This is a partial transcript from Your World with Neil Cavuto, October 9, 2003, that was edited for clarity.

Watch Your World w/Cavuto weekdays at 4 p.m. and 1 a.m. ET.

NEIL CAVUTO, HOST: In the movies, he’s a one-man killing machine. He does the killing, he goes after the bad guys, and no one helps him. Oh, if life in Sacramento (search) were so simple.

Now, judging by the mess there, Arnold Schwarzenegger (search) could be using a lot of help there. And who knows baptism by fire better than my next guest? Joining me now, the former chairman and head of General Electric, author of Jack: Straight From the Gut, which is now out in paperback, one of the best business selling books of all time.

Good to see you. Jack. Thanks for coming.

JACK WELCH, FORMER GE CHAIRMAN & CEO (GE): Thanks, Neil. It’s great to be here.

CAVUTO: All right. You’re Arnold Schwarzenegger. You’ve got to talk to the press today. You’ve got to spell out your team. What have you got to do?

WELCH: Well, I think he has to continue this incredible momentum he has going. He’s got this positive attitude. He’s got to spell out the beginnings of a vision. He’s going to pick a team today. Let’s hope he picks a blend of young, bright stars, along with some graybeards, but a healthy blend of both.

He’s got the things you need in this job: the communications skills, the charisma. He’s also got the self-confidence. He is comfortable in his own skin. So he should pick great people, and I’m confident he will. I don’t know who he’s going to pick today, but I think he’ll pick a real great team.

CAVUTO: I remember studying you when you took over a company called General Electric. You seemed pretty comfortable in your own skin, and you had a Herculean task ahead of you. You had to right a ship that had gone wayward. Now, in a political sense, this is what Arnold Schwarzenegger faces. What’s the first thing you would advise him to do?

WELCH: Well, I think he’s got to quickly get out with a vision, what he wants to do. There are so many opportunities here with the taxes and with the other things that he ought to sweep out the old gang.

CAVUTO: But there’s only so much he can do as governor. You could sweep out a gang because you...

WELCH: No, he can get rid of some of the staff for sure.

CAVUTO: Yes. Well, that’s a given, right? You get rid of the staff.

WELCH: Gone.

CAVUTO: Yes. OK.

WELCH: And then he’s got to get rid of as much as he possibly can that represents the Gray Davis era, as much as he possibly can. And he’s going to. He’s already done it. He’s going to lay out what he sees as the way out of this mess, and over the next 60 days, he’s got to put together a series of people actions, initiatives that support that vision, and that’s the game. And just stay on point.

CAVUTO: What if he veers back from the pledge "no new taxes"?

WELCH: I don’t think he will.

CAVUTO: Well, what if he says, all right, I’ve got an $8-billion to $10-billion gap, depending on what figures you buy, and there’s no way of closing it just shutting down programs.

WELCH: He’s going to have to shut down programs.

CAVUTO: Really? So you would say to turn back on that would be a mistake.

WELCH: Deadly!

CAVUTO: Yes.

WELCH: Deadly. I think he’ll have a three-year term.

CAVUTO: Yes. What do you make of just what he brings to the job? You know, a lot of people say he’s a puffed-up actor, a little more, not much brain power. They’re already disparaging him. They’re saying that, look, this is a fluke. The Republicans stole this, and you’re just a three-year scarecrow.

WELCH: They said that about Ronald Reagan. The first day he was announced, younger friends of mine said, there’s the governor. I share a bunch of kids now, and they’re now talking the governator. The language is all going. This guy’s got more than just that. This guy is like the Beatles. I mean he is really star quality, beyond what I imagined.

CAVUTO: Do you think that’s important in politics and in business, that you have this ability to sort of wow people?

WELCH: I think it’s more important in politics than it is business. I think you have to touch broader audiences that you don’t get the exposure to in as much detail, but I think that this guy’s going to deliver. Let’s not go beyond that, but…

CAVUTO: Yes. How soon does he have to deliver? His critics are saying he has 100 days to do something dramatic. Is it that bad?

WELCH: Well, I think you get pretty old in politics if you don’t.

CAVUTO: Yes.

WELCH: But he’s not going to solve the problem in a hundred days, but he’s can lay out a vision, and this is a guy that’s a lot of capital going for him. He also has a very smart wife.

CAVUTO: Yes.

WELCH: I mean his wife is a real asset. She’s a terrific woman.

CAVUTO: You would know her from NBC.

WELCH: Yes. I think she’s a fabulous woman.

CAVUTO: OK. Let me ask you to switch gears, if you don’t mind. I want to get your thoughts on the Vivendi-Universal (search) deal.

WELCH: Yes.

CAVUTO: Would you have signed on to that?

WELCH: Absolutely.

CAVUTO: Really?

WELCH: You know, everyone says Jack never wanted a studio. Well, Jack couldn’t get in the business. I tried to play with Ted Turner. And Bob Wright and I spent a lot of time in Atlanta with him, and he wanted to buy us. So that was the wrong way. I spent a lot of time with Michael Eisner, and he was more the one to take control. I never had a chance to get control.

CAVUTO: But the talk was that you didn’t really want to try that hard.

WELCH: But what was I going to get, Neil? I wasn’t going to get two cable channels. So, if you look at what they’re getting, they are getting cable channels, they’re getting a lot of franchises, they’re getting a big library, and the studio volatility now can be managed within the size of NBC now.

CAVUTO: Yes. Will any of this improve the fortunes of the existing NBC channels?

WELCH: I think it gives them clout. Distribution’s a big deal. When you go knocking on those boys’ door, the boys say, you know, what have you got? Well, I’ve got a bunch of stuff now. I’ve got MSNBC, I’ve got CNBC, I’ve got Bravo, I’ve got...

CAVUTO: Do you like MSNBC, by the way?

WELCH: Why do you say things like that?

CAVUTO: I’m just curious. That’s all. Just curious.

WELCH: I think I’ll pass on that one. I like some of the shows. I think Chris Matthews has a great show. I think Brian Williams’ news is good.

CAVUTO: What do you think of the business show on Fox?

WELCH: Well, I like the guy who’s anchoring it.

(LAUGHTER)

CAVUTO: All right. Is that self-serving or what? Jack Welch, always good seeing you, my friend.

WELCH: Thanks, Neil.

CAVUTO: Take care of yourself.

WELCH: Great to see you.

CAVUTO: All right. The former chairman and CEO of General Electric John Welch.

Well, we tried. All right. He’s always a good sport about it.

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