On Friday morning, June 26, GE announced that it’s opening an Advanced Manufacturing and Software Technology Center just outside of Detroit that will bring more than 1,100 scientists, technologists and engineers to the hard-hit Michigan industrial sector. In a speech for The Detroit Economic Club later that day at The Townsend Hotel in Birmingham, Mich., GE chairman and CEO Jeff Immelt puts the news in a larger economic context. Entitled “An American Renewal,” the speech focused on the need for U.S. businesses to aggressively invest in R&D and export-driven manufacturing if the country is to successfully emerge from a “reset” economy.
A replay of the Webcast will be available later today.
Below are excerpts from the written copy of Jeff’s speech that was prepared for delivery and distributed prior to his presentation.
Jeff began by describing GE’s decision to locate its new R&D facility in Michigan as part of a partnership to create the next wave of economic progress.
“The engineers in our Van Buren Township facility will be developing technologies that can change peoples’ lives — clean energy, better transportation, affordable healthcare,” Jeff said in a printed copy of the speech. “Workers who might have made cars in the past, will be bringing GE technology to life rebuilding our economy. The people of this great state have been told that the decline of their manufacturing base was inevitable. I reject that pessimistic view. I believe that good jobs can again return to Michigan and in manufacturing centers across America.”
Jeff says that the kind of decision made with Michigan is one that will need to be repeated across other industries in the current economic environment if the U.S. is to pull itself out of the recession and emerge stronger.
“Change can come, but it requires a new way of thinking,” he said. “It requires a clear and determined plan of action. It requires a stiff dose of candor about the troubles we face, many of which we brought on ourselves. It requires leaders throughout the economy to take command of events. The world has been reset. Now we must lead an aggressive American renewal to win in the future.”
Of critical importance, he said, is the need to focus on technology and manufacturing. “Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a services-led, consumption-based economy — and somehow still expect to prosper,” Jeff said. “That idea was flat wrong.”
“Recently my colleague Peter Loescher, the CEO of Siemens, extolled the importance of Germany as an exporting country. In my career, I have never heard an American CEO say that the United States should be leading in exports. Well, I am saying it today: This country ought to be, and we can be, not just the world’s leading market but a leading exporter as well. GE plans to lead this effort. We have restructured during the downturn, adjusting to the market realities. At the same time, we are increasing our investments. We plan to launch more new products during this downturn than at any time in our history. We will sell these products in every corner of the world. We are creating a better company coming out of this reset. Similarly, America needs a dramatic industrial renewal. We have to move forward on five fronts.”
First: Increase investment in research and development. “GE has never forgotten the importance of R&D,” he said. “Each year, we put six percent of our industrial revenue back into technology — so much that more than half of the products we sell today didn’t even exist a decade ago. As a consequence, we are a huge exporter… GE’s R&D budget has not been cut. And that’s a course of action I’d recommend to every company that wants to get through the economic crisis even stronger than before.”
Second: America should get busy addressing the two biggest global challenges — clean energy and affordable health care. “There is no question whether there will be breakthroughs in these areas — just by who and when,” he said. “The leader in these fields will dominate the global economy in the decades that come.”
Third: We must make a serious commitment to manufacturing and exports. “This is a national imperative,” he said. “We all know that the American consumer cannot lead our recovery. This economy must be driven by business investment and exports… America has to get back in that game … and it starts with a strong core of innovation.”
Fourth: We should welcome the government as a catalyst for leadership and change. “There’s a long history in this country of government spending that prepares the way for new industries that thrive for generations,” Jeff said. “Think of the NIH or NASA, and all the new innovations that came out of these programs — from computing to communications to healthcare. America has that kind of chance with unprecedented levels of new government investment. ... The key is making sure those hundreds of billions of dollars fall on the fertile ground of innovation, and not bureaucracy.”
Fifth: It is possible for a global business leader to also be a good citizen. “We must partner in our communities,” Jeff said. “Big business should work with smaller companies in our supply chain to help them compete globally. And we should partner with local governments to fix our education system. In the end, business leaders are accountable for the competitiveness of their own country. We must say so publicly. This will not hurt our ability to globalize. Rather, I think it will make other countries admire our business leaders more. We must end the impression that American CEOs are short-term speculators. ”
In closing, Jeff told the audience: “From economic chaos we will create new opportunities for the people of this city and this country. We will once again be prosperous, but more importantly, we will be proud. … It is time to think big again. And time to make things again that work and last.”