GE Calls For More Exports To Aid Economy General Electric CEO Jeff Immelt is on a mission to improve U.S. exports. Immelt, who presides over the global giant in energy, transportation and financial services, says fixing trade deficits and building up the U.S. manufacturing base are top priorities.
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GE Calls For More Exports To Aid Economy

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GE Calls For More Exports To Aid Economy

GE Calls For More Exports To Aid Economy

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It's MORNING EDITION from NPR News. I'm David Greene.


And I'm Renee Montagne.

General Electric today announced plans to open a big research center in Michigan. It will employ more than a thousand people, and it will focus on technologies for clean energy, transportation and health care. This is good news of Michigan, which is struggling to refocus its economy. And it comes as General Electric is trying to refocus its business. The iconic American conglomerate was devastated by the financial meltdown because so much of its business was in financial services. Now the company's CEO Jeff Immelt is shifting GE back to its core businesses. We spoke to him about that, and also his ideas for refocusing the U.S. economy as a whole.

Now, you have called for something that should not be startling to hear, but in a certain way, is. That is you have called for America to start exporting more again.

Mr. JEFF IMMELT (Chief Executive Officer, General Electric): Totally. You know, look. I think the U.S. consumer almost can't be, you know, the sole engine of economic growth the way they've been probably for the last 20 or 25 years. And for this economy to recover fully, it's got to be led by business investment, and it's got to be led by exports.

The types of trade deficits we have as a country, the erosion of the manufacturing base in the country, these are things that are going to have to be fixed and companies like GE are going to have to invest. And we need the government to really have a very keen focus at restoring the competitiveness of the country, particular in places where we could be a great exporter, it's really important.

MONTAGNE: I know a huge part of your business at GE is outside the United States, something like half.

Mr. IMMELT: Mm-hmm.

MONTAGNE: But when you talk about exporting, just give us an example. I mean, you know, manufacturing wind turbines - would that be the sort of thing you're talking about?

Mr. IMMELT: You know, I would talk about jet engines. There's a big air show that took place in Paris a week or so ago. In the depths of this recession, we got bigger orders than at any time in our history, and not one of the orders was from an airline in the United States. These are from Etihad Airlines in Abu Dhabi, airlines in Canada, and these are all products that are fundamentally going to be manufactured in the U.S.

We recently put a hybrid water heater - 50 percent energy savings - back into our facility in Louisville, Kentucky. This was a product that could've been made in Mexico, maybe made in China, but working with our unions we were able to make it competitively here.

And, you know, I think inside the company, we're doing real decision-making about have we outsourced too much capability in areas? And if so, what should we bring back and where should we put it?

MONTAGNE: You know, when you talk, though, about manufacturing inside the United States and you're making it work in some areas, how exactly do you make it work? When you talk about making deals with unions or just offering big concessions?

Mr. IMMELT: Well, you know, I think a lot of it has to do with the technology of the products that you're building. So if you have high tech products where the science and material science is a big part of the cost component, the U.S. can compete with anybody. But it's also important to work with your human resources and your talent. And that means work rules. It means more productivity. We had a pretty good track record of working constructively with the human resources to have the types of products that can be exported.

MONTAGNE: But does that involve lower labor costs?

Mr. IMMELT: You know, I think what it involves is in the places you have relatively high labor costs, they've got to be more productive. And it's got to involve real work on technology and just the output of the labor that you've got in any one of the facilities has to be able to compete on a global basis.

MONTAGNE: Although, of course, Americans are among the most productive in the world workers.

Mr. IMMELT: American workers are among the most productive in the world. But if you want to sell your locomotives in China, you've got make sure that you can compete with people that manufacture in China.

MONTAGNE: Should the government play a role in this at all, providing subsidies, tax incentives, the sort of things like Canada and South Korea have done?

Mr. IMMELT: The government should do whatever is in its own best interests, you know, over time. My sense is that there should be a real definitive desire to make the country more competitive and to try to make sure that we can export more, because that's where the growth is going to be.

MONTAGNE: Are you reshaping a substantial part of the business in order to gain a bigger share of government stimulus money?

Mr. IMMELT: We are a huge energy player. So we're a $45 billion energy player. We're about a $20 billion health care player. These are businesses we've been in for almost 100 years. That's the lion's share of the company. And so insofar as there's going to be government stimulus that is in energy and health care, GE is a natural player for those types of investment, because we've invested in R&D for decades.

MONTAGNE: Jack Welch, your predecessor, was quoted as saying that taking government money was - and I'm quoting him - "making a deal with the devil." Now, he was referring to banks taking government bailout funds, quite a different thing from stimulus money. But are you concerned that going after, say, massive amounts of stimulus money will make GE too dependent on the government?

Mr. IMMELT: If, in fact, the government is doing financing of wind turbines or jet engines or things like that, I think I owe it to our employees and to our customers and to our investors to make sure GE is well positioned for that. But if all of that ended, we'd just go back to the way we run the business, anyhow. And that's what we're prepared to do. But I think it's just an IQ test to say if China is going to rebuild its health care system, GE should try to grow our health care business in China as fast as we can. And so it's not just about the U.S. It's about what's going on around the world. And I would say, look, we've had NASA, we've had defense spending, we've had NIH investment. We've had all those things over decades in this country. This is nothing new.

MONTAGNE: Jeff Immelt is CEO of General Electric. Thank you for joining us.

Mr. IMMELT: Thanks.

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