PhillyDeals: Remembering other weak-market times

General Electric Co. used to build turbines, satellites, and appliances at factories around Philadelphia. Now it makes water-treatment systems, medical devices, and loans here.

That's the legacy of Jack Welch, who restructured GE as chief executive officer in the '80s and '90s. It was painful for thousands who lost their jobs, and highly profitable for Welch, as he made GE the most valuable company in the world, for a time.

Those bull-market days seem a little remote, Welch told me yesterday, as he joined his wife, Suzy, on a stop in Philadelphia to promote her self-help book, 10-10-10.

The weak business climate of today reminds him more of the jolt he received after a summer 50 years ago as an intern at Sunoco Inc.'s Marcus Hook refinery. He played a lot of golf, ate a lot of hoagies, and flew away on a lot of job interviews with his girlfriend. Then he learned that his Illinois M.B.A. on top of his Massachusetts engineering degree did him little good as industrial jobs dried up in the late-1950s recession.

"We couldn't get hired in a grocery store," Welch recalled. He went back to school for his engineering doctorate, which he says put him on the road to the top job at GE, a course he suggests for present-day graduates, if they can afford it.

Suzy Welch, his third wife, tells the story of their meeting in her book: She was editor of Harvard Business Review, interviewing him for a profile. He ordered her to turn off her recorder, one thing led to another, and a few years later they're finishing each other's sentences in front of Maria Bartiromo on CNBC, one of Welch's old properties.

Mostly, the book is about Suzy's decision-making method, which involves considering the consequences - in 10 minutes, 10 months, and 10 years - of life's choices. On Philadelphia radio yesterday, they analyzed occasional Inquirer columnist Michael Smerconish's decision to pose naked in a magazine. Probably a good move, Suzy decided.

"Of course it works for business," Suzy says of her method. "What really matters to me as I build a career?"

Personnel managers, she says, can "use it for hiring and firing."

"I think it works really well for personal relationships," says Jack. "Family. Romance."

LLR Partners Inc., a $1.4-billion-asset Philadelphia private-equity firm, said yesterday that it would buy I-many Inc., of Edison, N.J., a Nasdaq-listed provider of contract-management software, for $23.3 million, or 43 cents a share, plus I-many debt of $17 million. Expect more penny-stock companies to be taken private by cash-rich investors such as LLR.

Pennsylvania Treasurer Rob McCord says he's got a proposal to ease the shortfall in the state's Guaranteed Savings Program, for citizens who prepay their children's college tuition.

The program has turned $1.3 billion in stocks and other investments into just $1 billion. How will the state make good its promise to turn a parent's savings into a child's tuition at Pitt, Villanova, or Slippery Rock?

McCord wants to invest some of what's left in Term Asset-backed Loan Fund (TALF) securities - loan-backed bonds that feature federal guarantees against eventualities such as large losses, discount prices, and modest yields. Plus, there is the prospect of "double-digit" returns as loan values rise when the market recovers, McCord said.

McCord also likes TALF as an investment for the State Employees' Retirement System (SERS) and Public School Employees' Retirement System (PSERS), which pumped billions into "alternative assets."

McCord praised the SERS board's decision yesterday to cut its long-term annual return target to 8 percent from 8.5 percent - an admission that the fund's liabilities keep rising faster than its assets.

Even with TALF and other new investments, "2009 is not going to be a good year at the pension funds," McCord warned.