Robert F. Jakubowicz: Immelt is in no position to lecture Sanders


PITTSFIELD >> Last week, General Electric CEO Jeffrey Immelt in a Washington Post op-ed criticized Sen. Bernie Sanders for his comment at a meeting with the New York Daily News editorial board that U.S. corporations like GE are destroying America's "moral fabric." Immelt wrote about his company, that he was "proud of all that we do, and how it all figures into the 'moral fabric' of America," and that Sanders, a Democratic candidate for president, is "missing the point."

I question whether that pride would include what GE did to the "moral fabric" of Pittsfield by closing its major plant here in the 1980s.

Sanders, in addition to singling out GE for avoiding taxes, had commented that over the years these corporations have been shutting down many of their major plants and sending jobs to low-wage countries. All this, according to Sanders, was due to corporate "greed" and "selfishness."

Immelt called this "cheap shots" by Sanders and blasted him by writing that "GE has been in business for 124 years (he failed to mention that this was in part in Pittsfield), and we've never been a big hit with socialists We create jobs, instead of just calling for them in speeches."

GE remains mum

When GE, as a profitable business, began the process of closing its operation in Pittsfield, I was a local official trying to find out what was going on. GE officials furnished little information. This was an extremely critical matter for the city and area because GE was the biggest employer of high-wage workers in the Berkshires and the long-time economic engine of the entire county.

Eventually it was assumed by community officials and residents of the area that this was happening because GE had to do it to stay competitive in what then was the emergence of a new global economy. Based on that general assumption, I had asked the head of the state's economic agency to get in touch with the then CEO of the company, Jack Welch, to change its product lines here and to remain in Pittsfield. Welch's answer, according to that official, was not only no, but that Welch did not want the company to be the center of a local economy the way it was in Pittsfield.

I later was contacted by this newspaper to write a review of a book dealing with the way GE did business. Two individuals, one a former editor of this newspaper, who took credit for singling out Welch as a rising star in the company, and the other a former long-time GE employee, had previously refused to write it.

The book was entitled "At Any Cost; Jack Welch, General Electric, and the Pursuit of Profit" by Thomas O'Boyle. This book was where I found the answer to my question about what was going on at GE. O'Boyle through his research put it all together.

The closing of this GE plant was Welch's idea of a corporate revolution at that time. He was at the cutting edge of a major corporate philosophy which discarded post-WWII corporate paternalism in favor of an employee downsizing chic. Layoffs and plant closings, formerly the last options of corporations in trouble, became first options for corporations in the pursuit of higher profits.

According to O'Boyle, the profit outcome mattered more to Welch than people. This quest to be number one in profits, according to O'Boyle, was a major reason why GE, as one of the Pentagon's 100 largest contractors, became one of the leading corporate cheats doing business with the government.

I later had an opportunity to speak with O'Boyle. I asked him whether he thought GE could have remained in Pittsfield and stayed competitive in the new global economy by transitioning as necessary in new product lines. He said it could have but the profits would not have been high enough for Welch's quest to be number one.

It has been some 25 years since GE left Pittsfield and the city and the county have still not recovered from the huge economic blow by GE. Indeed, it is fair to say that it continues to tear at the "moral fabric" of the city and the area.

Torn 'moral fabric'

The area leads the state in continuous population loss; businesses continue to close; good paying jobs are scarce; property values are low and sliding; illegal drug use and shootings have increased; and local officials continue having difficulty in coping with these holes in the "moral fabric" of the area.

Sanders is right about corporations, insofar as those that are profitable, destroying the "moral fabric" of American communities by closing plants and offices to move elsewhere in the quest of higher profits. GE was not a corporation in financial trouble, when it moved out of Pittsfield. That is the greed Sanders is talking about.

Immelt in his op-ed made the point that corporations "have to deliver for their employees, customers and shareholders every day." But significantly he left out delivering for the economic plight of the communities they have done business in, especially one like Pittsfield, in which GE was the heart of the community.

Robert F. Jakubowicz is a regular contributor to the Eagle.


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