Supply Chain

The GE Way: The Best We Can Do?

Jan. 25, 2011

President Obama’s declaration at General Electric headquarters last week that America is going to once again “build and invent stuff…like Thomas Edison” is a great sound byte.

The President then announced that GE CEO Jeffrey Immelt will now head-up the Administration’s Economic Advisory Board.

Is this the best we can do?

Former CEO Jack Welch- along with Alan Greenspan-were the two figures who could do seemingly no wrong in the 90’s and early 00’s.

Welch took over a company that was an industrial powerhouse, but was spending less on research and development each year.

Welch’s strategy was to continue to reduce R & D and, instead, get into the outsourcing business in a big way. This led GE to outsource large segments of its own business and transformed GE into one of the world’s most sophisticated providers of outsourcing services.

According to Barry Lynn in his book Cornered, General Electric “pioneered much of the back-office-information-processing operations to India, almost single-handily establishing the companies and protocols that now dominate the business.”

Today, less than half of General Electric’s revenues and its employees come from America.

Further, GE was one of the biggest beneficiaries of government bailouts. In addition to the outsourcing strategy, GE became a huge financial firm. When the financial crisis hit in 2008, GE Capital received tens of billions in taxpayer money to wipe out its bad loans and decisions.

Moreover, GE has been one of the largest recipients of federal stimulus dollars to develop new green technologies. The company has received billions more from the U.S. taxpayer.

This is not the General Electric of Thomas Edison – and it hasn’t been for a very long time…

About the Author

Andrew R. Thomas Blog | Associate Professor of Marketing and International Business

Andrew R. Thomas, Ph.D., is associate professor of marketing and international business at the University of Akron; and, a member of the core faculty at the International School of Management in Paris, France.

He is a bestselling business author/editor, whose 23 books include, most recently, American Shale Energy and the Global Economy: Business and Geopolitical Implications of the Fracking Revolution, The Customer Trap: How to Avoid the Biggest Mistake in Business, Global Supply Chain Security, The Final Journey of the Saturn V, and Soft Landing: Airline Industry Strategy, Service and Safety.

His book The Distribution Trap was awarded the Berry-American Marketing Association Prize for the Best Marketing Book of 2010. Another work, Direct Marketing in Action, was a finalist for the same award in 2008.

Andrew is founding editor-in-chief of the Journal of Transportation Security and a regularly featured analyst for media outlets around the world.

He has traveled to and conducted business in 120 countries on all seven continents.