It's Time to Wake Up

It goes against my grain when I hear corporate executives explain that it is essential to the United States' economic future that our technologies should be made into joint ventures with foreign countries, especially China.

In particular, hearing GE's Chief Executive, Jeffrey Immelt, justify his decision to provide China, via a joint venture, with highly-valuable next-generation avionics technology reminds me of Judas doing his dastardly deed for 30 pieces of silver. I believe that when the dust settles, GE will have traded some core competence for a short-term gain. Adding insult to injury, partnerships such as this do nothing to help the United States build its manufacturing base. Furthermore, in seven to ten years, if not sooner, GE can pat itself on the back for creating a major competitor for U.S.-based Boeing and Europe's Airbus.

To make matters worse, under the direction of Immelt, GE announced that its healthcare unit is relocating the X-ray business headquarters from Waukesha, WI, to Beijing. In addition to moving the headquarters, GE plans on investing an estimated $2 billion in China to train more than 65 engineers, as well as the creation of six research centers. While GE does not report the financials of its X-ray business separately, it's worth noting that GE Healthcare, which is the world's largest maker of magnetic resonance imaging (MRI) and cardiac tomography (CT) scanners, generated about $1.1 billion of its $16.9 billion in sales from China last year. Yet, the company is willing to invest double that amount and relocate its X-ray business headquarters to gamble on double-digit growth rates, which the Chinese government will eventually curtail. Again, in seven to ten years, if not sooner, GE can pat itself on the back for creating major competitors to compete against U.S. medical device manufacturers. It's a high price to pay for such short-term profits.

It's time we wake up and work to end all this craziness. Just look at what has taken place during the past two years. GM took TARP money and is building factories in China. Harry Reid favored the use of Stimulus money to acquire windmills from China. GE received a $3 billion handout from the taxpayers and got away without paying one dollar in taxes on billions of dollars in sales.

Adding to this craziness, Immelt was appointed by President Obama to head the Council on Jobs and Competitiveness. As head of this commission, Immelt is supposed to help create jobs here in the United States. However, based on his recent actions, and the fact that GE now employs more people overseas than it does in the United States, Immelt must have misunderstood the objective.

In the long run, trading years of process development and new technology for short-term gains is a losing proposition.

Let's wake up.

 

tgrasson@gie.net