Should GE's Jeffrey Immelt Really Be Leading Our Job Creation Strategy?
There is no swifter way to alienate working class voters than to name an outsourcing CEO to lead your jobs strategy. Yet that's exactly what President Obama is doing.
General Electric CEO Jeffrey Immelt has fooled the media and the White House into believing that he cares about American manufacturing jobs. I have a hard time imagining a worse pick, unless Obama would have tapped Immelt's predecessor Jack Welch, who seemed fine with the idea of putting factories on barges in search of the lowest wages in the world.
Let's look at GE's jobs record. You would have difficulty finding a company that has outsourced more jobs and closed more American factories than GE. While they have slashed their American workforce to fewer than 150,000, GE has dramatically expanded its global presence, now employing over 300,000 workers worldwide. Yes, GE has brought a trickle of jobs back to the U.S. over the past two years, but it still outsources more than it insources. And those executives at GE are not clueless--they realize the value of good publicity as it announces new hires at a time like this. But they do not devote nearly the same amount of publicity to their factory closings.
Immelt's prescription for boosting manufacturing harkens back to the days of bloodletting as a medical procedure -- bad policy with consistently poor results:
- In a speech to the Detroit Economic Club in 2009, Immelt berated "Buy American" policies while acknowledging that GE lived under domestic preference regimes in China, France, and other nations. In Immelt's mind, it is fine for China and France to require to GE to make what it sells in their nations, but it's not OK for America to do the same.
- Immelt essentially rules out any enforcement of our trade laws in his Washington Post op-ed today through a spurious claim that distorts the issue. So China can cheat all it wants, and Immelt wants us to do nothing. Trade enforcement is not "erecting barriers," as Immelt alleges. Rather, trade enforcement is about removing distortions from the free market. Immelt reveals his true stripes with this ridiculous assertion. It's a dangerous statement, and it demands an immediate and forceful rebuke from the White House.
- Immelt supported two of the most disastrous economic policies of the post-World War II era: financial deregulation and China's entry into the World Trade Organization with few, if any, consequences for breaking the rules.
The result of policies Immelt has supported: one-third of our manufacturing workforce gone in a decade. 50,000 shuttered factories. At least $245 billion in real wage and salary losses for manufacturing workers. Record trade deficits with China. In short, our worst decade in manufacturing history--by most measures even worse than the Great Depression.
Blue collar workers in the industrial heartland--swing states like Pennsylvania, Ohio, Michigan, Indiana and Wisconsin--will not be impressed. The president would have been well advised to select a business leader committed to pragmatic policies to revitalizing manufacturing. Intel's former CEO Andy Grove, U.S. Steel's John Surma, Nucor's Dan DiMicco, or Chandra Brown of United Streetcar--which built an industry out of nothing--would all have been far superior choices. And, leading thinkers on manufacturing strategy like Leo Gerard of the United Steelworkers should be intimately involved.
The White House jobs council will fail unless it embraces ideas that will get our economy moving again and that enjoy widespread support. Here's a good list for them to start with:
- Eliminate our trade deficit through boosted exports, vigorous trade enforcement, and penalties for China's cheating on currency, subsidies and intellectual property. Congress and the Administration should approach the trade deficit with more vigor--it will make balancing the federal budget a whole lot easier.
- Investment in our nation's crumbling infrastructure that goes well beyond the Recovery Act projects. Where's our next Hoover Dam, Golden Gate Bridge, Erie Canal? The answer right now, unfortunately, is somewhere in China. We need to think big on high speed rail, a smart grid, universal broadband, and more efficient transportation arteries and hubs.
- Buy America policies--perfectly within our rights--that ensure tax dollars are reinvested in American workers.
- Focusing on skills and training for industrial careers. Germany begins preparing its manufacturing workforce at age 16. We warehouse those kids. It's no wonder we are falling behind.
- Revitalizing our innovation base, which is also moving offshore. We need federal investment to connect our great research universities, domestic manufacturers, and best private labs to make sure that the next technical breakthrough is not only invented here, but made here.
- A better tax structure for domestic production. Taxes for manufacturers who keep their production and income in the U.S. are high compared to our competitors. We should not give a blank slate to corporations, but rather target tax breaks to companies committed to investing those savings domestically.
Some of these ideas have already been embraced by the President and Jeffrey Immelt, but key aspects of this plan have been summarily rejected by Immelt in the past. If the President really wants a game changer on jobs, he picked the wrong guy with the wrong ideas to lead the effort.
This blog is cross-posted on The Huffington Post.
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