We all know that the Obama administration trots out the evil corporate stereotype time and time again. Whenever they need to justify another big government program, the president and his advisors are quick to criticize oil companies, pharmaceutical manufacturers, insurers, the banking industry and anybody else who dares to turn a profit in the private sector. There is one significant exception to this rule however: the $150 billion conglomerate known as General Electric.
The company, its chairman, Jeffery Immelt, and the Obama administration have recently been the target of pointed criticism after GE announced its intention to partner with China’s state-owned Aviation Industry Corporation to develop airliners. In addition to concerns over China’s dubious record in honoring patents and keeping industrial secrets, many see the move as a slap in the face to the hundreds of thousands of Americans who work for Boeing and for companies who are part of Boeing’s vast supply chain.
The irony of course is that Immelt, who Obama tapped to head the President’s Council on Jobs and Competitiveness, approved a venture that would both create overseas jobs and threaten domestic employment. “We are all in and we don’t want it back,” said Lorraine Bolsinger, chief executive of GE Aviation Systems.
But this is nothing new when it comes to Immelt and Obama’s cozy relationship, and the way that GE has profited from both corporate welfare and government-sponsored rigging of the marketplace. Anyone who was surprised by GE’s latest move hasn’t been paying attention.
“Jeff Immelt is perhaps the CEO who is most cozy with President Obama,” journalist Tim Carney said in an interview with John Stossel. “General Electric is structuring their business around where government is going … high-speed rail, solar, wind. GE is lining up to get what government is handing out.”
Arguably, no company has positioned itself better to take advantage of the “green revolution” in American energy production. The flip-side of GE’s commitment to “eco-engineering” is that the company would be hurt badly if the nation returned to a sensible energy policy that utilized the full spectrum of our vast natural resources.
A bevy of new regulations promulgated by the Obama administration have made it virtually impossible to build any more large coal-fired power plants in the United States. Moreover, that same pile of regulations will result in tens of thousands of megawatts of coal-fired power coming off the grid over the next couple of decades.
What will take the place of all that coal-fired power? Two sources of power will become more and more important as coal-fired generation assets are retired: wind and natural gas. The first has limited practical application, because it’s expensive and unreliable, but the government sponsored green-fever that has gripped the United States ensures that we will continue to build the ugly monsters in ever increasing numbers. And who is the biggest manufacturer of wind turbines in the United States? GE Wind Energy.
Windmills do not (and cannot) supply base load power like a coal plant or a nuke. The only way to add base load capacity quickly in the amounts that will be needed is with natural-gas fired turbines. And who is the biggest manufacturer of natural gas fired turbines in the United States? GE Power Systems. As Carney observed, the virtual partnership between the United States government and General Electric seems to be central to GE’s market strategy.
GE also received TARP money, thanks to the way the Obama administration stretched the definition of a bank to include GE’s financial arm. But not only did the company get tax dollars to cover its losses in the financial meltdown, it also used those losses to avoid paying federal taxes in 2009 and 2010, despite the fact that GE as a whole was quite profitable both years. Yet, while the Obama administration demonized financial institutions that had actually paid the government pack for daring to rack up profits afterwards, GE is above criticism.
In many ways, the company that Thomas Edison founded is an American institution. GE management and employees take justifiable pride in the innovation and quality that continue to define the company in an increasingly competitive global market. That’s what makes the company’s recent behavior all the more troubling. If there is one company that ought to stand up for free market principles and remain fiercely loyal to the American worker, it’s General Electric. But, under Immelt, the company continues to betray both. The deal with China is just the latest example of this disturbing and continuing trend.