Jeffery Immelt, the CEO of General Electric, has led the outsourcing charge in the past. So commentators were shocked last month when, speaking at the Detroit Economic Club, Immelt said that the United States needs to invest in American manufacturing in order to get out of our current economic crisis.
Some companies had gone overboard with outsourcing in the past and now it was time to bring that work back into the United States to create a strong economy, Immelt said at the forum. "This country ought to be, and we can be, not just the world's leading market but a leading exporter as well. GE plans to lead this effort," he said.
Immelt should heed his own advice.
While Immelt was calling for manufacturing to stay in the U.S., his company was at the same time shipping manufacturing jobs overseas by canceling an order with an American-based wind turbine maker, ATI Casting Service in LaPorte, Ind., so that GE could instead buy the parts from a factory in China.
Recently, ATI made $30 million worth of investments to buy, convert, and modernize a shuttered factory in economically ravaged Michigan so the company could provide more parts to GE as the green economy expands with federal stimulus funding. But a Chinese firm underbid ATI, and the factory faced having to lay off 302 union workers and shutter the plant.
In an aggressive bid to keep the factory open, ATI offered to match the price of the Chinese producers. GE once again said they would prefer to buy from China. The ATI plant is now closed, the jobs gone.
After Immelt pledged to create jobs in America, for him to make a U.S. company shed jobs so GE can buy Chinese goods for the same price is beyond hypocritical.
More troubling is the fact that President Obama is receiving his economic advice from people like Jeffrey Immelt. Immelt serves on the president's Economic Recovery Advisory Board, but is doing very little to encourage economic recovery himself. "This is an unacceptable example for the country and the promise that the 'green' economy will lead to a manufacturing revival," said Leo Gerard, president of the United Steel Workers.
Gerard has accused Immelt of being a hypocrite, not just for undermining ATI, but for doing so while raking in millions of dollars in federal stimulus money intended to support a "Buy America" strategy.
It's time that lawmakers put a stop to this madness. Today, the Senate Environment and Public Works Committee is holding a hearing on Capitol Hill with governors and mayors to look at ways the U.S. can adopt a comprehensive manufacturing job policy that makes sure that the green economy keeps jobs here in America. Through a series of measures, including incentives for companies to stay in America, "Buy America" provisions and trade law reform, lawmakers like Ohio Sen. Sherrod Brown are hoping to keep green jobs in America.
The president correctly views the green economy as the pathway to economic recovery. But if the windmills, solar panels and other key building blocks of that economy are made in China, we'll only end up in deeper debt. As Campaign for America's Future fellow David Johnson noted in his blog post "It's the Economic Paradigm, Stupid!" without a new American manufacturing policy there will be no economic recovery. We need to move beyond a bubble economy built on debt and financial speculation and into a real economy that actually makes products.