Monday, January 24, 2011

GE's Immelt Gets A Political Sop for His Support

Friday was a big day for GE's hapless CEO, Jeff Immelt.

All his political ass-kissing and support for the administration's uneconomic green, alternative energy initiatives paid off in his being named as head of a new jobs & competitiveness council.

Funny, isn't it, how a guy who ran his company so badly that it had to be rescued by the Fed's cheap funding, with no questions asked, is rewarded with a job telling others how to do what he couldn't, i.e., compete effectively?

Because Immelt would have run GE out of business, but for a generous federal government. It's difficult to figure out just what he's supposed to know about competition that he could teach anyone else.

Wouldn't it have made more sense, provided more inspiration, for the administration to have selected the CEO of a firm that didn't have to be bailed out in order to avoid bankruptcy?

Take a look at the nearby price chart of GE and the S&P500 Index. From late 2001, when Immelt took the helm of GE, until now, the company's relative price to the index has fallen precipitously. Even Friday's earnings announcement and price rise couldn't save nearly a decade of mediocre misleadership by Immelt. At GE's recent 2009 lows, Immelt had destroyed cumulative value stretching back 13 years, to 1996. That takes talent!

Meanwhile, with NBC/Universal being taken over, for managerial purposes, next week, Immelt was treated to one last softball interview on his company's CNBC network this afternoon. What will happen when Immelt doesn't have the power to hire and fire in order to command such creampuff scenes?

2 comments:

gus said...

..."From late 1991, when Immelt took the helm of GE"

Is that a typo?

C Neul said...

Yes, it was. Thanks. Which also makes his subsequent performance relative to the S&P much, much worse.

-CN