Last June, General Electric Chairman Jeffrey Immelt visited Detroit and issued a clarion call to America’s leaders. He warned that America could not remain an economic superpower if it produced only services, and said, “We must make a serious commitment to manufacturing and exports.” He went on, “We should set a national goal to create high value-added jobs and have manufacturing jobs be no less than 20 percent of total employment, about twice what it is today. And we should commit ourselves to compete and win with American exports.”
Surrounded as he was by the wreckage of America’s faltering auto industry, Immelt’s remarks seemed to signal a dramatic departure from GE’s past practice of sending jobs abroad — a ray of hope in a region where optimism has been in short supply for a long time. But barely three months later, Immelt offered a very different vision of the future in an essay he co-authored for the Harvard Business Review. He said GE would change its system for developing new technology, which had been centered in America since the time of Thomas Edison, to develop new products in emerging markets such as China. The innovations would then be exported to America and other developed markets.
GE didn’t lose any time in implementing the latter vision. The November 16 Wall Street Journal reported the company planned to make a “substantial” investment in a joint venture with Aviation Industry Corp. of China to supply electronics to the world’s commercial airliner industry. The paper quoted GE representatives describing the systems they will build in China as the “brains” of an aircraft, and said GE intended to make the Chinese venture “its main platform to develop avionics systems for global commercial aircraft makers.”
China does not currently build such aircraft, but it wants to. It has set its sights on becoming a direct competitor to Airbus and Boeing in the commercial transport market. And now GE is accommodating that aspiration by agreeing to share technology for the brains of sophisticated planes with one of China’s lead aviation companies. This sure doesn’t sound like what Chairman Immelt had in mind when he talked to the Detroit Economic Club last June. Apparently GE only wants to save the American economy when it’s convenient. When there’s money on the table, it will lead the pack overseas.
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