Saturday, June 27, 2009

Being General Electric II

A few months ago I wrote a post, Being General Electric, where I bemoaned the fact that a once great manufacturing company had become a financial one which became the downfall of its greatness. Yesterday, Jeff Immelt, the CEO of GE, spoke before the Detroit Economic Club. Below are excerpts from his speech with my analysis in between. The outline was taken from an article, American Renewal: Immelt Addresses the Detroit Econ Club.
"Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a services-led, consumption-based economy — and somehow still expect to prosper. That idea was flat wrong."

NO KIDDING!!!!!!!!!! I LIKE THIS GUY!!! (I HOPE HE'S NOT HERE IN DETROIT MERELY PREACHING TO THE CHOIR!)

"Recently my colleague Peter Loescher, the CEO of Siemens, extolled the importance of Germany as an exporting country. In my career, I have never heard an American CEO say that the United States should be leading in exports. Well, I am saying it today: This country ought to be, and we can be, not just the world’s leading market but a leading exporter as well. GE plans to lead this effort. We have restructured during the downturn, adjusting to the market realities. At the same time, we are increasing our investments. We plan to launch more new products during this downturn than at any time in our history. We will sell these products in every corner of the world. We are creating a better company coming out of this reset. Similarly, America needs a dramatic industrial renewal. We have to move forward on five fronts."

First: Increase investment in research and development. "GE has never forgotten the importance of R&D. Each year, we put six percent of our industrial revenue back into technology — so much that more than half of the products we sell today didn’t even exist a decade ago. As a consequence, we are a huge exporter… GE’s R&D budget has not been cut. And that’s a course of action I’d recommend to every company that wants to get through the economic crisis even stronger than before."

YES!

Second: America should get busy addressing the two biggest global challenges — clean energy and affordable health care. "There is no question whether there will be breakthroughs in these areas — just by who and when. The leader in these fields will dominate the global economy in the decades that come."

WE SEEMED NOT TO HAVE CARED MUCH ABOUT THE FUTURE BY SIMPLY NOT ADEQUATELY PREPARING FOR IT.

Third: We must make a serious commitment to manufacturing and exports. "This is a national imperative. "We all know that the American consumer cannot lead our recovery. This economy must be driven by business investment and exports… America has to get back in that game … and it starts with a strong core of innovation."

MANUFACTURING AND EXPORTS??? YES!

Fourth: We should welcome the government as a catalyst for leadership and change. "There’s a long history in this country of government spending that prepares the way for new industries that thrive for generations. Think of the NIH or NASA, and all the new innovations that came out of these programs — from computing to communications to healthcare. America has that kind of chance with unprecedented levels of new government investment. ... The key is making sure those hundreds of billions of dollars fall on the fertile ground of innovation, and not bureaucracy."

INNOVATION, NOT BUREAUCRACY??? HELL, YEAH!!! I WONDER HOW MR. IMMELT TAKES CHALLENGES TO HIS OWN IDEAS AND AUTHORITY? I HOPE WELL! GOD, I HOPE SO!!!

Fifth: It is possible for a global business leader to also be a good citizen. "We must partner in our communities. Big business should work with smaller companies in our supply chain to help them compete globally. And we should partner with local governments to fix our education system. In the end, business leaders are accountable for the competitiveness of their own country. We must say so publicly. This will not hurt our ability to globalize. Rather, I think it will make other countries admire our business leaders more. We must end the impression that American CEOs are short-term speculators."

NO TRUER WORDS COULD HAVE BEEN SPOKEN! WOULDN'T IT BE GREAT IF GE COULD ACTUALLY ACCOMPLISH THESE THINGS???
With Mr. Immelt's leadership, General Electric may be able to rise again. Let's hope so!

12 comments:

Marion said...

Sounds good, Judith. I only hope it comes to pass. Our country is desperately in need of intelligent, forward-thinking leadership in every sector of our economy.

I would love to pick up an item, any item, in a department store that had 'Made in America' on it.

I'm so sick and tired of appliances that fall apart after a few years. When I was younger, I had a GE washing machine that my neighbor gave me after she'd had it for over 20 years. I used it for another 10 years before it finally died. More recently, I've had 4 new washing machines in less than 10 years and had to call a repairman twice to replace shoddy, plastic parts that he says used to be made of steel. What's wrong with this picture?!

Great post!

Judith Ellis said...

Marion - Thanks for your story. It reminds me of the sense many people had about Detroit automakers: planned obsolescence. During this time they lost many American purchasers to foreign manufactures. Now, they are working to get them back. (Also, I'm not sure if free trade is fair across the board.) I trust that it is not too late. To me it seems absolutely imperative that a country the size of our produces the bulk of its own cars and other products. To become a service-based economy alone is death as I see it.

Dave Wheeler said...

Judith,

"We should welcome the government as a catalyst for leadership and change."

Some how, and it may just be contextual, this makes me nervous. If it is in fact simply about spending I could agree. But I keep thinking about the 45 years this country has been fighting a war on poverty and the ineffectiveness of many of the services, policies and programs the government has established to correct the inequities and issues. Fixing education isn't just about schools. It's about the other socio-economic issues that affect families and their children.

Excellent post Judith...thanks!

Pamela said...

There was a time when all Americans were not afraid to take risk, to work to bring about change. Hopefully this is what we are heading towards. A country leading in green technology and health care.

I was moved by GE's commitment to continue in their path of R&D, to look beyond this difficult time to a brighter future ahead. Not just looking forward to it, but taking measures to work towards it.

