By Scott Malone | Reuters – Thu, Aug 18, 2011
|General Electric CEO Jeff Immelt makes a speech during a "Jobs for America Summit" …|
HANOVER, New Hampshire (Reuters) - The United States needs to reform its corporate tax code and should consider eliminating all loopholes that allow companies to pay less than the statutory rate, General Electric Co 's chief said.
The largest U.S. conglomerate would accept the elimination of loopholes "in a heartbeat" if it was coupled with a lowering of the statutory 35 percent rate, Jeff Immelt told a group of students on Thursday.
"Corporate tax in this country needs to be reformed," Immelt said at Dartmouth College, in Hanover, New Hampshire. "Stuff that the deficit commission came up with, which was a lower corporate tax rate ending every loophole, is what we would take, with a territorial system, we would take in a heartbeat. The fact is I'd take Germany's or Japan's or the U.K.'s corporate tax policy today, sight unseen, without any dispute, I would take any of those tax policies today."
A so-called Congressional "super committee" is working on a way to find another $1.2 trillion in cuts from the nation's budget over the next decade, terms that were part of the recent deal to raise the U.S. debt limit and avoid a default. Existing tax breaks for businesses and individuals cost the government some $1 trillion per year, but Republicans may agree to cutting those if the move is coupled with a reduction in the top tax rates for companies and people.
Immelt also acknowledged the criticism the world's largest maker of jet engines and electric turbines came under this year for its recent low tax rate. A study released in June by the left-leaning research group Citizens for Tax Justice found that GE had an effective tax rate of negative 61.3 percent in 2010, making it one of at least eight big U.S. companies to record a tax benefit rather than a bill for the year.
"GE has paid tens of billions of dollars in taxes over the last decade," he told the crowd at the Ivy League university where he played football as an undergraduate. "Our technique for paying low taxes in 2009 and 2010 was writing off $32 billion (in losses) at our financial service business. I don't recommend it."
Troubles at the GE Capital arm contributed significantly to the company's woes during the financial crisis that sent its shares to 18-year lows in early 2009. They have since rebounded to almost three times their crisis level and closed at $15.34 on Thursday, down 5.5 percent on a day the U.S. stock market dropped sharply.
'RUBBISH' THAT UNCERTAINTY HAMPERING INVESTMENT
Immelt, who leads a panel advising the Obama administration on job creation, said he puts little stock in talk that the government could do more to encourage companies to invest and lower the nation's persistently high unemployment rate.
"A lot has been said that business isn't investing because of uncertainty. I think that's rubbish," the 55-year-old CEO said. "The government couldn't do anything to make me invest and believe me the rest of the world isn't that stable either. We've made our own choices that we're going to keep investing regardless of what happens in Washington."
But in an uncharacteristically animated moment, he blasted critics who contend that companies like GE that do much of their sales outside the United States are hurting the economy. He noted that GE sells 90 percent of its jet engines abroad but manufacturers all of them in U.S. factories.
"That's not taking jobs out of the United States, that's what we have to do," Immelt said. "We've gotten this psychotic thing that anybody that does business outside the United States is a heathen, anti-American ... I don't understand why we're rooting against companies that are out there competing because we're creating good jobs here."
(Reporting by Scott Malone, editing by Bernard Orr)
Source: Yahoo News
Related Links: The Washington Post (Business) 8/21/11 -
"As the country faces an unemployment crisis, President Obama, lawmakers and business lobbyists have all touted the country’s biggest companies as critical to creating jobs.
The head of Obama’s jobs council, General Electric chief executive Jeff Immelt, said during a tour of a company plant in Greensboro, S.C., that firms should be ready to answer questions from the public.
“If you want to be an admired company, you better know, you better have accountability, and you better think through where the jobs are,” he said."
Immelt: Businesses must do more on jobs
@CNNMoney July 11, 2011: 6:13 PM ET
NEW YORK (CNNMoney) -- The head of General Electric told a jobs summit at the U.S. Chamber of Commerce Monday that businesses needed to take the lead on job creation.
At a conference where many of the comments were focused on government barriers to hiring, GE (Fortune 500) Chairman and CEO Jeffrey Immelt acknowledged there needed to be some policy changes by Congress and the Obama administration. But he said that the responsibility for hiring lay with businesses.,
"The people who are part of the business sector, the people in this room, have got to stop complaining about government and get some action underway," he told the group. "There's no excuse today for lack of leadership. The truth is we all need to be part of the solution."
Immelt is the chair of President Obama's Council on Jobs and Competitiveness. He said the group has made a number of recommendations for changes in government policies that should be able to help job creation, such as the executive order announced Monday asking independent agencies to rid their books of old and outdated regulations.
