As an early-morning haze lifts off a golf course on Nantucket Island, Mass., Jack Welch slices a long practice drive off to the right. "Terrible," he gripes in his tight Yankee rasp. "No rhythm, lousy finish." Another swing, another slice. "Let me get steady here and drill one." As his wife, Jane, looks on, Welch steadies his Great Big Bertha club head, coils into a backswing and uncorks a 230-yd. rope. "You can learn a lot about a guy on the golf course," says Jane, winner of five women's titles herself. Her biggest lesson: "I don't like to compete against Jack."

An entire generation of corporate titans knows the feeling. In 20 years as chairman and CEO of the General Electric Co., Welch, 65, who retired Sept. 7, transformed an aging, bloated bureaucracy into a nimble, voracious behemoth that sells airplane engines, provides mortgages and runs a television network. Tirelessly buying and selling businesses as he re-created GE, Welch also turned it into the world's most valuable company: Its stock price soared 3,000 percent during his tenure, with an annual growth rate some 50 percent higher than that of the S&P 500. "Jack," says Disney chairman Michael Eisner, "probably created more value for shareholders than any other CEO before him." His ravenous dealmaking, fierce curiosity and obsession with training leaders led FORTUNE to name him Manager of the Century.

It hasn't been a free ride. In the early '80s Welch (who last year earned more than $76 million) was dubbed Neutron Jack for cutting nearly 120,000 jobs—about 25 percent of GE's workforce. On the personal front, he endured a divorce and two heart attacks and admits he could have been a better dad to his four children. Now he's making time to caddy for grandson Jack, 8, and cozy up in front of chick flicks like Bridget Jones's Diary with Jane, 49—and bidding farewell to 65-hour workweeks and 365 hours a year in corporate jets. "I won't miss it," he says at breakfast on the golf-club terrace, not far from his airy, shingle-style vacation home on 11 acres.

That's hard to imagine, given how he was consumed by the top job for two decades. "Jack loves hand-to-hand combat, loves being challenged," says journalist Ken Auletta, who chronicled GE's 1985 deal to buy NBC parent company RCA in his bestseller Three Blind Mice. An audience with Welch, he says, was never dull: "He'd get up, circle the table and say, 'C'mon, fight with me, let's go at it. That's crap, you turkey.'" Even GE's new CEO, Jeffrey Immelt, 45, says working for his ex-boss ranged from "fun" to "terrifying." Guided by a scientist's hunger for hard data and a gambler's daring, Welch is widely credited with redefining corporate leadership for the 21st century. "The moves he's made, his slogans, his Welchisms," says Prof. Michael Useem of the Wharton School of Business, "have become the coin of the business nation."

It's a lingo Welch speaks fluently in Jack: Straight from the Gut, his autobiography from Warner Books (a division, like PEOPLE, of AOL Time Warner). Last month, Jack became an instant No. 1 New York Times bestseller despite the cancellation of his book tour, which had kicked off on NBC's Today show barely one hour before the Sept. 11 World Trade Center attack. Welch was feeling "high as a kite" about his book launch as he neared CNBC's newsroom in NBC's Rockefeller Center studios for a 9 a.m. segment. Then he froze beneath a bank of monitors showing live WTC coverage—and, he says, "ended up just crying like a baby." As for the memoir that had obsessed him for a year, "it just evaporated from my thoughts. It seemed meaningless." Two weeks later Welch was back in New York City, still deeply shaken. "I walked into St. Patrick's Cathedral," he says, "knelt down and said prayers for 10 minutes. I haven't done that, I have to admit, in a decade." Welch, who long ago earmarked his $7 million book advance for charitable causes, is creating a $1.1 million college scholarship fund for children of lost firefighters and policemen. As for the attack's effects on the U.S. economy? He forecasts a quick recovery: "We'll have a tough two to three quarters, but we have the fiscal and monetary tools to fix this. A year from now, we're going to be feeling awfully good about the economy."

