In a wide-ranging interview on Sunday with CNN’s Fareed Zakaria, GE CEO and Chairman Jeff Immelt discussed job creation and the economy from his perspective at GE and as the Chairman of President Obama’s Council on Jobs and Competitiveness.
Here are some highlights:
GE, Hiring in the U.S. and Exports
Immelt said GE is hiring 15,000 people in the U.S. this year – including positions shown on our American jobs map. He defended GE’s growth and investments in rapidly growing global markets in China, India, Brazil and other emerging economies: “60 percent of [GE] is outside the United States, 70 percent of our backlog [of orders for GE’s products and services]…. My customers are in Brazil, my customers are in Canada, my customers are in Japan and China.” That makes GE the second largest exporter in the U.S., which Immelt said is a cause for celebration because it helps create jobs here at home.
GE and Taxes
Immelt addressed criticism of GE’s effective federal income tax rate in 2010: “We paid billions of taxes over the last decade. We wrote off massive amounts during the financial crisis in GE Capital, and our tax rate to date this year is over 40 percent.” He also discussed the larger issue of corporate tax reform, calling for an overhaul of the system that would lower the rate while also closing loopholes, saying he agreed with the recommendations on corporate tax reform made by the bipartisan Simpson-Bowles Commission.
Shoring up Demand is Key
Immelt said “certainty of demand” is required to spur hiring. He cited GE’s aviation business making jet engines, where high market share and strong global demand mean that GE’s factories in the U.S. are operating at full capacity and adding workers: “Now, 80 percent of those products go outside the United States. They go to the Middle East, to China, to India.”
Streamlining Bureaucracy and Simplifying Business Regulations
Immelt said he’s learned from his service as Chairman of the President’s Jobs Council to appreciate how the world looks “through the eyes of small business.” He pointed out that big companies like GE are able to more easily comply with burdensome regulations because they have more people and resources. He said the Council and its 26 members had convinced the Obama administration to conduct an agency-by-agency review of regulations in an effort to simplify ones that are overly burdensome to small business.
Investing in American Competitiveness
“Does the debt and the deficit need to be reduced? Absolutely. Is government too big in many ways? Absolutely. But does the country still need to invest in education? Does the country still need to invest in infrastructure… and in the types of innovation and R&D that are going to make [the U.S.] competitive in the 21st century? Yes, we do.”
Immelt said that the “government in the U.S. has always been a catalyst to drive growth. This is not President Obama versus President Bush: The [National Institute of Health] has been a catalyst for the world’s best healthcare system. The Defense Department spawned… the Internet and modern transportation technology for generations. The nuclear industry was built [by] the Defense Department.”
Investing in Education and Worker Retraining
Noting that there are 400,000 unfilled healthcare jobs in the U.S. for radiology technicians and other healthcare support positions, Immelt said, “We need to have a way to get construction workers who have the highest level of unemployment to go from being a construction worker to being a radiology tech in a year.” He said community colleges and other schools could take a lead in offering retraining programs. Immelt also stressed the importance of science education, saying the U.S. should create 10,000 more engineers every year to stay competitive with students in emerging economies.
The Importance of Infrastructure
“Infrastructure is a facilitator of competitiveness and productivity… whether it’s broadband or highways or ports or electricity grids…. Businesses consider an area’s transportation system when they’re deciding where to set up shop, whether it’s a high-tech manufacturing plant or a corporate headquarters.” Immelt said that a quick way to create jobs would be to cut the time for the permitting cycle for big infrastructure projects in half.
The Council’s Upcoming Jobs Plan
“We’re putting together a very specific, very tangible, very action-oriented jobs plan – like you would any other business plan….” By the end of the year, said Immelt, the Council will release a sector-by-sector jobs plan focused on nonpartisan solutions. He said the plan will focus on areas he had discussed: ideas in education and retraining; trimming bureaucracy and simplifying government regulations, especially ones that burden small businesses; and investing in infrastructure projects.
Immelt also signaled that businesses believed in the American worker and said a recent trend towards “onshoring,” where companies return operations to the U.S. from overseas, was the result of the “pure productivity of the [American] worker,” which is “three times higher” than that of some overseas workers. He ended by reflecting on the difficult climate in the U.S., because of understandable anger and frustration with the economy: “But ultimately there’s a sense of teamwork that’s very much a part of the American culture. There’s a sense of partnership that I think will ultimately play out.”