GE's Immelt--A Strategic Retreat

Three weeks ago, GE (NYSE: GE) CEO Jeff Immelt made a uncharacteristic attack on China’s business policies.“I am not sure that in the end they want any of us to win, or any of us to be successful.” Those “any of us” is the large multinationals of the West.

Immelt softened his comments, and even came close to repudiating them. It has almost certain that he now agrees with his own PR people who said that he did not really mean what he said about China. They tried to change public perceptions about the remarks within hours after they were made.It is a shame that Immelt has tried to cover his tracks and now says that his comments were taken out of context. He has quickly moved on to GE’s launch of a $200 million clean energy fund to help the growth of green initiatives. It is part of GE’s odd “ecomagination” that goes with its “healthomagination”. They are screens for GE’s plans to make money on the greening of the world, and in the growth in  healthcare spending. Immelt hid behind his green program to shift the focus away from his China rant.

Immelt knows full well that his  China comments were right. China forces US companies to conform to Chinese standards for internet freedom, the distribution of media content, the sale of IT products to the government or offering new technology for the country’s aging wireless infrastructure.

No multinational CEO, in the privacy of their offices and out of earshot of the press,  would  say that China is a level playing field. China keeps American companies at bay with both arcane regulations and a yuan that still helps its exports advantages unnaturally.

There is a growing concern about China’s unfair way of treating America’s big companies. But, there are no set of sanctions to bring China to some level of fair trade. The rhetoric does not bother the Chinese nor should it. America is too busy being fair to be smart. Immelt, like most other CEOs and politicians, is too cautious for his own good.

Douglas A. McIntyre