Bernie Sanders Quotes Jeff Immelt: “I am a Nut on China”

This was, IMO, the highlight of Bernie Sanders’ non-filibuster on Friday:

GE is of course one of our major corporations, and in fact this recent disclosure pointed out the taxpayers of this country, through the Fed, provided $16 billion in bailout to General Electric during the recent crisis. This is what the head, CEO, of General Electric, Jeffrey Immelt, said in 2002, December 6. Quote, Jeff Immelt, head of CEO [sic].

“When I am talking to GE managers, I talk China, China, China, China, China. [Five Chinas] You need to be there. You need to change the way people talk about it and how they get there. I am a nut on China. Outsourcing from China is going to grow to 5 billion. We are building a tech center in China. Every discussion today has to center on China. The cost basis is extremely attractive. You can take an 18 cubic foot refrigerator, make it in China, land it in the United States, and land it for less than we can make an 18 cubic foot refrigerator ourselves.”

End of quote. Jeffrey Immelt, Chairman, CEO of General Electric, quoted in an investor meeting, on December 6, 2002.

Gee! When GE had, a couple of years ago, some really difficult economic times, they needed $16 billion to bail them out, I didn’t hear Mr. Immelt going to China, China, China, China, China. I didn’t hear that. I heard Mr. Immelt going to the taxpayers of the United States for his welfare check. So I say to Mr. Immelt, and I say to all these CEOs that have been so quick to run to China, that maybe it’s time to start reinvesting in the United States of the America.

No word yet whether Jeff Immelt will be among the CEOs Obama hosts at the White House tomorrow. Though the companies of the CEOs who have been publicly invited–Google, Cisco, IBM, AmEx, Dow, and Pepsi–have been all pushing into China.

On Sunday, Masaccio described this entire CEO summit as just Obama’s effort to outsource the effort the government should, instead, be leading: job creation. I guess Obama has gone to the experts on that front!

36 replies
  1. nomolos says:

    And just one of those corporations in Obama’s circle jerk, Cisco

    roughly half of Cisco’s 70,700 work force and half of the jobs the company has added in recent years are located overseas.

    I shudder to think what total number of jobs the Obama favourites have shipped overseas.

  2. TarheelDem says:

    Obama has gone to the CEOs because that’s his only hope left of getting any improvement in employment. He squandered his one opportunity badly by lowballing it – thanks, Larry Summers.

    About Cisco. Cisco conducts annual evaluations of its employees. And then they fire the lowest 15%. Every year. It has created a culture of workaholics who never see their families, who ask “How high?” when Cisco says “Jump!” Another example of the emerging doctrine of the divine right of infantile managers.

  3. behindthefall says:

    Every item that I have bought recently that was made in China has been flawed, and flawed in a way that looks intentional. Sabotaged, in other words, to my eye. It’s quite a scheme, to flood a country with defective goods, while that country pays for those goods and begs to have its own workers tossed onto the sidewalk.

    Be careful what you wish for, Mr. CEO. Cheap goods are terribly expensive.

  4. readerOfTeaLeaves says:

    I have a lot of ambivalence about this one: until we change the corporate rules and regs in the US, the CEOs are incentivized to talk ‘China, China, China’.

    But Bernie is 100% correct that we US taxpayers are underwriting the outsourcing of our own nation.

    Yet we don’t alter the corporate structures to create incentives that would feed, rather than eviscerate, the Golden Goose that it is the US taxpaying public?!

    Sanders served up the best economic analysis that I’ve yet heard from an American elected official. Hands down.
    More senators need to join in what he’s pointing out, which is ‘the obvious’.

    As for the CEOs… they’ll keep doing what their corporate incentives require them to do, which at this point is to outsource.

  5. TobyWollin says:

    Didn’t Immelt recently say that GE was going to ‘go back to what they know – making stuff’? So I guess we can absolutely count on GE making jobs then…IN CHINA.

  6. MadDog says:

    Pardon the OT – Via Andrew Sullivan, a post by Julian Sanchez:

    Good News and Bad on PATRIOT Reform

    Late last week, Attorney General Eric Holder sent a letter to Senate Judiciary Committee Chair Patrick Leahy (D-VT) in which he agreed to implement an array of policies designed to check abuse of USA PATRIOT Act powers. These include more thorough record keeping and more disclosures to Congress, prompt notification of telecommunications companies when gag orders have expired, and updated retention and dissemination procedures to govern the vast quantities of information obtained using National Security Letters.

    In itself, this is all to the good. But civil libertarians should pause before popping the champagne corks…

    …Despite serious abuses of PATRIOT powers uncovered by the Justice Department’s Office of the Inspector General, no such major changes were made. Instead, Congress opted for a shorter-term renewal that will require another reauthorization this February—in theory allowing for the question of broader reform to be revisited in the coming months.

