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GE chief steps in as Obama's top job promoter

By Allan Chernoff, CNN
STORY HIGHLIGHTS
  • GE executive Jeffrey Immelt will lead the Council on Jobs and Competitiveness
  • He sees American manufacturing as a jobs generator
  • "To create manufacturing jobs we've got to be innovating and ... exporting," he says

New York (CNN) -- When President Obama stresses his goal of job creation during his State of the Union address Tuesday night, one chief executive in particular will be under pressure: General Electric boss Jeffrey Immelt, who has signed on to lead the president's new Council on Jobs and Competitiveness.

Immelt's game plan for job growth is surprising. He sees American manufacturing as a jobs generator, which would seem counterintuitive because manufacturing in the United States has been in decline for decades as companies have outsourced millions of jobs overseas to lower-cost producers.

During an exclusive interview with CNN Friday just before he led the president on a tour of GE's steam turbine and generator factory in Schenectady, New York, Immelt said American corporations should be exporting products -- not jobs -- overseas.

"We've got to invest and we've got to drive exports. Ninety-five percent of the world's population is outside the U.S. Ultimately, to create manufacturing jobs we've got to be innovating and we've got to be exporting," he said.

Immelt acknowledged hiring gains may be gradual, though, because companies are operating more efficiently than ever, meaning they can produce more with fewer employees, and the nation is still shrugging off the impact of a deep recession.

"There's no easy button to push to make the economy better, but every day we see more signs of life," said the General Electric CEO. Immelt went even further during an investor conference call Friday morning after GE announced a 31% gain in fourth-quarter earnings, telling Wall Street analysts, "The economy is getting better every day."

GE's plant in Schenectady exports 90% of the turbines and generators it produces. As he toured the plant, Obama saw components that would be heading to Kuwait, Saudi Arabia, Peru and India. General Electric is providing steam and gas turbines to expand the Samalkot power plant in the state of Andhra Pradesh, India, a deal worth $750 million that was announced last fall during the president's visit to India.

Export growth has contributed to GE hiring about 10,000 new workers over the past year, including several thousand in manufacturing, said Immelt, adding that his company is able to compete globally in part because labor makes up a relatively small percentage of the final cost of goods like turbines and generators.

"In the high-tech products we make it's mainly material content. Labor content is lower. So our guys can compete with anyone in the world. Our markets are export markets. That's going to drive manufacturing," Immelt said.

But American manufacturers who produce inexpensive products, where labor is the primary cost, don't have GE's competitive advantage. In other words, for all of Obama's urging that U.S. companies add more workers, American apparel, toy, and household product companies are not likely to embark on a hiring binge.

Immelt is well aware of that competitive gap. He says U.S. companies must also innovate to create more jobs. Green energy is an industry in which he sees tremendous growth potential, as does the president. Immelt said, however, that Obama must be more aggressive in promoting energy-efficient industries.

"I think we need to do more so we can be on a competitive footing in nuclear power and wind power with our competitors from Germany and China, so we have to do more," he said.

There's also a cheerleading component to Immelt's new role. His message to his colleagues in corporate America is: "For the CEOs that have cash, now's the time to invest. The economy's getting better. Let's go!"

 
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