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Jeff Immelt on Dealing With Trump and Globalization

The GE chief says leaders need to stand back and say, “There are some directions he’s going in that are going to be very good for business.”
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GE CEO Immelt: We Don’t Think Walls Are Good Ideas

Since 2001, Jeff Immelt has shepherded General Electric through market tumult and political upheaval, as well as technological change. The chief executive officer of General Electric spoke with Bloomberg Editor-in-Chief John Micklethwait about Donald Trump’s agenda, the slowdown in globalization, and the digitalization of GE.
Trump has been very vocal about the behavior of American multinationals.
I think President Trump tweeting and calling people out—there’s nothing wrong with that. At the end of the day, each of us in our own way has to navigate our own companies through this world we live in. I just got back from a trip outside the United States, and I would say to our customers, “Look, you have to trust me and GE to be able to be good citizens in the U.S. and still support our business around the world.” We will figure that out. That’s my job.

And the travel ban?
I sent something out to all our employees. We have a lot of people who live outside the U.S., and they’re concerned. We said, “We understand the context, safety. But we think there’s maybe better ways to do it.” We’re not opposed to speaking out on that. Then the president sent out an executive order that said two regulations have to be canceled for every one that’s added. I’m all for that, right? So, too frequently, we’re sticking on all the negatives without standing back and saying, “There are some directions he’s going in that are going to be very good for business.” And we just have to navigate between the two.
Something like 62 percent of your workforce comes from outside the U.S. Don’t bans stand in your way?
From a business standpoint, we’re running the play the president has outlined. We’re a huge exporter. We’re a small importer. And therefore, I think it’s up to me to speak about how important it is that the U.S. has good relationships with our potential customers around the world. We have people on the ground that are Iraqis or Saudis. And they can help us with our local customers, provide that local face. Philosophically, we believe in trade, in the free flow of goods. Inherently, we don’t think things like walls are good ideas. At the same time, I would say that there’s nothing wrong with President Trump wanting to add manufacturing jobs in the United States. The president of China wants to add manufacturing jobs. The president of Mexico wants to add manufacturing jobs.
You have, I think, $1.4 billion in contracts with Iraq. Is that under threat?
That’s well-financed, well-structured. The teams are in place, and we’ve got a very strong local team in Iraq. Most of the products come from the United States. I think those projects will go forward. But again, we prefer a time period where you’ve got good communications, good contacts between our government and governments around the world, while understanding that security is still a challenge. If we want to create jobs in the United States, we need relationships around the world. That’s where businesspeople can communicate with the president to say, “Let’s have more friends.”
On regulation, some say rules and complications actually give an advantage to large companies.
Regulations do punish small business much more than big companies. We can hire as many lawyers as we need to, right? But it can be hard for a small company.
What would you like to see deregulated?
Let me start with taxes. You basically have an economy that is in what I would call an investment recession. Companies aren’t reinvesting in capital expenditures in the U.S. That’s been going on for a long time. Tax reform is one way to encourage the right behavior. Insofar as our tax policy is 30 or 40 years old, if we could get some improvement, it’s going to help GE, but it’s going to help everybody broadly to simplify the code. The ability to repatriate capital from around the world—just be like Germany or the U.K. or Japan. That would be great. That would be amazing. If the president can’t act on tax reform with a Republican Congress, that’s a big miss for where we are right now.
GE may be America’s most global company. Is the talk about tariffs affecting your trade outlook?
We’re a $22 billion exporter from the U.S. And we import $5 billion or $6 billion. We move stuff around the world. You know, there are two times in business when you really feel great. One is when everything’s perfect. Everybody loves each other, everybody gets along. And the other one is when everything’s in chaos, but you’re better than everybody else. We can navigate whatever system is put in front of us. But we would rather have the big trade deals.