    Many of the milder reforms proposed during the last reauthorization debate now appear to have been voluntarily adopted by Holder. Unfortunately, this may make it politically easier for legislators to push ahead with a straight reauthorization that avoids locking in those reforms via binding statutory language—and entirely bypasses the vital discussion we should be having about a more comprehensive overhaul…

    • 4cdave says:

      Net Chinese holdings are basically stable. The Fed is monetizing the deficit. The Fed is now the single largest holder of US debt, and is scheduled to hold more than $1 trillion by Solstice.

  7. klynn says:

    Thanks for the clip EW.

    Is there any chance of a movement against this deal? I do not want the payroll tax cut.

    I see this as a ploy to create confusion similar to the pre-Mussolini period and then Mussolini flew in to be the “answer” with the worst of the worst:

    Mussolini was among the founders of Italian Fascism, which included elements of nationalism, corporatism, national syndicalism, expansionism, social progress and anti-communism in combination with censorship of subversives and state propaganda. In the years following his creation of the Fascist ideology, Mussolini influenced, or achieved admiration from, a wide variety of political figures.

    From Hakim, Joy (1995). A History of Us: War, Peace and all that Jazz. New York: Oxford University Press

  8. rmwarnick says:

    It’s not clear yet, as far as I can tell. Does the McConnell-Obama Tax Cuts For The Rich deal allow multi-national corporations to deduct overseas investments for 2011?

  9. 4cdave says:

    You can take an 18 cubic foot refrigerator, make it in China, land it in the United States, and land it for less than we can make an 18 cubic foot refrigerator ourselves.

    And there are four solutions for that:

    * focus your workforce on high-skill, high-return jobs and happily allow the inherently-inferior foreigners to supply the basic manufacturing. Oh, wait, everybody in the US can’t get a PhD in biotech, and there is nothing inherently inferior about the foreigners so they end up taking those jobs too. So this doesn’t work.

    * allow your worker compensation, workplace standards, and environmental standards to fall to the global minimum, so that you can build locally and compete. Oh, wait, then your workers can’t afford to buy the products and you live in a toxic waste dump. So this doesn’t work.

    * raise transportation costs to outweigh the difference in manufacturing costs. This may happen as oil prices climb, and will show up first in things like steel, where there is low labor cost and higher transport cost. It won’t work for things like laptops, which are expensive to manufacture and cost nothing to ship. So this doesn’t work in general.

    * destroy your currency, which acts as a subsidy for exports and a tariff on imports. This doesn’t work if a) your competitor ties his currency to yours and b) your economy depends on massive imports of energy.

    * recognize that access to a market is a privilege, not a right, and that free-trade agreements destroy the ability of most of your population to earn a reasonable living. Quit entering into new free-trade agreements, and weasel yourself out of the ones you stupidly are already in. Set tariffs on imports of manufactured goods, at whatever level necessary to make it cheaper to produce internally. Use the revenue from tariffs to help new businesses to form and existing businesses to expand, with the figure of merit being the total compensation paid to workers with American citizenship.

    • Synoia says:

      Thank you.

      Without tariffs we are in a race to the bottom on labor and environmental laws, all of which were enacted after much pain, illness and death, and found to be necessary.

      But, Obama and the CEOs will be discussing outsourcing both demand and jobs. I’d expect none of the benefits of current tax maneuvers will be realized in the US outside of executive suites.

  10. Mauimom says:

    Gee! When GE had, a couple of years ago, some really difficult economic times, they needed $16 billion to bail them out, I didn’t hear Mr. Immelt going to China, China, China, China, China. I didn’t hear that. I heard Mr. Immelt going to the taxpayers of the United States for his welfare check.

    If the MSM had any scruples at all, they would be quoting this point.

    • sixtysomething says:

      That would be good if anyone was listening. I talked to half a dozen customers yesterday re changing their fica rate tables for 2011… to a woman, not one had any idea this was even being discussed… These are city/county HR mgrs.. in the NE, mid-south and west.

      • Mauimom says:

        I too find it utterly amazing how ignorant most “supposedly smart” people are about this.

        Granted, you have to pay a little attention. Granted, the MSM don’t make it easy, as their “stories” are little more than recycled WH press releases. Granted you have to dig a bit to find facts.

        But c’mon: this is our country, our lives, our children’s lives, and they’re too lazy to inquire???

  11. skepticdog says:

    If we’re relying on Obama, we’re doomed! Last 5 Presidents teach courses in “How To Destroy A Country in Less Than 30 Years”.

