GE's Greed.

This book makes a valuable contribution to our understanding of corporate America. Superbly researched and written, it could drive some readers to take a fresh look at stocks. I mean the old-fashioned kind, the kind consisting of a heavy timber frame with holes for confining the ankles and sometimes the wrists. Of whom? First, the czar of the world's most profitable corporation, the most successful, most admired big-business executive in America, a frequent White House guest of Ronald Reagan, a golfing partner of Bill Clinton, the father of corporate downsizing. Next in line, his hatchet-men, followed by bought legislators and scientists. Finally, idolaters--journalists, authors, business-school professors. To believe them, John F. Welch's General Electric brings only good things to life. Thomas F. O'Boyle persuades you that GE--Jack Welch's GE--brings bad things to life. In abundance.

Yet At Any Cost is no populist tract. The author, a longtime Wall Street Journal correspondent and now an assistant managing editor at the Pittsburgh Post-Gazette, draws stark contrasts between the many large corporations that prosper mightily with foresighted, rational and humane policies, and GE as it's been run for 18 years by a tyrannical, sometimes impetuous, surprisingly blunder-prone, and--above all--profit-obsessed chairman and CEO.

"I have done everything in my power to write a fair and balanced account of General Electric," O'Boyle writes. He succeeds at every turn, partly by providing insightful, textured context--historical, scientific, engineering, competitive, political, legal, ethical, personal. He enables readers to see things whole. Yes, the Justice Department obtained price-fixing indictments against GE's synthetic diamond business and the DeBeers cartel (it makes a fascinating chapter even if Justice lost in the end). Remember, though, that between 1940 and 1948, when Welch was a boy, the government had sued GE for antitrust violations 13 times. O'Boyle shows how Welch's obsession with profit, an ideology, really, translates into unrelenting, pitiless pressure on his executives to better last year's numbers every year. They must do this with "enthusiasm and gusto," real or feigned, because loyalty in Welch's GE runs only upward. Their heads are never far from the chopping block. They sometimes do terrible things. Could it be otherwise?

GE had 285,000 U.S. workers when Welch took over in 1981; it had 120,000 fewer by 1997. If his profit obsession means repeated wholesale downsizings, if these decimate communities (Schenectady, N.Y., lost 22,000 jobs; Louisville, Ky., 13,000; Evandale, Ohio, 12,000; Pittsfield, Mass., 8,000), if they wreck families, if they lead several workers to kill themselves (as happened in Erie, Pa., after downsizings eliminated 6,000 jobs), that's not "Chainsaw Jack"'s problem.

Contrasts: Motorola fires no employee with 10 years' service "without the explicit concurrence of the Chairman of the Board." Lucent Technologies was to cut 23,000 jobs when AT&T spun it off. Welch's counterpart, Henry Schacht, gave every worker 100 shares of Lucent stock at a discounted price. "He met with employees to listen to their concerns and address them," O'Boyle writes. "And the 19,000 jobs that were ultimately eliminated have all been regained." No one calls Schacht "Chainsaw."

If the profit obsession means lying to regulators about intentionally polluting the Hudson River with 1 million pounds of birth-deforming PCBs over a 30-year period, don't believe it: Jack says PCBs pose no danger to human health.

In 1992, the year before it sold its arms business, GE became the first major defense contractor to be indicted for defrauding the government. GE "pleaded guilty to four felonies, including money laundering and violations of the Foreign Corrupt Practices Act," O'Boyle writes. "It was the third criminal conviction on defense fraud charges since 1985, along with 13 civil settlements, giving GE the dubious distinction of [being the] leading corporate criminal among the Pentagon's 100 largest defense contractors." Gives you a comfy feeling about GE owning NBC, right?

GE's Kidder, Peabody illegally forced out 17 investment bankers because of age. The Equal Employment Opportunity Commission responded with the biggest age-discrimination lawsuit ever brought by the federal government against a Wall Street brokerage. "Let's not kid ourselves," Welch told The Wall Street Journal "[T]his is a kick in the teeth for those guys", "[T]hose guys"? One of "those guys", O'Boyle reminds us, was "Welch's close associate Mike Carpenter, who ran Kidder, Peabody and reported directly to him."

Welch got a comeuppance in July 1992. Rep. John Dingell, who had been investigating defense fraud for years, insisted Welch testify before his House investigations subcommittee. Welch came, kicking and screaming, big-time lawyers fronting for him. But Dingell compelled him "to acknowledge, for the first time and in a very public forum," that GE, as a Pentagon contractor, had broken the law, "and to, in effect, take responsibility for what GE had done."

From its beginnings in 1889, GE's glory was research and development for the long term. Lord, how it paid off--for the country, not just GE! Its R&D, well funded, done by great, respected--and trusted--scientists and engineers, produced a cascade of enduring, diverse inventions, four being "the first moving picture with talking sound, the first jet engine, the first synthetic diamond--and the first Children's Silly Putty."

Welch called R&D "Blue Sky" research. He cut it by nearly 20 percent in the 1990s. The way to go, he'd decided, was financial services, including snapping up distressed properties taken by the government from failed S&Ls. Contrast: Motorola first outpaced GE's R&D spending in 1993--and has added 43,000 manufacturing jobs since 1992. Siemens employs more than three times as many scientists and engineers as GE and is big on long-term R&D, as are Hitachi and Toshiba. All show impressive results.

But the move to financial services sent shareholder value soaring. GE's shares increased 1,155 percent in value in the 15 years starting in 1982; and in mid-1997 GE became the first corporation to be valued at more than $200 billion. By last July it was valued at $300 billion. It has earned more in single quarters than in all four quarters of 1980. Welch's investments in Washington lobbyists, lawyers and politicians have paid off handsomely, too. In 1980, GE paid $330 million in federal taxes; in 1981 it had a net tax refund of $104 million.

Many horrors--pre- and post-Welch--occurred at the GE-run Knolls Atomic Power Laboratory at West Milton, NY. GE allowed nuclear reactors to operate without emergency core cooling systems. One day, state regulators asked Knolls, with reason, to release no radioactivity into the atmosphere; it released 600 curies--40 times as much as Three Mile Island would release in 1979.

Knolls used radioactive fill for a parking lot. It illegally dumped radioactivity into the Mohawk River. It deposited 389 tons of radioactive and toxic wastes in thousands of steel drums, buried the drums at dozens of sites near the lab, and kept no records of what it had buried and where. It let plutonium-contaminated water seep into an office building and into the drainage system migrating toward the Mohawk. The Navy urged demolition of the building. It was brushed off.

Whistleblowers finally got the facts out. GE executives responded just as they did in numerous other horrifying episodes at GE sites elsewhere. Mostly in secrecy, they fumed, lied, and covered up.

A bumper crop of CEOs emulates Welch's bare-knucklism. O'Boyle argues that companies that make layoffs the "first resort" jettison not only people, but also "the old-fashioned business values that made this the American century--loyalty, trust, respect, teamwork, hard work, compassion." He has a point. But don't forget, say, the men in the good-old-days steel mills who worked 12-hour shifts six days a week and 24-hour shifts every second week.

O'Boyle asks, "Do companies have obligations beyond the bottom line?" His--and my--bottom-word answer: Yes.

MORTON MINTZ, author of At Any Cost: Corporate Greed, Women and the Dalkon Shield (1985), is a former Washington Post reporter and a former chair of the Fund for Investigative Journalism.