GE CEO Jeff Immelt: U.S. 'Not Trying That Hard' To Win Business Overseas
NEW YORK (Scott Malone) - The United States is not trying hard enough as a nation to win business overseas, and that is contributing to its economic slump, said General Electric Co (GE.N) Chief Executive Jeff Immelt.
That is a big concern since boosting exports is one of the best ways the nation can tackle the stubbornly high unemployment that is leading a growing number of Americans to question how well the economic system is working.
"We're not trying that hard," Immelt told a Thomson Reuters Newsmaker event in New York on Monday. "We haven't really tried as hard as we can to compete, educate and sell our products around the world, and I think we can do better."
Still, the head of the largest U.S. conglomerate and a top adviser to the Obama administration on jobs and the economy believes the United States can improve. He noted that GE expects to generate 60 percent of its sales outside its home country this year.
He held out Germany -- home to one of GE's biggest rivals, Siemens AG (SIEGn.DE) -- as an example of a wealthy country that has been successful in pushing exports.
"Chancellor (Angela) Merkel flies from Berlin to Beijing, there's 25 German CEOs that go on the plane right behind her. And they connect the dots. They play hard, they play to win," Immelt said.
President Barack Obama, he added, "has been out driving and pushing to try to double exports in the next five years. I think we can compete very well. But we're not all-in the same way that the Germans are all-in."
The nation's economic malaise, now in its third year, has left many Americans angry and frustrated, Immelt said, and people in power need to empathize.
"Unemployment is 9.1 percent. Underemployment is much higher than that, particularly among young people that don't have a college degree," Immelt said. "It is natural to assume that people are angry, and I think we have to be empathetic and understand that people are not feeling great."
A large and diverse group of protesters, who complain that the U.S. economic system is no longer working to the benefit of a large slice of the nation's population, has been a visible presence on Wall Street for a month now. The movement, known as "Occupy Wall Street," has spread around the country.
The protesters complain that the billions of dollars the U.S. government spent during the recession to prop up financial companies, including GE, have allowed banks to earn large profits without benefiting average Americans.
GROWTH THE ONLY ANSWER
The head of the world's largest maker of jet engines and electric turbines said he regarded stronger growth as the only real answer to the rising disillusionment.
"The only way to solve this specific problem is growth," Immelt said. "If unemployment comes down, people will feel better. If unemployment goes up, people will feel worse, no matter what goes on Wall Street."
Immelt said the gap between the pay of CEOs and average Americans is adding to tensions.
"The discrepancy is certainly one of the problems today in terms of why people feel the system is unfair," Immelt said.
But he said that lowering CEO pay would do little to lower unemployment. Immelt received compensation worth $21.4 million last year, including a $4 million bonus that was his first since 2007.
"If CEO pay goes way down and unemployment is 12 percent, people are still going to feel bad," he said. "It is a symptom but it is not the problem."
Immelt is confident that U.S. business can compete with rivals in emerging markets such as China and also profit in developing markets. He cited Russia as a major focus over the next decade and said GE is also investing in resource-rich African countries including Mozambique, Angola, Nigeria and South Africa.
GE expects to generate more than 60 percent of its revenue outside the United States this year. Analysts, on average, expect it to record revenue of $148.13 billion.
SEES SLOW EUROPEAN GROWTH
Concerns that Greece could default on its debt and threaten the European and U.S. financial systems have rattled the world economy in recent weeks, pushing down stocks and prompting big banks including Bank of America Corp (BAC.N) and JPMorgan Chase & Co (JPM.N) to begin laying off staffers.
"The most likely case is that Europe has slow growth for a long period of time," Immelt said. "The process is going to have to be solved inside of Europe."
Last week, the White House advisory panel Immelt heads submitted a report to the Obama administration saying that attracting more foreign capital, being more aggressive in energy policy, and investing in infrastructure could help create jobs in an economy struggling with high unemployment.
Immelt, a lifelong Republican, has drawn fire from some GE shareholders for his work with the Democratic Obama administration. The CEO defended his role, saying GE executives have long had a voice in Washington.
"People need to try," he said. "I'd rather be in the arena trying than not doing what I can to help."
Partisanship in Washington is hurting the nation's economy by slowing efforts to reform the system, Immelt said, adding that he worried that anti-Wall Street rhetoric hurts people other than those it is aimed at.
"If your first comment is Wall Street is horrible and you're in a position of leadership, you don't hurt Wall Street," Immelt said. "But there is some guy in Illinois that's not going to build a factory today because he thinks the financial system is horrible. That's my point. This is a time when leaders, people like me, should be trying to do things that are more convergent, because ultimately words count."
(Reporting by Scott Malone, additional reporting by Nick Zieminski; Editing by Derek Caney and John Wallace)
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