  12. JohnLopresti says:

    In addition to @17*s 5 listed alternatives, I would supplement with *get a smaller refrigerator*. Much smaller. Though, market forces soon would discover the evasiveness of Americans* opting for less provender, and begin supplying imported smaller iceboxes.

    One thing likely on GenlElec*s agenda, their history of building electricity generation facilities. I wonder if they are part of the tale unfolding in GA, or some of the other energy taskforce aims which still are pending.

  13. tmstreet says:

    There is a disconnect between the rise of the stock market and the state of the main street economy. The S&P 500 is comprised of firms who can do well and still not hire Americans. In fact, their goal is to hire as few Americans as possible. Especially if they have a global market for their products, then the U.S. economy can be in the tank and the so called American firms can create the impression that American is doing well.

    The natural workings of the market cannot fix this. There is nothing in the foreseeable future that will change this trend until the wages of the American worker has sunk almost to the level of the Chinese worker. Talking to CEOs in the White House is not going to change this and there is no evidence that Obama is going to do anything to change this.

    It might help if any future bailout money was directed to those firms who were required to hire American workers to produce their products. This would not include GM, by the way, who is also increasingly moving their production to China while reducing the wages of American workers. The turnaround is a sham.

    • jdmckay0 says:

      There is a disconnect between the rise of the stock market and the state of the main street economy.

      Indeed… light years.

      And this disconnect, through Bush years… along w/Iraq, was big part of the feel-good cover story masking raping outsourcing US economy as described in Marcy’s post here.

  14. rjrnab says:

    America, where are you now, don’t you care about your sons and daughters?

    Steepen Wolff… Better listen to Bernie!

  15. rmacdonald says:

    Don’t worry every CEO that has outsourced the American economy wears an American Flag on their lapel, to show how patriotic they are.

  16. captjjyossarian says:

    Yeah, Bernie really nailed that one on the head.

    I’m all for sharing technology and know-how but…

    “You can take an 18 cubic foot refrigerator, make it in China, land it in the United States, and land it for less than we can make an 18 cubic foot refrigerator ourselves.”

    is treason.

    If we keep this up, all we’ll be left with is an economy of lawyers, guns and money.

    This topic always brings me back to Andy Grove’s interview w/Bloomberg.

  17. dosido says:

    Yep, this is my #1 Bernie moment as well.

    China! China! China!

    I thought it was weird back in oh, 2006 or so, when TV “experts” were telling me that China is “our friend”. Huh?

  18. dosido says:

    Oh and my favorite twitter comment was words to the effect of

    “Sanders might be a socialist but at least he’s really trying to help people. Go Bernie!”

    • Mauimom says:

      My only faint hope re this — after the complete failure of, and in effect blackout by, the MSM — is that Twitter & YouTube will have references and be able to educate some portion of the electorate.

      I was surprised when I visited HuffPo the other day to see the rising % of stories critical of Obama, and even Arianna was speaking up. Of course when one posts a critical-of-Obama comment, the bots still come out with knives.

  19. painesense says:

    Let’s not let the spineless leaders of Organized Labor off the hook here like the International Longshoremen Union and the Teamsters who unloads these ships from overseas thus undermining jobs in the US. Their failure to even threaten a work stoppage to stop the job hemorrhaging puts them on par with the GE’s of the Corporate World.

  20. mafr says:

    harvard labour life :

    Global Labor Strategies report, Beyond the Great Wall: U.S. Corporations Opposing New Rights for Chinese Workers

    According to the report, US-based global corporations like Wal-Mart, Google, UPS, Microsoft, Nike, AT&T, and Intel, acting through US business organizations like the American Chamber of Commerce in Shanghai and the US-China Business Council, are actively lobbying against the new labor legislation. They are also threatening that foreign corporations will withdraw from China if it is passed.

    China’s Draft Labor Contract Law would provide minimal standards that are commonplace in many other countries, such as enforceable labor contracts, severance pay regulations, and negotiations over workplace policies and procedures. The Chinese government is supporting these reforms in part as a response to rising labor discontent.

    Corporate opposition to the law is designed to maintain the status quo in Chinese labor relations. This includes low wages, extreme poverty, denial of basic rights and minimum standards, lack of health and safety protections, and an absence of any legal contract for many employees.

    • jdmckay0 says:

      U.S. Corporations Opposing New Rights for Chinese Workers

      Of course they are.

      China’s Draft Labor Contract Law would provide minimal standards that are commonplace in many other countries, such as enforceable labor contracts, severance pay regulations, and negotiations over workplace policies and procedures.