Each home should take a page from GE's book to get through this difficult time.

I agree Judith time given to our children, loved ones, friends and even strangers is invaluable. I especially enjoy dinner time with my family.

Judith Ellis said...

I understand your concern, Dave. But if we do not speak into this staid environment hope--earnest expectation--that things can be different and follow it up with innovation, void of crippling bureaucracy, we will never accomplish leadership and change that make the difference. We should expect from our government exacly what Mr. Immelt has spoken of and NOTHING less. "We are the people."

It is most important that we SPEAK what we want to see and follow-through with actions. It is also about the bureaucracy spoken of in the post. Now, let's hope that those who hold the power will execrise humility in leadership and listen to others, no matter the rank.

"Fixing education isn't just about schools. It's about the other socio-economic issues that affect families and their children."

We have long known that it takes a village to raise a child. This afternoon I took my niece, Raven, on a shopping spree. We spent many hours in Somerset Mall, a place where you will rarely find me on a Saturday afternoon. But she loved it, so I was happy. I also added my two cents about what was appropriate and what wasn't for her age and gently insisted one one elegant outfit, of the many purchased. It was most beautiful, but the most expensive. C'est la vie!

I took this time together to initiate conversations and to mostly listen to her. She has great parents and went to the very best schools, but what I also know is that young people need affirmation by more than their parents. Tomorrow, I will go and visit my niece, Katie, at my alma mater, UofM, and do the same. I spend time with my nephews equally. (It's not that I'm rich. I just spend less on myself throughout the year so I can give more and I'm totally fine with this.)

I might also say that the best things that we can give children are not physical. The lessons of honor, morality, discipline, respect, kindness, sharing, deference, etc. do not require cash. It requires something more: our example. We did not have a lot of money growing up, but what we were given by my mom, even my dad when he visited, aunts, uncles, neighbors, teachers, and church members was invaluable.

Judith Ellis said...

"I was moved by GE's commitment to continue in their path of R&D, to look beyond this difficult time to a brighter future ahead. Not just looking forward to it, but taking measures to work towards it."

YES, Pamela!

dave wheeler said...

Judith,

"I might also say that the best things that we can give children are not physical. The lessons of honor, morality, discipline, respect, kindness, sharing, deference, etc. do not require cash. It requires something more: our example. We did not have a lot of money growing up, but what we were given by my mom, even my dad when he visited, aunts, uncles, neighbors, teachers, and church members was invaluable."

There are millions of teachers and employers who would agree 120,000.000 percent with that statement. Many of the life's lessons that used to be taught in the home and community is knowledge no longer learned. The Federal Government can set all the standards it wants to but if it doesn't provide the resources to increase the capacity of each school level administrator and teacher to meet the needs of it's "customers", what's the point? The "one size fits all" approach to school improvement clashes with the reality that each school is a unique community...yet who gets blamed when performance doesn't meet the standard? School level administrators and teachers of course!

Judith Ellis said...

Hmm? Good points, Dave. But I am more inclined to believe in some form of standardized system. While the emotional and physical needs of children vary, and even how they comprehend, what children learns in Detroit should be no different than what they learn in Vermont.

The special attention comes in through the teachers and administrator who are teaching and administrating based on the particular needs of their students. The how is important here, not only what.

Some have argued that for African American children back in the day that it was better for them to have been in a segregated school in some sense, as there were teachers within the system who deeply cared about them and once they left that system, having been bused to another, they were on their own. That, of course, does not answer the problem today for the failures in inner city schools.

I am for a standard system. I think that a lot of what we are experiencing right now in the major drop off in science and math, even English, is the breakdown of the educational system that the 60's movement brought in. Some of it was good and some of it definitely was not. We always tend to go the extreme, one way or the other. We throw the baby out with the bath water.

Thanks for your comment.

dave wheeler said...

Judith,

I agree on the need for standards. The problem occurs when standards are set and the resources that are needed to enable folks to meet them are not provided.The resources however that are needed differ school to school given the needs of the students, parents and communities they serve.

Judith Ellis said...

Dave - I appreciate your sense of making students customers in the sense of service and responsibility, as one would a business, holding leaders and managers responsible for outcome and beseech the community at large be involved.

I did this as a consultant for the City of Detroit designing and developing after school activities for kids which included additional learning and the arts. We had large crowds at our tutoring sessions and performances. The community buy-in included parents and local businesses. The programs were very successful.

There is no doubt that progams such as "No Child Left Behind" was a worthy one, yet not funded as it should have been; all sides seem to agree here. The funds, however, are largely based on tax dollars and schools in the inner city are less funded. Now, the program above was a federal one and it should have met the need, if administered well in all aspects, and made a difference. But as we know, the village is key.

dave wheeler said...

Judith,

The village is indeed key. It too has changed over the years. It has less time, less resources and less of a sense of responsibility than in the past. It's a challenge but when folks see the value of collaboration on common issues they can see they really can make a difference.

Judith Ellis said...

I am quite sure that with each generation the one before it thought that the village had changed and I'm sure in many ways it had indeed.

I wonder, however, if these times of profound change are circular and if we get back to the essence of those things which are most important in time. I am now considering the ancient battle for the soul of humanity between the Stoics and Epicureans. Both could be considered extreme in many ways.

Yes, the village changes over time, but I have to believe that the basics that make us human never change at core; it just shifts from time to time. The key is to recognize when we have gone too far one way or the other--since we do not seem to be good with being moderate--and adjust sooner rather than later.