Jack Who?

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For a guy taking over the reins from Jack Welch, one of the most acclaimed CEOs of the 20th century, General Electric's incoming chief, Jeffrey Immelt, 45, doesn't seem at all fazed. "Believe it or not, I know, operationally, how to do this job," says the towering, outgoing Immelt. He knows how to do a lot of jobs, having spent almost 20 years at GE. Most recently he ran its medical-systems business. "It's not like I have to go up on the mountain for 40 days and come down with a bunch of stone tablets," Immelt says.

On the eve of his ascendancy this Friday, when Welch, 65, will formally end his storied, two-decade run at a board of directors' meeting, Immelt was clearly rarin' to get started. At times, this sharp, self-deprecating Midwesterner could barely contain his enthusiasm, peppering his conversation with exclamations of "I dig it!" or "I'm all over that like a beast!" "Inside the company," he declared, as movers cleared out Welch's Rockefeller Center office to make way for him, "the transition's already over."

But outside the company, particularly on Wall Street, where GE stock has enjoyed a hefty Welch premium, Immelt knows it's just beginning. Following a successful CEO is never easy. Consider such CEO casualties as Coca-Cola's Doug Ivester and Xerox's Rick Thoman, who followed high-profile bosses--Roberto Goizueta and Paul Allaire--and barely got a chance to make a mark before the long knives came out.

It doesn't help matters that Immelt is starting his tenure at the end of an unprecedented bull market and in the midst of a global economic slowdown, when GE businesses from lighting and appliances to NBC are slumping and, some critics suggest, cash cows like power systems and aircraft engines may be peaking. Even the political climate has changed. In Europe, regulators scotched GE's proposed $43 billion deal with Honeywell (last week they moved on to Microsoft). In the U.S., the Environmental Protection Agency is forcing GE to clean up the mess it made dumping PCBs into the Hudson River.

GE has been the exception to the rule that conglomerates are clumsy beasts doomed to underperformance. In the two decades since he took the helm from Reginald Jones, another legend, the wiry, intense Welch, son of a train conductor from Salem, Mass., has turned a sprawling $27 billion-a-year industrial conglomerate into a $130 billion-a-year diversified dynamo that sells everything from aircraft engines, power turbines and CT scanners to life insurance, sitcoms, light bulbs and dishwashers. He exited businesses that GE couldn't dominate, from semiconductors to toasters, and earned the nickname "Neutron Jack" for his massive layoffs.

Welch wasn't perfect--retailer Montgomery Ward and brokerage Kidder Peabody were businesses that blew up on his watch--but GE stock has risen close to 4,000% and the company has consistently delivered 10% to 20% in annual earnings growth. Even during the current downturn, GE posted a healthy 15% rise in second-quarter earnings, though its stock has fallen 33% since its most recent high of $60 last August. No wonder, then, that as Immelt put it at the company's annual managers' meeting in Boca Raton, Fla., in January, "everybody at GE thinks they work for Jack; every customer of GE thinks they buy from Jack; every political person thinks they deal with Jack."