      One of most amazing things to me in Bush’s raping of America… whether ME adventure, dismantling of SEC and damn near every other useful FED agency, is the fallacious process by which it happened:

      a) make up lies justifying a certain action, crouched in appealing (“patriot”) terms
      b) hand levers of power to crooks
      c) watch said crooks bleed every last $$
      d) forget/wipe a/b/c clean from history
      e) blame liberals when complete

      Just like Iraq, forgotten in this outsourcing process was congressional debate about setting labor standards back in ’98 or so. It was championed by Pelosi, along w/setting minimal international industrial environmental standards as well: eg. you can’t pump un-processed industrial waste into nearest water supply.

      This effort was shot down, almost in laughing stock fashion, by Delay (as in delay meaningful economic progress)’s K-Street bought & paid for congress under banner of “free market” enterprise and other such covers for fraud. The debate was not really a debate, rather just ridicule of “liberal” obstruction to “economic prosperity”.

      At that time, average Chinese blue collar wage was around $.07 p/hr. Factories were built right on water ways, in districts w/no functioning local government/oversight… bribing local officials, so they could dump their toxic sludge, untreated, into said water supply.

      Huge profit taking from this merchandise sold in US… huge. It is this margin’s takings that constitutes that huge store of cash you read about “US business” sitting on but unwilling to invest.

      And along the way, there was no oversight of product quality… virtually none. Move it out, nice packaging, and flood the retail shelves w/this stuff. No product quality oversight… none. Just take the money and disappear.

      I would also point out that, along the way (eg. Bush years… “ECONOMY IS STRONG” W’ said as late as Nov. ’07), US citizens income was degrading massively. Anyone honestly paying attention (and there were plenty) was well aware, going back to late ’04, that US income was becoming increasingly dilluted: eg. incapable of supporting prices/mortgage pmts in housing market. It’s not rocket science, really just common sense. EG. how can an economy (US) possible support a bubble (or even just rising) housing market when incomes are being degraded at such a vast extent?

      Last part I want to point out… a funny thing happened in China. Even @ 7 cents p/hr, they saved. While we were mortgaging everything to buy all out shit, while forsaking developing what we needed for the future, the Chinese saved. And gradually, slowly, they learned how to do things well… a process over last 15 yrs. or so. But they did learn. And they looked at profits taken from their labor, and thought just what any capitalist/freedom-loving American would think: “why should I take peanuts so “the man” can get rich?”

      So they took their savings, and began to reinvest. They started building their own factories, and learning>>developing technology. Or to quote what’s his name, they began to forge an “ownership society”.

      They insulated their currency against raiders/derivative traders, seeing what had happened elsewhere. They gradually transformed from peasants to experts. And they have passed us by in more cutting edge technology understanding, production and application as though we were standing still.

      This story has not been told here. It was the story Obama could have told… eg. the TRUTH, but he didn’t. Instead, we just elected a doubled down version of K-Street elected on mantras of “freedom” and “reducing debt”, while most of neanderthals following that jingoism have no clue they’re just empower another bubble & rape… kicking the can down the road.

      I’ve been to China quite a bit since early 90’s, spent about 20 mos. on mainland since then. Beginning around millennium, I watched this unfold there. I’ve spend considerable time at several universities, as tech was my biz I wanted/needed to know what they were doing. I’ve watched organic development of cutting edge knowledge across the sciences, the kind’a stuff US used to do.

      Chinese blue collar wage now up around statospheric levels +/- $.70 p/hr… the best they’ve ever had it in modern era. Try convincing American’s that is the “prosperity” our “free marketers” have promised. And yet, utterly amazingly to me, they have saved even more while reinvesting it, largely, quite intelligently & productively.

      They are cleaning up their water in huge ways, w/techonology they’ve developed, while US repubs lament such efforts as “environmental whackos” holding US economy hostage. I dun’o… across the board, it’s same thing: they are moving forward developing what the future needs, we’re borrowing more and developing nothing.

      I admire very much what they’ve done.

      We have, in essence, financed Chinese self-education/industrialization into the modern era, while mortgaging our future. We’ve made a few 100’ths of a per cent of US biz’nss people rich, while they told the rest this was all about “freedom” through their co-opted media and Fed government, and most of our citizenry bought it.

      We have been left behind, w/next to nothing, and our populace still thinks we are the envy of the world.

      Unbelievable really…

  21. mzchief says:

    Yeah, your tax dollar$ at work as parlayed by “the world’s biggest and most leveraged hedge fund” (that lost $8 billion dollar$ today) (the bold is my emphasis):

    The workers were apparently rounded up in the county of Qu in Sichuan Province by a man running what was supposed to be a charitable organisation.

    The Quxian Beggars’ Adoption Agency then sold the workers to a factory making construction materials in the county of Toksun in Xinjiang.

    According to the Global Times, it received 9,000 yuan (£850, $1,350) for each employee. It was also paid 300 yuan a month for each worker.


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