FT.com has reported provocative remarks made in Rome last week by General Electric CEO Jeffrey Immelt to a group of Italian executives.
The whole article deserves reading, but I want to focus on one FT quotation. “People are in a really bad mood [in the US]. We are a pathetic exporter . . . we have to become an industrial powerhouse again but you don’t do this when government and entrepreneurs are not in synch.”
(As noted below, a GE statement contended the FT inaccurately reported or quoted out of context Mr. Immelt’s remarks. But it doesn’t say which, if either, characterization applies to this quotation.)
Almost no one would debate Mr. Immelt’s first assertion here. But his second, third and fourth are remarkable.
Not least remarkable is his use of “we”. Here is the CEO of an important transnational speaking from a deliberately American perspective to an Italian audience.
By conventional measures, such as the trade deficit, “we are a pathetic exporter”. By a less conventional usage, over the past 30 years the US has been a highly successful exporter of manufacturing jobs and technologies. Our problem today may be that we have nothing left to export.
In my view, the absence of manufacturing and technology exports signals the imperative for the US “to become an industrial powerhouse again.” But it is of a piece with greater issues such as the rebuilding of what used to be a vast middle class. A superb special report in the January/February American Prospect makes this argument and backs it up with appalling statistics.
This is not to say we need “growth” as traditionally defined. But it is to say the US has to create jobs for its people. Otherwise, Americans will find “the pursuit of happiness”, the inalienable right promised by the Declaration of Independence, as futile as Greyhounds’ chase of mechanical rabbits.
But is it possible to become an industrial powerhouse when “government and entrepreneurs are not in synch”? I find curious Mr. Immelt’s choice of words. Did the CEO of a transnational really mean “entrepreneurs”? Or, was he referring to corporate magnates like himself?
Transnationals have fewer and fewer ties to their natal lands, more of the indicia of sovereign states. Entrepreneurs have more interest, presumably, in building local communities in which their efforts will bring financial – and perhaps social – rewards.
Assuming the FT quoted Mr. Immelt correctly, I think he meant the word he used. A business and financial consensus enforced by presidents from Reagan through Obama has favored a form of free trade that encourages exporting US high-wage manufacturing to low-wage countries.
Entrepreneurs weren’t the drivers of that policy. Today, it discourages entrepreneurial development of businesses in large swathes of industries – in the US. That policy, enforced by government and transnational corporations, must change if the United States is to regain its economic footing.
Count me an admirer of Mr. Immelt. I see him shaped by the same mould as Gerard Swope, the industrial statesman who headed GE for 33 years from the early 1920s through the Depression and World War II. Like his predecessor, Mr. Immelt has established the worth of his perceptions. He has again said something brave – and pretty close to right.
According to the UK’s Daily Telegraph General Electric has issued the following statement: “The comments attributed to Jeff Immelt by the FT were taken out of context and, in some instances, inaccurately reported. Mr Immelt’s comments at a private dinner focused on the relationship between business and government in general and did not single out President Obama. Mr Immelt also discussed the attractiveness and importance of China as a market for GE.”