Obama’s jobs czar, General Electric Chief Executive Officer Jeffrey Immelt, reassured stockholders in a letter Friday the company is still a solid investment despite most government policies perpetuating a cycle of “slow growth, poor job creation, populism, low productivity, higher regulation, poor policy and more slow growth.”
The executive – who was appointed to the president’s Economic Recovery Advisory Board in 2009 and chairs an outside panel of economic advisers – touted the strides GE has taken to stay strong during a time of global uncertainty, making moves like removing itself from financial services, where it “lacked competitive advantage,” and completing its largest industrial deal through its purchase of Alstom’s energy businesses.
“In business, if you don’t lead these changes, you get fired; in politics, if you don’t fight them, you can’t get elected. As a result, most government policy is anti-growth,” he wrote. “In the U.S., we want exports but seem to hate trade and exporters; globally, governments love small businesses but then regulate them to death.”
Regulatory burdens on businesses have significantly increased under the current administration, and according to the Chamber of Commerce, the president has 3,000 more in the pipeline before the end of his term.
Immelt slammed the prospect of negative interest rates being the most promising growth policy for the country, adding it’s unacceptable 2015 was the tenth consecutive year GDP growth fell under 3 percent, which was once “considered our entitlement.”
Despite his ties to the president, the CEO said corporate political correctness is invading businesses, causing them to lose their competitive advantage in the global economy.
“It doesn’t do any good to win awards for good governance if you are getting eaten alive by competitors,” Immelt wrote. “Our sole truth of performance is in the market, winning with customers and investors.”
The letter alleges, while many investors have criticized corporations for being overly short-term oriented, large institutional investors are equally at fault.
“They have allowed governance to become too legalistic, about politics instead of protecting the average investor. It is confusing for investors when they are told that company leadership is about filling out forms, not bold growth strategies,” it reads. “It takes strong leadership to bridge the divide between activist regulation pushing you backward and activist investors who want more right now. It is possible to be ultra-competitive, strategically bold and disciplined at the same time.”
Immelt went on to say, to continue GE’s success, it can move production to the lowest-cost regions and capitalize on excess capacity or currency.
“We don’t try to pick a cycle, or time a market, or complain about elections. We will always act to get more out of this economy than our peers. We believe in ‘self-help,’” he said. “We are aggressively managing our cost structure to capitalize on deflation. In 2016, we will fund a record level of restructuring. We have a very strong balance sheet with excess cash.”
General Electric took heat in September for moving 500 jobs overseas with plans to move more.
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