GE's Immelt Blames at Home, Employs Abroad
General Electric announced this week it will relocate its X-ray business to Beijing in order to capitalize on the burgeoning Chinese health care market.
Bravo for them. Kudos. I’m sure it’s a smart business move for the company – just like not paying taxes in the U.S., rent seeking for “Green” subsidies and mandates, and reducing American jobs are also bottom-line wise.
But let’s please stop listening to GE CEO Jeffery Immelt (if he ever was really taken seriously), who is the head of President Obama’s Council on Jobs and Competitiveness, whenever he tries to lecture other American corporations on how to conduct their businesses. His hypocrisy is astounding, as illustrated in a Wall Street Journal report about his visit to one of his own gas turbine factories in South Carolina just two weeks ago:
Mr. Immelt said the wage differential between the U.S. and China and India had narrowed to a point that hiring domestically makes more economic sense. American companies, he said, have gotten "carried away" with outsourcing jobs overseas and are going to have to account for where they create jobs.
"Big companies like GE are accountable for where our jobs are," said Mr. Immelt. "If you want to be an admired company, you better know, you better have accountability, and you better think through where the jobs are…."
GE now has about 46 percent of its 287,000-person work force in the U.S. where it generates about 40 percent of its revenue. The company work force shrank by 17,000 last year, including by 1,000 in the U.S….
The jobs council has reached out to all Fortune 500 companies, pressing them to double their hiring of engineers next year. "If every one of the big companies in the U.S. doubled their recruiting of engineers, that would send a very powerful message," Mr. Immelt said.
Then there was Mr. Example-Setter on July 11 boldly telling members of the U.S. Chamber of Commerce at a jobs summit to do as he says, not as he does. "The people who are part of the business sector, the people in this room, have got to stop complaining about government and get some action underway," he said. "There's no excuse today for lack of leadership. The truth is we all need to be part of the solution."
Then, according to a CNN report, Immelt said it's important that businesses take action -- like taking some risks, and thinking about bringing back jobs that had been moved overseas. Apparently Mexico is close enough to be acceptable for Immelt and GE.
Seriously, defenders of GE’s X-Ray move to China note that no one at the 115-year-old unit will lose there jobs, and that only a few of the unit’s managers will relocate to Beijing. But the point is, most of the future growth, engineering and research tied to the unit will likely be in the Peoples’ Republic. That makes Immelt’s finger pointing at existing U.S. businesses quite hypocritical.
Of course, GE likes to employ lots of U.S. lobbyists – spending more on that effort than any other individual corporation, by far. So give them some credit – undoubtedly billions in tax credits and subsidies kept the company’s coffers healthy thanks to them.
Paul Chesser is associate fellow for the National Legal and Policy Center and is executive director of American Tradition Institute.