How does the Kidder, Peabody story fit into the overall GE Capital narrative?
O Boyle: Kidder, Peabody was a finance operation that GE purchased in 1986. It was a prime example of failure under the Welch era. It was mainly a brokerage business run under GE Capital. They had huge losses in the mid-1990s through a bond trader by the name of Joseph Jett who made trades that turned out to be falsified and cost GE huge write-offs. The point I tried to make in the book is that the reason this was not discovered more quickly is that people wanted to believe that Joe Jett was doing as well as they thought he was, because he propped up earnings and he was part of turning Kidder, Peabody around in a way that Welch wanted. Joe Jett was extolled by Jack Welch at meetings because he was an aggressive pursuer of profit and seemingly was getting it until everything fell apart and GE had to make $350 million in write-offs. That was a pretty big black eye for Welch and GE s shareholders. MM: To what extent is GE currently involved in military-related business? O Boyle: Not so mu
