Comparing Elon Musk and Jack Welch as Influential Cost-Cutters

ImageA tale of the cost-cutting tapeThere’s no disputing that Elon Musk is one of the leading businessmen of our era.He has a net worth of around $400 billion these days and leads prominent businesses including Tesla, SpaceX, X, Neuralink and xAI.

And he has become known for moving fast, cutting costs and pushing the workers who remain beyond what they thought possible.In many ways, that recalls a previous titan of industry, Jack Welch, who 25 years ago was considered the greatest businessman of his generation.It raises an intriguing question: Is Musk as influential a business leader as the former General Electric chief? Are the two men even comparable?By some lights, the two aren’t remotely the same.

Welch was no entrepreneur but instead was the ultimate corporate chameleon, the son of a train conductor who started his career in G.E.’s plastics division and spent his whole career at the conglomerate.Musk, on the other hand, hailed from a prominent South African family, before emigrating to Canada and then to the United States as a serial entrepreneur.And while the two were both politically conservative, Welch was more of a country-club Republican, partial to golf and no fan — at least earlier on — of Donald Trump.While a savvy political operator, Welch was unlikely to have decamped to Mar-a-Lago to personally and intensely cozy up to the president-elect, as Musk did.

(In 2016, Welch withdrew his support for Trump as the Republican presidential nominee, writing on social media, “Unfortunately, wrong messenger…Party must change nominee now.”)But the two shared a common business philosophy: Cut as much fat as possible.Welch believed G.E.had become too bureaucratic and bloated.

He slashed billions of dollars in costs, and prided himself on weeding out employees who just weren’t making it.He became an apostle of the Six Sigma approach, inspiring other C.E.O.s.

Corporate profits — and G.E.’s stock price — exploded under his watch.We are havin...