Welch is accustomed to weathering economic storms. In his final year at GE the company's stock price dipped by one-third, and his $45 billion deal to buy aerospace-and-chemicals giant Honeywell International was nixed by European regulators. In August the Environmental Protection Agency ordered GE to dredge a stretch of the Hudson River in Upstate New York contaminated by PCBs, carcinogenic compounds that GE dumped from two plants for decades. The bill: $460 million. Welch has long held that PCBs are safe and that dredging would do more harm than good—a view Judith Enck, a state environmental-policy adviser, calls "delusional." Welch isn't always fond of critics. At a 1998 shareholders meeting, an activist Dominican nun, Sister Pat Daly, compared GE's health threat denials to Big Tobacco. "He went nuts," she recalls. "He interrupted me and said, 'Sister, you owe it to God to start telling the truth.'"

There is more consensus on the rich chemistry Welch whipped up inside GE. "We made a big company informal, got lots of people in the game," he says proudly. "Armies of people have had lives and dreams they never thought they'd have."

He can count himself among them. John Francis Welch Jr. was born on Nov. 19, 1935, in Peabody, Mass., the only child of John Sr., a commuter-train conductor, and his wife, Grace. "I wasn't born with a silver spoon in my mouth," he writes in Jack. Growing up in working-class Salem, Welch was "the littlest guy" among his gang of street-jock pals, recalls classmate Bill Cullen. "You had to fend for yourself." With John Sr. often away, it was Grace who drove young Jack to church for altar boy practice or to Fenway Park and the Boston Garden to see his sports heroes, and who instilled the scrappy confidence that helped him overcome a childhood stutter. When she died of chronic heart disease at 66 in 1965, Welch was devastated. Warner Books CEO Laurence Kirshbaum, who spent days with Welch fine-tuning the manuscript at his GE office in Fairfield, Conn., says, "I often had the feeling that Grace was in that room with us, that she's the one person whose approval he still seeks. The only time I ever saw a sheen of moisture in his eyes was when her name came up."

Welch, who played hockey, baseball and golf, graduated from high school in 1953, earned an undergraduate degree at the University of Massachusetts and then a Ph.D. in chemical engineering at University of Illinois. There he met fellow student Carolyn Osburn through a mutual friend at a bar. They wed in 1959, and the following year Welch joined GE's Pittsfield, Mass., plastics division as an engineer. He helped bring a new heat-tempered plastic to market, and within eight years was GE's youngest general manager. By 1971 he was a vice president heading a $400 million division. "Jack was a loose cannon and he hated bureaucracy," says Noel Tichy, a University of Michigan Graduate School of Business Administration professor who in the '80s ran GE's management training center. "He said, 'If I ever get to be CEO, I'll kill this whole strategic planning process because it's all BS.'"

By 1981, new chairman Jack was rocking GE's boat—and throwing some of its 410,000 employees overboard. He fired all but six of 200 strategic planners, ordered CEOs to "fix, sell or close" any business not ranked No. 1 or 2 in its industry and annually ax their weakest 10 percent of performers. Charges of heartlessness stung, but Welch says the cuts helped GE survive Japan's consumer electronics juggernaut. "Today," he says, "we do six times more business with 25 percent fewer people." Not that he savored the layoffs: "Doing it was painful. Having to do it was what I was paid to do."

Welch himself paid a price for his withering drive: He and Carolyn divorced in 1987 after 28 years. "I became Mr. Bigshot. Different life. Another planet. And she didn't like the planet," he says. The divorce gets only a half dozen lines in his memoir. (Remarried, Carolyn lives in Florida and Martha's Vineyard.) Even as father to their children—Katherine, 40, and John III, 39, who both work in finance; Anne, 37, an artist; and Mark, 33, a Montana carpenter—Welch expected peak performance. "I was," he says, "too much on the critical side, on 'Let's get A's' and not enough on the cheerleading side."

