succeeding jack welch. jack ran the business.to me was one of the finest managers i've ever seen. he knew everything about his business when he had nbc and there was a problem with "seinfeld" jack parachutes in and talks to seinfeld every 90 days he'd meet with all the different 13 business segments and drill down, tell me about your people, tell me about who you're training to be leaders, tell me about your challenges with your customers, tell me about your r&d. >> he used to know the ratings of "squawk box" every day. that was a flea on the tail of -- >> but early on when i had my run in with spitzer, one day a got a memo the whole board got a memo in the memo jeff says he had discussed with me leaving the nbc seat of management, development and compensation committee because of the fact i was involved in a compensation issue, a stock exchange with spitzer. by the way, i'm still alive and walking around where's my buddy eliot spitzer i don't hear much about him anymore. >> right >> but anyway. i called him i said, i don't recal

old-fashioned manufacturing company that managed to outlive the golden era of manufacturing, partly by jack welchhlessly making it more efficient and adaptable, but also moved it heavily into financial services. after welch stepped down with the financial crisis, it became especially clear that was not a sustainable strategy. carol: how did we go from this company that has been around for 126 years that was so revered, we respected their leaders, they were examples of everything going on in the economy, to a company we are thinking, do we break it up? that is a big turn. drake: part of the reason it is so dramatic is ge was a company associated with things like the light bulb or the refrigerator, but the product that may be was most iconic was its managers. it was the famed factory for producing these elite, killer managers. in a way, that may have insulated the company a little from a certain kind of scrutiny and allowed it to not be as transparent as other companies. now, i think some of that is coming home to roost. julia: turning ge's troubles into a cover image was the job of the art directo

i think in my upbringing at general electric with jack welch, one year would be solid, two years prettyd three years is as far out as you go with all the extraneous things that could happen, global issues, political unrest, i think he's given himself some wiggle room. i think what's important is what's in front of us. what is going to happen in 2019 and so forth to. go out five, six, seven years is a bit of a stretch. liz: especially when you factor in -- you gave a litany of positives, less regulation, the tax cuts. >> yes. liz: higher interest rates coming, you could see it in the ten year right now. that is in part what spooked the markets that we have a 10-year yield at 2.94%. >> haven't seen that for years. liz: 4 1/2 years, now 2.95. in one hour, we jumped and it may not look like a big jump but for people following the bond market, it is enough. inflation possibility, the u.s. dollar weakened. >> yes. liz: slightly stronger today. couple of other things, so you've got him restricting immigration, which is also something he promised. just as more baby boomers leave the workforce.

$14 a share i can't believe, jack welch's head is about to explode right now, and it looks like the company has no other choice, at least when i've been talking to people, that possibly a major breakup into three different major subsidiaries and sell-off the rest. you know the market is really taking it out on ge right now. that is pretty amazing. liz: yeah. charlie: so that's where we are and it's ironic that jeff gets the job literally now to help at hena health deal with an activist. as you know, he was sort of prod ded out by an activist investor at ge, who has his board seat on ge, so that's an interesting situation but you know listen, the whole market is getting collapsed. i know what kevin brady just told you the jobs are coming flying back and everything else. maybe, but, you know, i think they will. i'm a tax guy but here is two things have you to realize. the markets don't necessarily believe this massive corporate tax cut is going to lead to greater productivity, much higher gdp and if they don't believe that you'll have a bigger deficit and much higher interest rate spikes. liz

industrial -- one of the greatest industrial businesses in the world that took place, you know, from jack welch's tenure, to jeff immelt in 2001, and really john is coming in trying to disentangle a giant conglomerate right down to the level of these liabilities still on the books it may not take the 40 years to create this mess, but it will take a couple years to wind it all down so i mean, if you really want to even some of these -- have exposure to the aircraft engine bess, power, whatever it is, there are a million places to go rob, you mentioned financial engineering with the undertone there's something wrong with it. companies every day engage in financial engineering, even if you're calling it a stock buyback program. >> you're not suggesting something illegal but something -- >> ftc coming out on friday night, but it's for the s.e.c. and regulate aror to figure on the there was something untoward i'm just saying they make unfortunate greatest products in the world. they are the leader with jet engines. they make incredible lock motives. the problem is you have this overlay of finance, whi

om: let's go to a jack welch r edux. you believe in pricing power in corporations. s which wal-mart rakes out and price dynamics as well. jack: i do think companies are starting to regain some pricing power. of course we have these secular dynamics going on in the background with amazon really not caring about what their price is. but all in all, i think a lot of that has played out. of course they're going to roll in the health care and roll into other things but by and large we are starting to see animal spirits as you described and pricing power on the corporate side. and we'll see if that flows through to some inflation later this year. francine: do you worry about the downturn, or overheating of the u.s. economy around the corner we don't have the tools yet to deal with? jack: i do worry about perhaps a mismatch between equity violations and earnings and dividends, particularly if we do start to see interest rates creep up. in terms of the business cycle, as long as we continue to run at potential g.d.p. which is about 2%, we have about 7% for labor force growth

you could use ge, but arguably with a different ceo, somebody could have run the company that jack welchlt. >> maria: another thing that acselaccelerates the divestmente activist. tryon was saying do this or do that. they got in at 25 or something. when you've got activists investing which has increased, that's going to put pressure on whether it's the new ceo or current management to do a divestment. >> that's absolutely right. that's one of the top five drivers in our study. >> maria: activist investment has risen. the activist fund hasn't been doing well the last he'l couple years. the prior two years, the activist funds did not perform well. >> absolutely. to your point, a lot of these divestments will be akin to the corporate strategy that's put into place by the c-suite. that can change, with a change in ceo, no question. >> we saw a lot of this in financial institutions after the crisis. what industries are and what sectors are you seeing it in now? >> we'll see it in four sectors in the coming year, in the coming two years. life sciences, consumer products and retail, technology,

. >> it wasn't a problem with company that jack welch built it was the man who it was handed off to runs a -- again, a debacle from beginning to end. >> that was big mistake cheryl thank you we'll be right back. i needed legal advice for my shop. that's when i remembered that my ex-ex- ex-boyfriend actually went to law school, so i called him. he didn't call me back! if your ex-ex- ex-boyfriend isn't a lawyer, call legalzoom and we'll connect you with an attorney. legalzoom. where life meets legal. each day our planet awakens but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. maria: welcome back, what a day for team usa winter olympics the highlights now good morning. >> check this out span of this hours, team usa won nine metals 38 years to day gold if olympic hockey women's usa gepz canadian am

knew him was jack welsh's predecessor reginald jones told me when they bought utah international which was the largest purchase in ge's history at the time under jones. the press was chasing welchthe men's room for comments. he said i won't comment on a predecessor. the company is moving forward. buying utah international was the right thing to do. the retro speculation isn't helpful. some big mistakes were made. also should be pointed out people waving the white flag of heroism when having seen this are restating history. in particular, nelson pelts bought $2.5 billion in stock of other people's money in ge at $25, $26 a share it's $14. >> they are under water now. >> when he bought it he said we should not break anything up this is the right vision this is a $44 stock. >> he has a director on the board now. we were talking about utx an hour or so ago i think you asked the question about deconglometerization is that era coming to an end >> it was a huge problem none of those would last the test of time the old itt. >> is it coming to an end because they don't work or because investment bankers see money in breaking them up? 25 years from now, you can bet your -- pardon me -- y