Tea-Party Attacks Put GE on Defense

Wall Street Journal ^ | OCTOBER 10, 2011 | KATE LINEBAUGH

[reaganaut1]

General Electric Co., where Ronald Reagan honed his communication skills as a company spokesman, is struggling to fend off attacks from conservatives over its relationship with the Obama administration and ventures in China, raising concerns inside GE that the controversy could damage its brand.

Former Republican Alaska Gov. Sarah Palin last month slammed GE for being "the poster child of corporate welfare and crony capitalism." Presidential candidate Newt Gingrich used GE as an applause line during the Republican debate sponsored by the tea party in September. And Fox News television personality Bill O'Reilly has derided the conglomerate and Chief Executive Jeff Immelt almost weekly.

The company's critics will get another opening this week. Mr. Immelt is to appear with President Barack Obama at a meeting of the president's jobs council in Pittsburgh on Tuesday, the same day that the Republican presidential contenders square off in a debate at Dartmouth College.

The tea party and its allies are taking aim at GE for a number of alleged sins, including the company's paltry 2010 federal tax payment, an aviation joint-venture in China, moving jobs overseas and taking federal stimulus dollars for green-energy projects.

It hasn't helped that Mr. Immelt's position as head of the President's Council on Jobs and Competitiveness, an advisory panel of executives, makes him one of the country's closest executives to Mr. Obama. The White House didn't respond to a request for comment.

"We've had concerns that Immelt uses the government rather than the marketplace to drive GE's philosophy on how to do business," said Wayne T. Brough, chief economist at Freedomworks, a national tea-party group that has protested at GE shareholder meetings. "It feeds into a crony capitalist kind of mentality that isn't actually the best way to generate economic growth."

[USS Alaska]

The following quote is from GE 2009 Annual Report.

Capital Finance earned $2.3 billion in 2009 and should strengthen during 2010. Earnings could experience a significant “bounce back” in 2011. Our credit costs in 2009 –10 are about three times those in the last few years. But it appears that nonearning assets have peaked and losses will be declining substantially over the next year or two. At the same time, margins on new business remain strong.

$2.3 Billion in earnings for GE Capital Finance.