Wednesday, July 27, 2011

This is a joke, right?

I've let my fury over the tough-talking "China is a currency manipulator" theme in Washington die down, in large part because it's been replaced by fury over lying and posturing with regards to the debt ceiling. But just because I've stopped talking about those issues doesn't mean they've gone away. While we're all distracted by the debt ceiling theater, some fairly important developments have been sneaking under the radar (as they always seem to at times like these).

A few months ago, in response to our stubbornly high unemployment rate and the ongoing discussion regarding the role of China in our declining manufacturing industry, President Obama created a "Council on Jobs and Competitiveness", with General Electric CEO and Chairman Jeff Immelt installed as the head of the council. That appointment turned a few heads--including that of Senator Russ Feingold--among those who noted that GE had repeatedly and systematically gone out of its way to avoid paying federal income tax over the previous decade.

Nevertheless, Immelt has continued in his role, and according to him, he has worked tirelessly to keep jobs in America rather than shipping them overseas.
The chairman of President Barack Obama's jobs and competitiveness council said Wednesday there is no magic potion to jobs creation, but the panel is devising pragmatic plans to put people back to work.
General Electric Co. Chairman and CEO Jeffrey Immelt spoke Wednesday with employees and reporters during a visit to his company's gas turbine plant in Greenville, which employs 3,300 people including 1,700 engineers.
Immelt said his four months on the Obama advisory panel has taught him that even his company can be held accountable for where it creates jobs. He said the panel is working on devising a hundred different business plans for every sector of the economy, with practical steps to help create jobs.
Yes, Mr. Immelt has learned a lot--"even his company can be held accountable for where it creates jobs". Indeed. I'm glad to see him recognize that in trying to be part of the solution, he must first accept that he and GE have been a huge part of the problem.

Hopefully that can be a first step toward our nation reclaiming its lost manufacturing... wait a minute, what the fuck?
General Electric Co.’s health care unit, the world’s biggest maker of medical imaging machines, is moving the headquarters of its 115-year-old X-ray business to Beijing.
“A handful’’ of top managers will move to the Chinese capital and there won’t be any job cuts, said Anne LeGrand, general manager of X-ray for GE Healthcare. The headquarters will move from Wisconsin amid a broader plan to invest about $2 billion across China, including opening six “customer innovation’’ and development centers...
The X-ray business, whose financial results aren’t reported separately by GE, will hire 65 new engineers and support staff at a new Chengdu facility, the company said. GE has hired “a large number’’ of engineers who are in training, LeGrand said. GE, based in Fairfield, Conn., also has a global research center in Shanghai.
Sigh... look, it's great and all that "there won't be any job cuts"--at least not right now. But is GE so completely deaf to the message it's sending by doing this? When your CEO is the head of a Presidential council on jobs and competitiveness, moving ANY of your lines of business overseas and hiring new engineers in China instead of in the United States is the height of hypocrisy. Jeff, you JUST SAID that you're learning to be accountable for where you create jobs--apparently you lied. Shocking.

Let it be clear that, in isolation, I don't blame Immelt for moving his division's headquarters to China--it's in all likelihood a smart business decision, as is avoiding taxes when possible*. But to do so while also pretending to care deeply about jobs and American competitiveness--and chairing a council that is charged with doing just that--is just nauseating.

Jeff Immelt should immediately recuse himself from his role as head of the jobs council. If avoiding federal income tax for years wasn't enough, this latest move is just too bold and arrogant to ignore. Way to sneak this one under the radar when other events are dominating the news flow, Jeff... too bad you couldn't sneak it by everyone.

[Economic Times]
[Boston Globe]

* I am on record here saying that the reason we have lost our manufacturing base to China is not "greedy business owners" but "terrible monetary policy that debased our dollar and destroyed the competitiveness of American labor". That and a whole host of other factors that, in sum, have consistently weakened our nation.

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