting practices but before we get to those dark tidings let's finish up with some of the things that the company was doing under. Welch's command in Nineteen ninety-two. Ge through its RCA space division delivered the Mars Observer Server to NASA. It'd been seventeen years since NASA had sent a spacecraft to study Mars so the intent was to launch the Mars Observer and inserted into an orbit around the Red Planet. The Mars Observer had instruments meant to study the climate geophysics and geology of Mars. The launch went off beautifully on September Twenty Fifth Nineteen Ninety two the orbiter began its long journey to Mars that would take nearly a full year and on August Twenty First Nineteen Ninety three just a couple of days before the orbiter was meant to officially enter Mars orbit all communication was lost between the spacecraft and Earth Nasa Asa was unable to reestablish contact so the mission was ultimately a failure though NASA was at least able to learn some things through the process of sending the orbiter to Mars in the first place but none of the primary mission objectives were achieved in Nineteen ninety-six in another move to dominate media NBC and Microsoft Partner Partner to gather to launch the twenty four hour news channel Msnbc in Nineteen Ninety eight GE began to adhere to a quality control strategy called called six sigma which calls for fewer than three defects per million opportunities now to achieve that goal GE would spend millions of dollars on training winning and new production processes so it was a very expensive and time consuming effort but welches view was that it would ultimately benefit the company and resulted all in massive savings fewer defects would mean less waste the first product from GE to go through this process was a medical scanner called delight speed q x slash. I C T system in nineteen ninety nine G. E secured a contract with Boeing to build massive powerful jet engines for Boeing's seven seventy seven line of jets the company produced the GE Ninety family now. This is not the only type of engine used on a seventy seven. There's a whole bunch of different variations of the seven seventy seven and some of them use engines from other companies so it all depends upon the version of the seventy seven year looking at but it is the largest and most powerful jet engine produced to date in one thousand nine hundred ninety nine G. E opened a new research lab. This one is called. Ge Global Research. It's located in Bangalore India and this marked effort for gene do not just expand its overseas markets which it had been doing for the previous decades but also to attract new talent in the field of technology talent that wasn't just located in Europe or the United States in two thousand the company unveiled. DTM Twenty five hundred which is a power plant plant on wheels. It's a gas turbine. Generator that can supply twenty two point eight megawatts of electricity takes a couple of days to setup once it's on location and it's used for for lots of different purposes including a way to supply electricity to areas that have been affected by natural disasters gas turbines by the way work in a very similar way to jet engines. You've got a compressor that draws air into the engine the air gets compressed and that's what a compressor does and then enters into the combustion chamber where it combines with fuel from fuel injectors this mixture gets ignited and then it burns very high temperature generates high temperature high pressure gas the gas moves out of the combustion and chamber into a turbine section. That's where the guests can expand an escape and as it does though the force of that escaping expanding gas turns a turbine the Turbine Irvine does two things one that drives the compressor so it pulls in more air and thus keeps the process going as long as you have fuelled burn and it also spins a generator to create electricity atrocity. Jack Welsh plan to retire from GE in two thousand but one thing kept him around a little bit longer. That thing was a prize Welsh really really wanted for. Ge knows a company called Honeywell International now honeywell makes advanced electronics for the nation industry among other things and Welsh led a a forty billion dollar plus acquisition effort to get this company he knew that Honeywell had another suitor that of United Technologies Corporation and and he added a promise to honeywell that he would stay on with GE until this acquisition was complete he would delay his retirement until two thousand one so they decided they would pursue this acquisition deal and things were going pretty well. The United States seem fully on board but then you get to the summer of two thousand one and that's when European regulators realtors expressed concern that this merger would stifle competition in the industry Welsh reportedly reached out to US government officials to see if anything could be done to smooth things things out and get the deal approved this had the effect of royally ticking off those regulators and ultimately the European Union denied authorization for for this merger and the deal fell apart Welsh who hated losing lost this one the CEO Honeywell Michael Bonsignore was shown own the door not long after the deal was scrapped and Welsh would continue on toward his retirement. Jack Welsh stepped down as CEO of GE on September seven with two thousand one his replacement would be Jeffrey r immelt and just four days after immelt would take the helm of GE the terrorist terrorist attacks on the United States on September eleventh would change the company's course. We'll talk about how that happened in our next episode in the meantime meantime if you have a suggestion for future episode of text up whether it's a company technology just a concept in tech anything like that. Let me know you can send me an email. The addresses tech stuff at how stuff works DOT COM or pump over to tech stuff PODCASTS DOT com. That's we're GONNA find the archive of all of our past episodes all all one thousand one hundred sixty plus of them and you'll also find links to where we are on social media as well as a link to our online store where every purchase you make goes to help the show we greatly appreciate it and I'll tell you again. 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