Leslie Stahl had an interesting interview with Jeffrey Immelt, CEO of GE and Obama's new Jobs Czar, on 60 Minutes last Sunday. At the end of the interview Stahl asked, “Do you not see any reason that maybe the public doesn’t hold American Corporations up there on high?” Immelt responded by saying, “I think this notion that it is the population of the US against the big corporations is just wrong. It’s just wrong-minded.”
Earlier in the interview, Mr. Immelt emphasized his point that US corporations should be admired by the American public:
I want you to root for me. You, know. Everybody in Germany roots for Siemens. Everybody in Japan roots for Toshiba. Everybody in China roots for China South Rail. I want you to say, “Win GE!”’
There is a good reason why the people in those other countries root for their local corporate conglomerates, while Americans do not. It’s because their corporations are also rooting for them.
They each place local jobs, workers' rights and workers' benefits high on their list of corporate priorities. In addition, they place a high priority on paying their “fair share” of federal taxes and maintaining a high degree of corporate citizenship.
However, in America, the entire list of corporate priorities tends to be dominated by actions which make more money for the corporate executives and the shareholders, while little emphasis is given to the well-being of the corporations' employees.
Like General Electric, the Siemens and Toshiba examples that Immelt mentioned are large international conglomerates with a large percentage of their employment located overseas. But, unlike General Electric, those companies tend to outsource jobs overseas only in cases where their foreign employees have different skill-sets than those that already exist in their home-country facilities. They tend not to downsize or shut down local factories and reestablish the same employee-base overseas.
This is usually not the case in the US. Jeffrey Immelt presented a perfect example of this during his 60 Minutes interview. Immelt walked Leslie Stahl through GE’s expanding locomotive production facility in Brazil, a factory that makes the same products as GE’s US Locomotive Division located (for over a half century) in Erie, Pennsylvania. Some, or all, of these locomotives could have been built in Erie. But they weren’t because GE used only cost-based analysis to determine its foreign outsourcing. "Keeping American Jobs" was not an important factor in that decision.
In recent years, GE’s Brazilian locomotive production facility has added a significant number of jobs, while GE’s Erie, Pennsylvania operation has been faced with significant layoffs.
Furthermore, the corporate and government established social safety nets for the employees working for those foreign corporations are much more beneficial to the workers. The defined-benefit retirement plans in those countries are being strengthened, while the US Social Security and corporate-provided defined-benefit retirement plans are being reduced or are being threatened with elimination.
Employee healthcare comparisons are equally distorted. Both Japan and Germany provide cradle-to-grave healthcare for their workers. US workers, however, pay twice as much for their healthcare and receive less quality and efficiency in their healthcare programs
In regard to paying a fair share of taxes, Mr. Immelt mentioned during the interview that he is seeking to have a lower corporate tax rate in America to “help create jobs.” It is interesting to note that both Japan and Germany have corporate tax rates that are similar to the US and, because they have none of the corporate tax loopholes that are prevalent in the US, both Toshiba and Siemens paid substantial federal taxes last year.
General Electric, on the other hand, paid no federal taxes in 2010.
Jeffrey Immelt summarized the US corporations’ place in our society when he was asked by Leslie Stahl, “Don’t American corporations have a civic responsibility to create jobs?” Mr. Immelt shook his head and said:
My name’s not above the door. I work for investors. Investors want us to grow earnings and cash flow. They want to see us be competitive. They want to see us prosper.
Shouldn’t US corporations want to see their employees prosper as well?