Immelt on America going “all-in”
I had breakfast this week with Jeffrey R. Immelt, the chief executive of General Electric, and the main dish on the menu was tough love. In an interview before a packed hall in Times Square, the boss of the more than a century-old $177 billion global behemoth told me that Americans can still win in the global economy â€” but that they need to fight harder.
â€śWe are not trying that hard,â€ť Immelt said. â€śWe havenâ€™t really tried as hard as we can to compete, educate and sell our products around the world and I think we can do better.
â€śThe world just plays harder than we play,â€ť he said. â€śWhether it is on exports or whether it is on foreign direct investment, the rest of the world plays for keeps. And we just donâ€™t have a similar philosophy.â€ť
Chancellor Angela Merkel of Germany has her own reasons for feeling grim, but she can take some comfort from the fact that Immelt pointed to Germany, whose version of capitalism Americans are accustomed to dismissing as plodding and inflexible, as one nation that is outselling the Yanks.
â€śChancellor Merkel flies from Berlin to Beijing, thereâ€™s 25 German C.E.O.â€™s that get off the plane right behind her. And they connect the dots. They play hard, they play to win, they play for exports,â€ť Immelt said. â€śWeâ€™re not all-in the same way that the Germans are all-in.â€ť
Those are harsh words to hear from one of the foremost business leaders of the country that likes to think of itself as the worldâ€™s top capitalist dog. But Immeltâ€™s must-try-harder message is becoming the conventional wisdom in the United States, and not just among the angry 99 percent of the Tea Party and Occupy Wall Street movements. The 1 percent think so, too.
One measure of this elite consensus was the echo of Immeltâ€™s remarks in a speech that a different national heavyweight, Secretary of State Hillary Rodham Clinton, delivered a few blocks north and a couple of days earlier at another New York power breakfast.
â€śWe have to get better at playing offense,â€ť Clinton said. â€śOther countries are much more on the same team between business and government, and we need to be back on the same American team.â€ť
When populists on both the left and the right are angry enough to take to the streets, and when both a Democratic stateswoman and a Republican industrialist use almost identical language to describe Americaâ€™s poor performance in the global contest for business, you can safely conclude this is a country suffering from serious self-doubt.
That inner-directed gloom fits uneasily in a national culture that still tilts toward a faith in self-improvement, second chances and, most important of all, a first-place finish. Which is probably why Immeltâ€™s certainty that, if the United States does try harder, â€śIâ€™m completely convinced that we can compete and we can winâ€ť struck such a receptive chord.
â€śOur competitiveness in this country today is the greatest itâ€™s been in 25 years,â€ť he said. â€śI have never seen our competitiveness as solid versus India and China as I do today.â€ť
He repeated: â€śWe need to be all-in.â€ť
The competition Immelt and Clinton want U.S. companies to win is the battle for dominance in the global marketplace and for the checkbook of the growing global middle class.
â€śThere are going to be one billion consumers joining the middle class in Asia. I think for us to reduce unemployment, exports are going to be a key way to do it,â€ť Immelt said. â€śItâ€™s this countryâ€™s only destiny just because most of the consumers are some place other than here.â€ť
As a cautionary counterexample, Immelt cited Japan. â€śLook, when I was a young guy, when I first started with G.E., Jack Welch sent us all to Japan because in those days Japan was gonna crush us,â€ť he said. â€śAnd we learned a lot about Japan when we were there. But over the subsequent 30 years, the Japanese companies all fell behind. And the reason why they fell behind is because they didnâ€™t globalize. They didnâ€™t have to go out and sing for their dinner in every corner of the world. Thatâ€™s not the case with G.E. Itâ€™s not the case with other American multinationals.â€ť
Immeltâ€™s sunny enthusiasm for export-led growth captivated his audience. That is partly because Immelt is a consummate salesman â€” and proud of it. As he said, â€śfirst and foremost my job is to sell jet engines, gas turbines and scanners. Thatâ€™s my job.â€ť
After an hour of listening to him, I felt a strong urge to buy a gas turbine myself, and I eavesdropped on several conversations about what a great senator or even president a post-G.E. Immelt would make.
But it is also because an open global economy in which everyone is getting richer and in which a reinvigorated United States has the confidence to win appeals both to American patriots and to American internationalists.
As with all dream scenarios, though, there is a catch or two. The first is that export-led growth is a terrific strategy — thereâ€™s a reason everyone is looking these days to Germany and China — but it only works if some countries are taking the opposite tack of building their economies around consumption. As Lawrence H. Summers, a former secretary of the Treasury, likes to point out, there are no Martians. The whole world canâ€™t be German or Chinese — you also need some Americans and Greeks, and the long-term fate of those consumer nations isnâ€™t so pretty.
The second, related catch is that, for all the talk of Team Germany and Team U.S.A., thatâ€™s only partly how the world economy works. Immelt is proudly and emphatically American — â€śI love the U.S., periodâ€ť — but he told me that his successor might well come from the emerging markets. Thatâ€™s no surprise: Smart businesses have figured out how to globalize. We donâ€™t yet know if countries can do the same.