Immelt said he is committed to working with Obama on other moves that can help hiring, and that he expects to have proposals by the end of the year that should help to create up to 1 million jobs.
But he said that it's important that businesses take action -- like taking some risks, and thinking about bringing back jobs that had been moved overseas.
If companies examine the changing economics of some of those jobs, Immelt said they would find it is beneficial to bring jobs back home, which he said GE has done with some jobs now being moved back to Kentucky and Michigan.
And he said that arguing between business groups and the government isn't in the best interest of the nation's economy.
"We can't always be fighting. We need to act, and the private sector can do more," he said.
The Chamber's jobs summit came in the wake of a disappointing government jobs report that showed hiring ground to a near halt in June. Immelt and other speakers referred to the report as a sign of the serious problems facing the labor market.
"We have a lot of work to do," he said.
Earlier in the day, Chamber President and CEO Thomas Donohue laid out his group's broad plans to improve hiring, with most of the focus on changes in government policies. Among the changes he called for were the passage of pending free trade agreements, reform of visa rules to allow companies to hire skilled workers and recent graduates from overseas and to boost spending by foreign visitors. He also called for easier permitting of new projects and reform of government regulations.
"Can you blame these businesses? They don't know what's going to hit them next, and that's what worries them the most," said Donohue.
Donohue and Immelt both said it is important that Congress quickly agrees to raise the debt ceiling to remove that uncertainty. Donohue said this should be done in conjunction with a long term plan to cut the deficit, primarily though spending cuts. The Chamber chief also advocated more infrastructure spending on things such as road projects, and he said a higher gas tax is needed to fund those projects.
The Chamber also released a poll of small businesses that showed only 19% of businesses plan to add jobs in the next year, little changed from the 18% that increased their payrolls in the last year. Nearly 40% of those surveyed cited either worries about what the government will do next, the requirements of the new healthcare bill or too much regulation as the number one obstacle to hiring.
But economic uncertainty by itself was the biggest obstacle for 30% of those surveyed, while lack of sales was the biggest problem for 22%.
Nelson Ching, Bloomberg News
Lin Zuoming, president of Aviation Industry Corporation of China, with Jeffrey R. Immelt, G.E.’s chief, at a 2009 event in Beijing.
G.E. to Share Jet Technology With China in New Joint Venture
By DAVID BARBOZA, CHRISTOPHER DREW and STEVE LOHR
Published: January 17, 2011
As China strives for leadership in the world’s most advanced industries, it sees commercial jetliners — planes that may someday challenge the best from Boeing and Airbus — as a top prize.
And no Western company has been more aggressive in helping China pursue that dream than one of the aviation industry’s biggest suppliers of jet engines and airplane technology, General Electric.
On Friday, during the visit of the Chinese president, Hu Jintao, to the United States, G.E. plans to sign a joint-venture agreement in commercial aviation that shows the tricky risk-and-reward calculations American corporations must increasingly make in their pursuit of lucrative markets in China.
G.E., in the partnership with a state-owned Chinese company, will be sharing its most sophisticated airplane electronics, including some of the same technology used in Boeing’s new state-of-the-art 787 Dreamliner.
For G.E., the pact is a chance to build upon an already well-established business in China, where the company has booming sales of jet engines, mainly to Chinese airlines that are now buying Boeing and Airbus planes. But doing business in China often requires Western multinationals like G.E. to share technology and trade secrets that might eventually enable Chinese companies to beat them at their own game — by making the same products cheaper, if not better.
The other risk is that Western technologies could help China play catch-up in military aviation — a concern underscored last week when the Chinese military demonstrated a prototype of its version of the Pentagon’s stealth fighter, even though the plane could be a decade away from production.
The first customer for the G.E. joint venture will be the Chinese company building a new airliner, the C919, that is meant to be China’s first entry in competition with Boeing and Airbus.
For the most part, Western aviation executives say the Chinese are simply too far behind in both civilian and military airplane technology to cause any real fears anytime soon — although it does put pressure on Boeing and Airbus to continue to innovate and stay technologically ahead of China.
G.E., which said it had briefed the commerce, defense and state departments on details of the deal, acknowledges that pairing up with a Chinese firm is a delicate dance. But because the commercial aircraft market in China is expected to generate sales of more than $400 billion over the next two decades, it is not a party the company is willing to miss.
Eventually, G.E. executives say, China will become a potent player in the commercial jetliner market, and the company wants to be a major supplier to the emerging Chinese producers.
“They are committed for the long term and they have every probability of being successful,” said John G. Rice, vice chairman of G.E. “We can participate in that or sit on the sidelines. We’re not about sitting on the sidelines.”
