GE, Immelt, Iran, Bill O'Reilly's Fox News Story- and Me!

I had an interesting evening yesterday. Thanks to this blog, and my dozen or so posts on the mediocrity of GE's total return performance under its overcompensated CEO Jeff Immelt's 'leadership,' Fox News' program The O'Reilly Factor invited me to be a guest/analyst on this topic on last night's episode of the show.

O'Reilly led with allegations of GE's continuing fulfillment of contracts to do work with various entities in Iran, at a time when the US military has identified IEDs and other support for Iraqi terrorists who are causing US casualties as coming from Iran.

If this were all O'Reilly could say, it would be newsworthy, but perhaps not compelling on its own.

However, from reading my blog, one of the program's producers, and O'Reilly, further realized that Immelt has continued GE's involvement in Iranian projects while shareholders have lost money, due to GE's dismal total return performance. Meanwhile, as I noted in yesterday's post, and prior, linked posts, Immelt has been wildly overpaid for destroying so many hundreds of millions of dollars of GE shareholder value since he took over the CEO spot from Jack Welch in September, 2001.

O'Reilly ended his prepared comments on the 'Talking Points' segment about GE with rather strident language, saying,

"There are more than a few villain CEO's in this country, but Jeffrey Immelt could be the worst."

Given the available time and context of a news show like Bill O'Reilly's, one cannot always make all the points one would like to have expressed.

For example, in answer to O'Reilly's questions concerning why Immelt is able to remain as CEO of GE, despite poor total return performance and the alleged Iranian business dealings, I posited that it is, in part, due to GE's brand's homey, wholesome image for most American consumers, as well as the fear that many media and financial institutions have of GE's enormous spending power for corporate services such as: advertising, investment banking, stock trading, pension fund management, to name a few.

What I didn't have the time, or context, to add, were these points.

-GE, as a diversified conglomerate, is an anachronism. In today's equity markets, positions can be bought and sold for negligible transactions costs, making corporate diversification irrelevant and unnecessary. Gone are the days of LTV, Litton, Textron and Gulf & Western, whose diversification obviated retail investors to pay a 14% round trip brokerage commission to trade equities.

-It's very hard, in America, for companies to die or be killed off. CEO's don't typically fire themselves, and boards are reluctant to terminate the life of the company on the board of which they serve. There are millions of shareholders, but only a few board members, and one CEO, so there is little in the way of countervailing shareholder power to that wielded by the board and CEO of GE.

-GE, if split up, would no longer taint all of its business units with the performance and possible terrorists-related business practices of just a few of its units.

In any case, with a segment like last night's on The O'Reilly Factor, I was certain that someone from GE would begin to investigate who I am and what is on my blog.

I didn't have long to wait.

Thanks to my sitemeter javascript, this visit was logged at around 9:30AM this morning:

Domain Name (Unknown)
IP Address (omitted to protect privacy).# (GENERAL ELECTRIC COMPANY)
ISP AT&T WorldNet Services
Location Continent : North America
Country : United States (Facts)
State : Connecticut
City : Fairfield
Time of Visit Apr 15 2008 9:29:29 am
Last Page View Apr 15 2008 9:50:11 am
Visit Length 20 minutes 42 seconds
Page Views 8
Referring URL http://www.google.co...search associates%22
Search Engine google.com
Search Words "performance research associates"
Visit Entry Page http://pra-blog.blogspot.com/

Yes, someone from GE's corporate headquarters, located in Fairfield, Connecticut, spent about twenty minutes reading my blog. Probably beginning with yesterday's second post, and continuing back through several of my GE-related posts.

I know they were motivated by viewing the O'Reilly program, because the Google search term, 'performance research associates,' is the name of my LLC, as provided onscreen during my appearance on last night's Fox program.

What's next? I don't know. But I discussed with various friends and family members last night if, and how, GE might respond.

Since nothing presented on O'Reilly's program was false, there is no basis for defamation, slander or libel charges by GE or Immelt against anyone. The question becomes one of what, if anything, Immelt can reasonably do to respond to a set of highly embarrassing facts about him and the company he heads, GE, which aired on the most-viewed cable news show in America.

My business partner, one of whose other businesses involved distribution of information to media companies, marveled at how the conventional, old world of journalism has been turned upside down.

By writing frequently and factually about business topics on this blog, I was discovered by Fox News personnel and invited to provide analytic commentary about a major US corporation's faltering performance and overcompensated CEO. In today's online world, my blog, devoid of a dependency on advertising, owing no large company anything, is free to be objective and candid in my characterization of the performance of various corporations and CEOs.

No simple phone call to the head of Disney, CBS, or even Rupert Murdoch would affect this, or any other blog reporting on GE's dismal performance under Immelt.

But, back to the question, what will GE, and Jeff Immelt, do about last night's O'Reilly program?

Well, I doubt Immelt will resign or give back any of his past compensation. I don't think the board will announce that it is splitting up GE by week's end. And Immelt can't change history and make the total return for GE shareholders magically become better ex poste.

But what Immelt can do, and, I think, his predecessor, Jack Welch, would have done immediately upon being made aware of the Iranian contracts, is to summarily and instantly have all Iranian-related GE commerce halted. Period. Pay whatever contract penalties are required, and sustain whatever lawsuits may come, but shed the ongoing perception and liability of having to admit that GE is doing anything in Iran.

GE would still be left with its performance and structural mess, and Immelt's inept management thereof. But at least they'd be out of the crossfire over a sensitive issue like selling products to Iran in a Presidential election year during which American troops are deployed in Iraq and taking casualties from Iranian-supported efforts.