GE & Obama

[Erik Sine]

GE Couldn't get their Cap & Trade, so they have to find another way to get their company specified in to government contracts

Obama Brings Good Things to Light at G.E.

“Jeff Immelt’s experience at G.E. and his understanding of the vital role the private sector plays in creating jobs and making America competitive makes him up to the challenge of leading this new council.”

-- Statement from President Obama announcing that G.E. CEO Jeff Immelt will lead the new President’s Council on Jobs and Competitiveness.

When Democrats said President Obama was “pro-business,” we didn’t know they meant one business in particular.

There are a few companies on the Obama corporate A List – Democratic patrons Google and Goldman Sachs both turn up again and again at White House functions and for special recognition – but no company seems to get the VIP treatment that General Electric receives.

Obama will announce today on a visit to a G.E. plant in Schenectady, N.Y. that G.E. CEO Jeffrey Immelt will lead his new Council on Jobs and Competitiveness. The panel replaces the President’s Economic Recovery Advisory Board led by former Federal Reserve Chairman Paul Volker.

Volker, who helped President Ronald Reagan whip inflation and launch two decades of growth, will be replaced by Immelt, who has often spoken of his desire to put G.E. on the inside track for government subsidies and incentives in the Obama era.

Whether it is pushing the president’s plan for global warming fees in order to create demand for his “Ecomagination” line of windmills, solar panels, etc., boosting the president’s national health-care law as part of an effort to sell more medical equipment, or enthusing over the Obama strategy of making loans available for industrial exporters, Immelt has been an Obama stalwart all along. Immelt has also consistently argued to shareholders that there is big money to be made in advancing the Democratic agenda.

While most corporate leaders have taken a wait and see approach to Obama’s occasional overtures to the private sector, G.E., along with Google, Goldman and few others, have backed him to the hilt.

It is unclear how the administration plans to deal with the ethics challenges created by having a CEO whose income is determined by stock performance leading a panel designed to recommend government policies. G.E. (2009 revenue: $157 billion) is a huge government contractor and is always in the market for new subsidies and incentives.

Immelt’s shareholders certainly had to think that access had its benefits this week when the Obama administration signed off on a plan to allow the company to spin off under-performing NBC to cable giant Comcast.

Though intended to show Obama’s coolness with corporate America, the Immelt pick will likely reinforce the perception in American boardrooms that Obama likes to play favorites when it comes to the economy.

He’s visited so many battery makers that his staff must now be coated in a thin layer of nickel-cadmium. And while Obama plays rough with the oil and coal industries, he can’t say enough good about technology firms and “green jobs.”

And while Volker was said to have always been locked out of the Obama inner circle, Immelt should have the president’s ear. Immelt’s campaign donations and constant boosterism of the Obama agenda should provide a solid foundation for becoming a close adviser to the president, or perhaps just making that advisory role official.

The suspicious eye that will be cast on Immelt, though, may lessen his ability to provide the connection to the business world Obama has promised. Other CEOs are unlikely to see a competitor who pushes policies explicitly to benefit his company as an ally in the fight for a fair, free market.