The Fox Guarding the Hen House

I watching 60 Minutes last week as I have done on many a Sunday nights for the past 35 plus years. I have to admit that the broadcast while still miles better than the competition has slipped a bit. But what caught my interest was the segment with Jeff Imelt the CEO of General Electric and President Obama's job czar.

The job czar position being one who advises the president on the best way to generate jobs. It would seem like a no brainer to appoint Imelt who runs one of the largest multi-national companies in the world, GE. GE makes everything from washing machines to jet engines for commercial and military aircraft to turbines to locomotives. Until recently they also owned a majority stake NBC/Universal which they recently sold (the majority) to Comcast. So naturally Imelt is a good choice for the job czar position that Obama has appointed him to, right?

The segment started out by showing a factory that Imelt was walking through that was recently built in the United States and provided jobs for US works at $13.00 plus an hour. The piece also followed Imelt around the globe to Brazil where GE has a large and growing presence and to China where they are partnering with that country to produce an airliner which may compete with Boeing and Airbus. At the end of the 15 minute report Imelt looks at Lesley Stahl, and inquires as to why the American people are not rooting for GE? He says that in Germany, the German people are rooting for Siemens (a Germany company). He cannot understand why the US people are not rooting for American companies and GE specifically?

Now it is understood that these reports are edited and since the segment included many global locations, it was taped over a several week period. But really, Mr. Imelt? You wonder why Americans don't root for GE's success?

Let's help you answer your question:

As one of the most stable companies in the modern era, GE's stock plummeted during financial melt down. Was it because it was following the rest of the market down? No. It was because GE Capital, GE's financial unit was caught up in the financial crisis much like the rest of Wall Street. That one unit dragged down the rest of the company and caused GE stock to fall to below $10 per share. Nothing like endearing the American public to your company by helping them loose hundred of millions of dollars in stock value by malfeasance of a destabilized financial division. But that is just for starters and is ancient news.

ABC News reports that GE laid off 19,000 workers in 2009. Now according to Mr. Imelt GE is growing again. He further acknowledged that he is putting people back to work again in the US. But he is growing even faster in Brazil where a whole city has sprung up to service the needs of GE's growing worldwide business. Guess where the workers are being hired?

It is widely known that GE paid no US taxes in 2010. They were not alone. Neither did Ford or Ebay and several other notable US logos. It is also widely known that GE hires former IRS and tax law experts who have expertise in the tax code to help Congress write tax legislation that helps benefit GE. Additionally GE and other US companies park billions of dollars of off shore profits that will never enter this country and therefore are not subject to US taxation. Yet with all this favorable treatment and having paid no taxes in 2010 Imelt still would like to see a "tax holiday" for businesses who want to bring that money back to the US. He further acknowledges that he does not know whether this additional benefit would lead to any significant US job growth.

Note that nothing in the behavior listed above is necessarily exclusive to GE. Other companies engage in the same or similar activity. Additionally, nothing GE has done is illegal, however the fact that their lobbyists and tax experts are writing or supporting tax legislation that is directly benefiting them is something that you or I would find impossible to do.

So why is America not rooting for GE Mr. Imelt? Well to begin with I do not know that this is exactly true. I am sure your investors and employees are firmly behind you. But I am pretty sure that if you are 1 of the 19,000 who were laid off and your job is in Brazil, China or India you are not exactly rooting for GE. If you lost thousands of dollars in GE stock because GE wrote off bad loans, then you are not rooting either. If Americans see technology transferred to China that might result in a loss of even more US jobs in the future you probably are not rooting for GE. If as an average American you see this happening over and over again by American companies like GE and at&t (they proudly told their stockholders that they would cut 40,000 US jobs if the acquired T-Mobile USA), then you might begin to understand why Americans are not rooting for American companies like GE. Ask the employees of Airborne Express who had their company purchased by DHL. DHL eventually shut down their US hub and put hundreds out of workers out of a job and caused a ripple effect of foreclosures, financial devastation and even suicide. Ask the employees of Whirlpool who had their jobs moved to Mexico. Ask the thousands of nameless workers who get pink slips for no other reason than some corporate accountant decides that a division is not profitable enough so they close it.

Americans love to root for something. They especially love to root for the home team. Just ask many football, baseball, hockey and basketball fans who either live near or grew up near the local team. Ask any student who roots for their school well after they have graduated. Ask the workers who built automobiles in the US just to see manufacturing go just across the border to Mexico in the name of maximized profits. We are a fiecely loyal bunch.

But loyalty is not blind and we are not going to cheer for companies that continually send jobs away from America. It is just becoming more difficult to figure out exactly who the home team is. Contrary to popular worldwide opinion Americans are not stupid. We see what is going on in corporate America. But you know as well as anyone that, at one time, people did root for GE. So, Mr. Imelt if you indeed don't feel like we are rooting for your company maybe now is the time, and your opportunity as the job czar, to give us a reason to root for GE and American business again.