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What it argues
Lights Out chronicles the destruction of General Electric under Jeff Immelt, who took over from Jack Welch in September 2001 and left in 2017 having overseen one of the largest collapses of corporate value in American history. Thomas Gryta, who covered GE for the Wall Street Journal, and Ted Mann, a colleague, spent years reporting the story. The book is the most comprehensive account of how an institution once regarded as the gold standard of American management went from a company worth $600 billion to one that was removed from the Dow Jones Industrial Average.
The central argument is not that Immelt was incompetent — he was not — but that he inherited an organization built on financial engineering, accounting illusions, and a culture of performance pressure that made honest assessment nearly impossible. Jack Welch's GE Capital, which generated roughly half of the company's earnings in the late Welch years, was essentially a large and opaque financial institution attached to an industrial conglomerate. When the financial crisis hit in 2008, it nearly took the whole company down. Immelt spent the next decade trying to pivot GE back to its industrial roots while concealing, deliberately or otherwise, the depth of the structural problems he had inherited and created.
What it gets right
- 1.
GE's decline was not primarily caused by Immelt's decisions but by structural problems — overleveraged financial operations, opaque accounting, and a culture of deference to authority — inherited from the Welch era.
- 2.
Earnings management, when practiced over decades, creates organizational habits that make honest assessment of the underlying business almost impossible to transmit upward.
- 3.
GE Capital was a hidden financial institution generating earnings that disguised the weakness of the industrial businesses; when financial engineering stops working, there is nothing underneath.
What it covers
Who wrote it
Thomas Gryta is a reporter at the Wall Street Journal who covered General Electric for years, tracking the company's decline and eventual restructuring. He shared a Pulitzer Prize in 2019 as part of a team reporting on opioids and the pharmaceutical industry. Ted Mann, his co-author, is also a Wall Street Journal reporter who covered GE's power and aviation businesses. Their reporting on GE over several years provided the primary source material for Lights Out, published in 2020. The book drew on hundreds of interviews with current and former GE executives, board members, and investors.
