By Keith Johnson
The latest bad news for America’s evaporating manufacturing and technology industries comes from the good folks at General Electric (GE) who recently announced that they will be moving the global headquarters of their century old X-ray division from Wisconsin to Beijing. This is all part of GE’s larger effort to invest nearly $2 billion throughout the People’s Republic of China, where it also plans to open up six new customer innovation and development centers.
GE has defended its recent decision by claiming that no domestic jobs will be lost as a result of the transition. However, GE executives fail to address the future jobs that will now only be available to Chinese workers. GE Healthcare executives admit that they expect to produce 20-25% of their products in China over the course of the next two to five years.
GE also fails to address the dangers of exposing sensitive intellectual property and proprietary trade information to a nation that is notorious for counterfeiting. USA TODAY’s Calum MacLeod recently wrote about China’s growing “shanzhai culture,” an element within Chinese society that delights in making cheap knockoffs of brand-name products. MacLeod interviewed Paul Ranjard, an intellectual property lawyer in Beijing, who said, “there is too much tolerance of the shanzhai. It’s infringement, but there is an ambiguous attitude” in Chinese society and its courtrooms.
Throughout China, numerous underground manufacturing plants have been discovered that produce facsimiles of everything from Duracell batteries to Apple computers.
It should be quite obvious that United States-based companies like GE are literally handing over the blueprints of American technology to the Chinese.
Meanwhile, here in the U.S., GE’s physical presence continues to diminish from the American landscape. “GE has closed 29 factories in two years,” says Scott Paul, executive director of the Alliance for American Manufacturing. Since 2002, GE has laid off one-fifth of its American workforce despite rising profits and diminishing tax liabilities.
One might think that GE’s latest move would provoke a scathing condemnation from the president’s new jobs czar, Jeffrey Immelt, who vowed to help create 1 million new jobs by the end of the year. However, such an indictment is not likely to come from Immelt, who not only chairs Obama’s Council on Jobs and Competitiveness, but is also the current CEO for General Electric!
Though it’s hard to imagine a more brazen conflict of interest, it seems to be of little consequence to Immelt, who has no problem holding others accountable to the high standards he refuses to abide by himself.
Last July, Immelt had strong words for a group of businessmen attending a jobs summit at the U.S. Chamber of Commerce. “The people who are part of the business sector, the people in this room, have to stop complaining about government and get some action underway,” he declared.
“There’s no excuse today for lack of leadership. The truth is we all need to be part of the solution.”
Immelt may find those words easy enough to say, but his company certainly hasn’t put them into practice. Ever since the General Agreement on Tariffs and Trade (GATT) opened the U.S. labor market to competition from low-wage nations, GE has been one of the leading outsourcers of American jobs and now employs fewer of its 304,000 workers at home than it does abroad. Hypocrite Immelt is largely to blame. Since taking the helm of GE in 2001, he’s hired almost as many people overseas as he’s laid off in the United States.
Keith Johnson is a writer based in Tennessee. He can be contacted at [email protected].