Jack Welch: Why financial services a 'changed game'

Former General Electric chief Jack Welch said Thursday the deal to break up the company he helped create was a smart move.

GE has a history of changing with the times, and last week's deal to retreat from financial services was just the latest example, Welch said in an interview with CNBC's "Squawk Box." He asserted that that's why the company will be around for "100 more years in the Dow Jones [industrial average]."

"The financial services game is a changed game," he added.

Last Friday, GE said it's selling the bulk of the assets in its GE Capital unit and returning most of those proceeds to shareholders in the form of a $50 billion share buyback.

As part of the plan, General Electric will sell off a portfolio of real estate assets, mostly to Blackstone and Wells Fargo. The total sales, including deals with other buyers, are worth $26 billion. (Check out Blackstone's real estate portfolio here)

Appearing on "Squawk Box" earlier Thursday, Blackstone co-founder Steve Schwarzman said the deal was helped along by his firm's past relationship with GE. "This is not our first rodeo together. So this deal doesn't come from outer space."

Welch said both Blackstone and GE were winners, and added that the overall GE reorganization to focus on its industrial core was the right move at the right time.

Read MoreBlackstone CEO on GE deal; strong quarterly results

"In 2008, the world changed. And Dodd-Frank changed it again. If you're sitting with a huge balance sheet of cash in financial services and can't lever it—not very pretty," the former GE boss said—referring to the restrictions on GE Capital as a results of being designated a systemically important financial institution by regulators after the 2008 crisis.

"It would be like saying ... 'Let's keep the buggy; forget these automobiles going down the road,'" he said. "The timing on this? As good as any, it's not going to get better for awhile I'll tell you that" because of tighter regulations under the Dodd-Frank rule.

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