Sunday, July 08, 2007

The Second-Hander As CEO

Steve Milloy looks at why NBC aired the Live Earth concerts this week.

First, the parent company of NBC is the General Electric Company, a corporation that is aggressively lobbying for global warming regulation. GE belongs to a lobbying group called U.S. Climate Action Partnership (USCAP) – a group of regulation- and congressional pork-loving companies that have joined with radical environmentalists to push for mandatory reductions of greenhouse gas emissions and a so-called cap-and-trade system under which companies could buy and sell rights to emit greenhouse gases.

Milloy explains that global warming regulation would be bad for GE's profits. So why do they support such regulation?

...there must be more to GE’s lobbying for global warming regulation than profit. That additional motivation may be the self-promotion of GE’s CEO, Jeff Immelt.

Immelt inherited the CEO job from the legendary Jack Welsh. But while Welsh famously grew GE into a financial colossus, GE has been treading water under Immelt’s leadership. GE’s stock has mostly traded in a relatively narrow range since Immelt took over and has significantly underperformed the broader market.

So, in 2005, Immelt adopted image-building as his key to success – hence the re-branding of regular GE products into trendy “Ecomagination” products. The idea for GE’s Ecomagination marketing strategy came not from engineers who had new product ideas, but from PR consultants hired to burnish GE’s brand. Immelt then became a global warming regulation advocate, one of the first CEOs to do so.

Immelt has been feted by environmentalists and the media ever since, even being honored earlier this year by the World Resources Institute – a gloom-and-doom eco-advocacy organization that GE supports. At WRI’s 25th anniversary dinner in February, Live Earth concert organizer Al Gore personally presented Immelt with the WRI’s “Courage to Lead” award.


Immelt hasn’t been good for GE’s stock price but he’s been quite adept at assuming the pose of a corporate eco-hero. So there is no need to wonder why a GE subsidiary (NBC) is so heavily promoting Live Earth.

It appears that the successor to the great Jack Welsh has not had much success moving up GE's stock. He has had success, however, playing the PR game with our political-media elite. Thus he is willing to lobby for more regulations of his corporation -- regulations that will hurt profits -- because it will make him look good.

It's like something out of Atlas Shrugged. Is Immelt's real name Orren Boyle?


Jennifer Snow said...

It's worse than that: regulations may "hurt" GE, but they also serve the purpose of keeping competitors off the market. That's one of the reasons a lot of big, old, established businesses are in favor of regulations. They can take the hit but their potential competitors can't even get off the ground in that kind of situation.

EdMcGon said...

Jennifer hit the nail on the head.

When you hear liberals promoting more government regulation, take a closer look at their relationship to big business. You may be surprised.