By Steve Milloy
January 21, 2011, Investor’s Business Daily
The choice of General Electric CEO Jeff Immelt to chair the new President’s Council on Jobs and Competitiveness must be one of President Obama’s most ironic appointments.
The purpose of the council is to advise the president on “finding new ways to promote growth by investing in American business to encourage hiring, to educate and train our workers to compete globally, and to attract the best jobs and businesses to the United States.”
Of Immelt, Obama said: “Jeff Immelt’s experience at GE and his understanding of the vital role the private sector plays in creating jobs and making America competitive makes him up to the challenge of leading this new council.”
The White House further burnished Immelt’s credentials by adding in its media release that “Mr. Immelt has been named one of the world’s best CEOs three times by Barron’s, and since he began serving as chief executive officer, GE has been named America’s most admired company in a poll conducted by Fortune magazine and one of the world’s most respected companies in polls by Barron’s and the Financial Times.”
This praise should make us wonder if there is another Jeff Immelt leading another General Electric in some parallel universe .
When the Immelt-we-know took the reins of the GE-we-know from the legendary Jack Welch in the days before the Sept. 11 attacks, GE’s stock price was in the $40 range. More than nine years later, GE’s stock price is struggling to get back to the $20 level. And during the March 2009 depths of the financial crisis, GE’s stock dipped to below $7.
GE was in such bad shape at that time that it required a $139 billion bailout from taxpayers in the form of Federal Deposit Insurance Corp. backing of GE Capital debt. GE then cut its dividend 68%, from 32 cents per share to 10 cents per share.
Its dividend has since recovered to 12 cents per share, and shareholders may get a couple of more pennies per share in 2011, but GE’s financial performance under Immelt is anything but a success story.
Adding to the irony is the president’s notion that Immelt knows about creating jobs and increasing competitiveness.
Immelt actually eliminated 18,000 GE jobs in 2009, despite receiving untold millions in government stimulus and subsidies — like $60 million to build a “technology center” (office building?) in Michigan and $55 million to build a hybrid locomotive battery plant in New York.
As to competitiveness, consider the rather tawdry August 2009 e-mail solicitation of GE employees by GE’s political action committee (GEPAC), which read in part:
“The intersection between GE’s interests and government action is clearer than ever. GEPAC is an important tool that enables GE employees to collectively help support candidates who share the values and goals of GE. … We have made great strides toward convincing key lawmakers that GE Capital should remain a part of (GE). … On climate change, we were able to work closely with key authors of the Waxman-Markey climate and energy bill. . .. (It) would benefit many GE businesses. … GE is working relentlessly to ensure funding for F136 Engine, which is a critically important program for GE Aviation.”
One hundred years ago, Thomas Edison innovated to earn profit for GE.
Now Jeff Immelt lobbies for profit because there is no market for failed businesses, higher energy prices and duplicative military hardware.
That GE is so dependent on government largesse should raise the specter of Immelt’s obvious conflict of interest. Will he advise the president on what’s good for America or what’s good for GE?
The Obama-Immelt partnership is best envisioned as two drowning men clinging to each other in order to stay afloat. The failed CEO needs the president’s central planning policies and favor to keep his job. The struggling politician needs the mega-company CEO to camouflage and smooth over his anti-business beliefs and tendencies.
This symbiotic relationship may work out for Obama and Immelt as individuals, but we ought not hold our collective breath waiting for two men without track records of nonpersonal success to create jobs, increase our competitiveness or to fix what’s ailing our troubled economy.
• Milloy publishes JunkScience.com and is the author of “Green Hell: How Environmentalists Plan to Control Your Life and What You Can Do to Stop Them” (Regnery 2009).