Former General Electric CEO Jack Welch epitomized the ultimate corporate globalization mentality when he declared in 1998: “Ideally, you’d have every plant you own on a barge.” The idea was to abandon existing workers as rapidly as possible in search of the lowest possible wage and maximum control. GE’s prominence always guarantees it the ear of the president. Current CEO Jeffrey Immelt is a member of President Obama’s “kitchen cabinet,” the advisory board set up to “provide an independent voice on economic issues” and offer “independent advice to the President as he formulates and implements his plans for economic recovery.”
But Immelt sounds progressive compared to Welch. In one speech, Immelt declared, “Our competitive edge has slipped away and this has hit the middle class hard.” He has called for 20 percent of U.S. employment to be in the manufacturing sectory, and believes the country needs to reduce its reliance on financial service to drive economic growth, Reuters reported.
Restoring America’s productive base by doubling the share of the workforce in manufacturing? Bringing jobs back home? Reducing the role of the financial sector, which brought on the Great Meltdown of 2008? Has AFL-CIO President Rich Trumka been secretly writing Immelt’s speeches and then hypnotized him to deliver these ideas?
Not exactly, if one is to judge by GE’s performance since Immelt joined Obama’s 15-member advisory panel, only two members of which are union leaders. Since approximately half of GE’s revenues come from GE Capital, its financial arm, it managed to receive a huge amount in TARP funds.
Immelt also came out against putting a cap on CEO pay for bailed-out firms, arguing that astronomical CEO pay is crucial to retain the best talent: “It’s in the best interests of taxpayers to have Jamie Dimon running J.P. Morgan,” said Immelt. “They should want to have the best people out there running these banks, and I’m not sure capping pay is the way to do that.”
Immelt himself hauled in $9,280,935 in total compensation.
SCORCHED EARTH FOR GE PLANTS IN U.S.
Moreover, despite his rhetoric Immelt has continued with Welch’s scorched-earth policy for industrial America and maintained the strategy of off-shoring jobs to repressive low-wage nations like China. “In 2002, Jeffrey Immelt, GE’s chairman and CEO, told investors that he planned “to have $5 billion in sourcing from China” by 2005 “
Just since his appointment to Obama’s kitchen cabinet earlier this year, Immelt has been busily contributing to economic recovery: GE has closed at least 18 plants that once employed some 10,000 U.S. workers, according to Chris Townsend, political director of the United Electrical workers union, who has been tracking the shutdowns.
Mike Elk of the Campaign for America’s Future explores the vast gulf between Immelt’s rhetoric and GE’s record:
“This country ought to be, and we can be, not just the world’s leading market but a leading exporter as well. GE plans to lead this effort,” Immelt told the Detroit Economic Forum [sounding a lot like Obama’s recent and dubious call for doubling US exports via trade deals with governments as murderous to unionists as Colombia’s]
Immelt should heed his own advice. While Immelt was calling for manufacturing to stay in the U.S., his company was at the same time shipping manufacturing jobs overseas by canceling an order with an American-based wind turbine maker, ATI Casting Service in LaPorte, Ind., so that GE could instead buy the parts from a factory in China.
Recently, ATI made $30 million worth of investments to buy, convert, and modernize a shuttered factory in economically ravaged Michigan so the company could provide more parts to GE as the green economy expands with federal stimulus funding. But a Chinese firm underbid ATI, and the factory faced having to lay off 302 union workers and shutter the plant.
In an aggressive bid to keep the factory open, ATI offered to match the price of the Chinese producers. GE once again said they would prefer to buy from China. The ATI plant is now closed, the jobs gone.
After Immelt pledged to create jobs in America, for him to make a U.S. company shed jobs so GE can buy Chinese goods for the same price is beyond hypocritical.
More troubling is the fact that President Obama is receiving his economic advice from people like Jeffrey Immelt….. “This is an unacceptable example for the country and the promise that the ‘green’ economy will lead to a manufacturing revival,” said Leo Gerard, president of the United Steel Workers.
Gerard has accused Immelt of being a hypocrite, not just for undermining ATI, but for doing so while raking in millions of dollars in federal stimulus money intended to support a “Buy America” strategy.
The UE’s Townsend, like Elk, is deeply distressed by Obama’s reliance on a job-destroyer like Immelt for advice on rebuilding the U.S. productive base. Townsend worries:
Either Obama is either ignorant about manufacturing’s central role in sustaining working families in the U.S., or [he] subscribe[s] to the conventional wisdom that U.S. manufacturing jobs are doomed, no matter what. In either case, he’s shown a total failure to lead any kind of campaign to defend the manufacturing sector.”