In 1987 a GE board member and his wife fixed Jack up with Alabama-born Jane Beasley, then a 35-year-old New York securities lawyer. Their double-date dinner was, he recalls, "awkward." But a first date à deux at a Manhattan steakhouse sealed the deal, says Jane. "I could see who he was then." She got a better look on their first Nantucket weekend when Welch split at 8:30 a.m. for golf with the guys. "I told him, 'If you're gonna play golf, I'm gonna play golf, 'cause we're not gonna do this.'" Welch said she was too old to learn. "I said, 'Get me some clubs, let's go.'"

Friends agree their April 1989 marriage was a perfect merger. "It would be easy to get swallowed by Jack the business icon," says Today host and golf buddy Matt Lauer. "Jane is his equal. She doesn't let him get away with anything." Teaches him a few things, too. Jane, who had quit her firm in 1988 to travel with Jack, introduced him to the Internet ("He thought it was a computer game") and to chat rooms, where he read company gossip about stock splits, succession—and Chairman Jack himself: "He was fascinated that you could just eavesdrop to your heart's content on people talking about GE."

In 1995 he really gave them something to talk about when, having battled angina for years, he had two angioplasties, suffered two heart attacks and finally underwent a quintuple bypass. Before surgery at Boston's Massachusetts General Hospital, an uncharacteristically nervous Welch phoned Disney's Eisner, who in 1994 had undergone a quadruple bypass. "I was shocked," says Eisner. "This was not Neutron Jack calling, not 'CEO of the Millennium' Jack calling. He wasn't embarrassed to ask the questions anybody would ask: 'Was it painful? What was the anesthesia like? What's it like when you have that thing in your throat?' He was totally vulnerable, and I took him through it all, needle by needle." Still, his old toughness kicked in. The night before the bypass, Welch told Jane that if he lapsed into a coma, "don't let them even think about pulling the plug. I'll be in there fighting like hell to make it."

These days, Welch, whose dad died in 1966 at age 71, isn't about to confuse retirement with retreat, especially from his roots. He plans to log more family time, particularly with his eight grandkids ("I like hanging out with them"). He scribbles notes to old buddies, flies them to sports events and never misses high school reunions. "He walks in to see the old gang," says Bill Cullen. "He doesn't flaunt anything, never flashes money." When Salem High needed lights for night football, he delivered. "The poles and lights came up," says Cullen, "and we had a game." And the hardware? "Jack didn't get it from Sylvania. "

Welch stays lean and energized with golf and treadmill workouts at home. He avoids burgers and fries, takes his Belgian waffles with no butter and his daily turkey on rye with mustard, no mayo. "He's extraordinarily disciplined," says Jane. "He gets meatloaf and mashed potatoes on his birthday." Since the bypass, Welch, who close friend Anthony LoFrisco says once "couldn't tell flat beer from wine," now pours pricey French vintages, which he and Jane sip with popcorn while watching old-movie rentals. A recent favorite was Notting Hill. "Jack loves sappy romantic comedies with happy endings," says Jane.

Maybe so. But his idea of a good time seems more like The Fast and the Furious. "We were riding these all-terrain vehicles last year in [the Mexican resort] Cabo San Lucas and goin' like hell," Welch recalls, voice racing, blue eyes lit with mischief. "I rammed into Jane's ATV, went over the top, landed right on my head and knocked myself out. I came to, got up and drove off. I was fine."

Financially, Welch has landed on his feet—with an $8 million annual pension and a nest egg worth more than $500 million. Besides, his idea of retirement now includes a one-year contract as adviser to a buyout firm and plans to be "a CEO's quiet partner" at several other firms. Welch has rented an office suite near Fairfield, and he can also do his freelance work from his three homes (the Nantucket golf retreat; a stucco, Caribbean-style oceanfront home in North Palm Beach; and a Georgian-style brick home in Connecticut). Of course, if the road beckons, he'll have use of GE planes for life (he last flew commercial in '77). For now, though, America's former 12th-highest-paid CEO is taking delight in simpler perks. Welch gets excited just by no longer having to set his alarm for 5:30 a.m. "Some mornings," he says, "I'll do nothing for a change. Go out and get four papers, sit in the living room and have no place to go, nothing to do. That's kinda neat."