Mr. Rice also said that the Chinese joint venture partner — the aerospace design and equipment manufacturer Aviation Industry Corporation of China, or Avic — has supplied G.E. with some parts for jet engines for years. And he said he had personally known Avic’s president for a decade.
“This venture is a strategic move that we made after some thought and consideration, with a company we know,” Mr. Rice said. “This isn’t something we were forced into” by the Chinese government.
G.E.’s new joint venture in Shanghai will focus on avionics — the electronics for communications, navigation, cockpit displays and controls. G.E. will be contributing its leading-edge avionics technology — a high-performance core computer system that operates as the avionics brain of Boeing’s new 787 Dreamliner.
The joint venture has a ready customer in the C919’s builder, the Commercial Aircraft Corporation of China, which is also a government-owned enterprise. The plane will be a single-aisle airliner, carrying up to 200 passengers, intended to compete with Boeing 737s and Airbus 320s. Although the Chinese hope to begin deliveries in 2016, analysts say the schedule may well slip.
With or without the C919, the Chinese market for commercial airliners is already huge and growing fast — a big market for G.E. jet engines and other systems, as well as Boeing and Airbus planes. But if the C919 grabs any significant slice of that market, it would represent a new, expanded opportunity for G.E. The company has already been chosen to supply engines for the Chinese plane, through its long-standing partnership with Snecma of France. Though the world’s largest producer of jet engines, G.E. has trailed other suppliers of avionics in overall sales, behind Honeywell, Rockwell Collins and Thales, all of whom competed for the C919 business.
Several other American companies have also been chosen as suppliers for the C919 aircraft, providing power generators, fuel tanks, hydraulic controls, brakes, tires and other gear. The roster of United States suppliers includes Rockwell Collins, Honeywell, Hamilton Sundstrand, Parker Aerospace, Eaton Corporation and Kidde Aerospace.
In fact, the corporate competition for contracts on the C919 became a “frenzy,” said Mark Howes, president of Honeywell Aerospace Asia Pacific. The Chinese government, he said, had made it clear to Western companies that they should be “willing to share technology and know-how.”
But the G.E. avionics joint venture, analysts say, appears to be the deepest relationship yet and involves sharing the most confidential technology. And G.E.’s partner, Avic, also supplies China’s military aircraft and weapons systems.
G.E. executives would not comment on the details of the joint venture. But a person involved in the talks said the 50-50 venture is for 50 years. G.E., the person said, is putting in technology and start-up capital of $200 million. Avic will initially contribute $700 million, the person said, including the cost of a new research and development lab already under construction.
To address American government security concerns, the joint venture in Shanghai will occupy separate offices and be equipped with computer systems that cannot pass data to computers in Avic’s military division, G.E. executives say. And anyone working in the joint venture must wait two years before they can work on military projects at Avic, they added.
While Boeing and Airbus would probably rather not see their suppliers help the Chinese so much, both those companies must also constantly balance the risks and rewards of operating in China.
Boeing has subcontracted parts work to China for many years, and it is expanding a joint venture in Tianjin that makes parts with composite materials for several of its planes. And Airbus has built a factory that assembles A320s in the same city.
Boeing has “opted to accept the reality of both partnering and competing with China,” Boeing’s chief executive, W. James McNerney Jr., said in a speech last year.
Indeed, China’s push into the commercial aircraft industry will probably increase exports from American aviation equipment manufacturers for years to come, according to industry analysts. Whether China succeeds or fails, the state-owned companies will keep investing, generating sales for the suppliers.
The real concern lies further head, according to a study of China’s strategy included in a report published in November by a bipartisan Congressional advisory group, the United States-China Economic and Security Review Commission.
The group concluded that China’s huge state subsidies for its own industry, its requirements that foreign companies provide technology and know-how to gain access to the Chinese market, along with the close ties between its commercial and military aviation sectors all raise concerns and “bear watching.”
The big aviation equipment makers say that, by now, they are experienced at grappling with matters of technology transfer in China. In Cedar Rapids, Iowa, Kent L. Statler, an executive vice president for commercial aviation at Rockwell Collins, observes that his employees often ask whether the company is trading its future for immediate sales in China.
“I think you’re naïve if you don’t take into account that you could be standing up a future competitor,” Mr. Statler said. Any company in a global business is in a race, he added, and staying ahead is the only defense. “At the end of the day, our technologies and processes have to continue to improve,” Mr. Statler said. “It comes down to who can innovate faster.”
Is GE Helping China Compete Against Boeing?
February 1, 2011
Things that make you go hmmmm.
The NY Times recently reported that GE would sign a lucrative joint-venture deal with a state owned Chinese manufacturer to provide the same high-tech avionics technology Boeing uses in their new advanced airliner the 787 Dreamliner.
