The beleaguered manufacturing sector got a shot in the arm this week from the CEO of the world's leading industrial company. In an interview Thursday, General Electric's (GE) Jeffrey Immelt said his company would be investing in manufacturing in its leading markets, including the U.S.
Speaking to Norman Pearlstine, chairman of Bloomberg Businessweek, at the 92nd Street Y in New York, Immelt said that because "the marketing of your company is really embedded in jobs today in the U.S., in China, every place else, what that means is your production and your investment is going to be aligned with where your markets are ... The U.S. is still a big market for us, we're going to put more jobs here."
Although he said the company had moved its appliance manufacturing in the past twenty years to China and Mexico, "at my level, if we make more money on a refrigerator made in Mexico, I can't find it."
Good Markets Means Good Jobs
"So the next generation of those products are going to be made in the U.S.," Immelt said, adding that "places that don't have good markets but might have low costs are going to lose jobs, places that have substantial markets are going to get jobs. I just think the way we look at it is we are probably going to put more manufacturing jobs in the U.S., both to be an exporter, but also to support some of the local production."
"If you have a business that is very scale-dependent and very high-tech, like the jet-engine business, we are probably going to make jet engines in the United States and export them to the rest of the world ... for as long as I have this job." he said.
However, he said GE would make other products, like MRI scanners, in China, where demand is strong. "The big, high-tech stuff will be exported from the U.S., or from Europe or wherever you've made it. Some of the technology-based products that have more of a local tailoring or local demand, those are going to be localized," he added.
Immelt said it is wrong to assume that a country can thrive without a technology or manufacturing base. "I hope that gets beaten into the head of every American. Not that we're anywhere close to Europe, but there are things that are going on there that ought to be cautionary tales for us," he said.
Wall Street Still Important
Immelt attributed the steep decline in the stock markets Thursday to global economic volatility. He said, "We just live in a more volatile world in general... People look across Europe and say, 'Governments have a lot of leverage, unemployment is high, economic growth is low,' and are concerned about a contagion across Europe. And that's just made the market very volatile."
Immelt also defended Goldman Sachs (GS), which he said "has been a partner to GE for a long time. We trust them, they've done great work for us... This point about damning Wall Street isn't good for the American economy." However, he urged Wall Street bankers to "take care of their own compensation. It just shouldn't be this kind of problem. I trust them to manage their own reputation, because we need them, we need Wall Street."
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