Monday, February 27, 2012

Insourcing at GE

Buried on page B7 of today's Wall Street Journal (but highlighted by different editors in the front page "What's News" section, is an item entitled "GE's Work Force Rose in 2011 First Time in Years."  The real story is that all of GE's employment growth was overseas.

That might be embarrassing for a company whose CEO serves as President Obama's cheerleader to the Fortune 500, and business-bona-fides fig leaf to the public.  The President hopes to draw attention to GOP presidential hopeful Mitt Romney's outsourcing to save dying companies at Bain Capital.  

You may recall the President's recent jab at Romney--his announcement of an "insourcing" initiative to bring jobs home.  Perhaps Immelt wasn't in on the strategy loop, or is switching his allegiance to bird-of-a-capitalist-feather Romney.
The overall uptick marks the first job growth for GE in four years. The number of GE workers has been on the wane since 2007, when the Fairfield, Conn., company employed 327,000 people world-wide. At the time, GE employed 155,000 people in the U.S.
GE's U.S. work force is something of a sensitive issue for Chief Executive Jeff Immelt, who serves as chairman of President Barack Obama's jobs and competitiveness council and has urged business leaders to do more to spur domestic job growth. 
The company employed 131,000 people in the U.S. at the end of last year, down 1.5% from 133,000 at the end of 2010.
GE's overseas employment--outsourced jobs that aren't in the US because they are in other, less-costly, non-union countries--grew by 10%, or 17,000 jobs, to 170,000 employees.

The company explained that US employment shrunk due to GE's sale of NBC, which reduced its US workforce by 12,000 people.  It didn't comment on why it is beefing up operations in foreign countries rather than in the US.

Back on the political front:
Mr. Obama has tried to brand himself as a crusader for the middle class and touched on that theme Wednesday as he praised companies for bringing jobs back from abroad. 
He’s not spending much to advance the goal. Mr. Obama said his fiscal 2013 budget will include a request for $12 million in new resources to increase a federal program that promotes business investment in the U.S.
Twelve million here; twelve million there; pretty soon you're talking about real money.

On the public relations front, GE also announced that it is hiring 5,000 military veterans over the next five years.  Given that it will likely be angering domestic job watchers by hiring many more people in foreign countries, one might view GE's gesture as a novel use of the military to extend an olive branch.

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