Considering China’s recent introduction of a stealth fighter, does anyone besides me see this technology share as a bad thing. The technology includes the highly sophisticated computer control and networking system, core to the avionics brain of the Dreamliner. This sounds like a very bad idea to me.
The first customer of this joint-venture is the Commercial Aircraft Corporation of China, also a government owned company. They manufacture the C919 Airliner which is a 200 seater and directly competes with the Boeing 737.
This comes on the tail of Boeing’s recent announcement that a soft aircraft market has pushed them to layoff 1,100 workers across multiple locations. How many more layoffs will come should Boeing begin losing airliner sales to the Chinese?
Source: The Prodigal Scribe
While Ohio is traditionally thought of once being a center of auto manufacturing, there was such a strong tradition of light-bulb production in the state that the world's largest maker of light bulbs, General Electric, located the headquarters of its light bulb division in Cleveland. The jobs provided by light-bulb manufacturing allowed people to buy homes, send their kids to college, and fuel a vibrant economy in Ohio for decades.
But in the last decade, GE has closed over fifteen factories in Ohio and downsized numerous others. Since 1980, employment in GE Lighting has dropped by 68 percent.
A large chunk of that manufacturing has gone to China, and now GE plans to send even more to China in the wake of new clean energy policies. By 2014, Americans will only be able to purchase more energy efficient CFL light bulbs. However, GE has located all of its facilities for high-efficiency light bulbs to China and has told the union representing the workers that they have no intention to locate compact flourescent facilities in the United States.
GE is currently threatening to close one factory in Niles, Ohio that produces light bulbs. The workers, members of United Electrical, Radio, and Machine Workers of America (UE) at one are calling on GE to look for a way to refit their plant so that they can be part of the new clean energy economy. Ohio Sen. Sherrod Brown and Rep. Tim Ryan wrote a letter to GE's CEO Jeffery Immelt expressing "deep concern" for the workers at the plant:
"The workers and tradition of the Niles facility present an enormous opportunity to show how we can transition manufacturers from contracting industries, like incandescent bulbs, to emerging industries in energy and medical IT."
Ohio could indeed be a hub of new light bulb production. Recently, a Chinese-owned manufacturer of high-efficiency light bulbs has opened a factory, citing Ohio as having some of the world's most highly skilled light-bulb workers.
Ohio's legacy of bulb production, and its factories that could easily be converted from incandescent production to CFL production, presents a grand opportunity to employ workers in building a green energy economy in Ohio.
The IMPACT Act introduced by Brown in the Senate would help small and medium-sized manufacturers transition to the clean energy economy. Brown's bill creates a $30 billion Manufacturing Revolving Loan Fund to provide these manufacturers with much-needed access to credit to improve energy efficiency and retool for the clean energy industry.
The Apollo Alliance--a coalition of business, labor, and environmental groups--estimates that the IMPACT Act could create 680,000 direct manufacturing jobs nationally and 1,972,000 related jobs over the next fiver year.
So far, GE has shown every intention to take the American tax dollars being used to subsidize the green-energy economy and use them to build Chinese factories and pay Chinese workers. As I wrote earlier this week, in spite of GE CEO Jeffery Immelt's statement that companies need to stop outsourcing, GE continues to lead the effort to outsource clean-energy jobs. Most recently, GE has cut off a contract with a windmill factory in Indiana and shipped the work to China despite the factory offering to sell their parts at the same price as their Chinese competitors.
To add insult to injury to workers losing their jobs from foreign outsourcing, GE has even launched a television ad campaign promoting American manufacturing. "GE has the ability to locate its new manufacturing for CFL's, LED's, as well as the new incandescent lighting technologies in Ohio and elsewhere in the U.S. So far they have not done this, and we see no sign that they are even considering doing this. GE Lighting workers in the U.S. see little to cheer in GE's pronouncements and feel good advertising because for several decades now every plant has been on an extended deathwatch," said Chris Townsend of the United Electrical, Radio, and Machine Workers.
It's time that CEO's like Jeffery Immelt live up to their word and help rebuild the American economy by keeping American manufacturing jobs in America. It's also time that we adopt a comprehensive policy that promotes American manufacturing and prevents companies like GE from using taxpayer funds intended to stimulate the American economy to undermine our economy instead.
Follow Mike Elk on Twitter: www.twitter.com/MikeElk
Source: The Huffington Post
IT LOOKS LIKE IT'S TIME TO DO OUR PATRIOTIC DUTY AND BOYCOTT ANYTHING WE CAN THE JEFFREY IMMELT AND OR GE IS ASSOCIATED WITH: