General Electric Co.’s chief executive, Jeff Immelt, shared a laugh last week with President Trump about an old golfing feat of the president’s.
But the pair’s congenial encounter at the White House belies a big difference in how they approach international trade.
While not mentioning Trump by name, the Boston-based CEO delved into the issue in his annual letter to shareholders, released Monday. He pushed back, politely, at the protectionist views espoused by the new administration in Washington and elsewhere.
“There is a strong trend toward nationalism all over the world,” Immelt said. “Governments will execute heavy influence over the economy, with an even stronger focus on local job creation.”
“Our preference is for multilateralism and free trade,” he wrote.
Immelt called GE a “proud American company that is winning in every corner of the world.” He said that in 2000, about 70 percent of its revenue came from the United States. Now, that number is under 40 percent. The vast majority of its aircraft engines and gas turbines, for example, are sold abroad. GE exports more than $20 billion worth of goods a year today.
In the letter, Immelt complained about the fate of this country’s Export-Import Bank, a government agency that helps US manufacturers sell goods overseas. Trump doesn’t support the agency, whose board essentially has been hamstrung because of the lack of a quorum.
Trump also scuttled the Trans-Pacific Partnership, a potential trade deal that would have reduced costs to import goods from certain Asian countries, and he has talked about imposing import taxes to make US manufacturers more competitive.
Immelt said GE is prepared for this new climate because its manufacturing footprint spans so many countries that it can adjust to the changes.
“We don’t need trade deals, because we have a superior global footprint,” Immelt said. “We can export from multiple countries that give us access to their funding. We will adjust to potential changes in tax policy or protectionist tendencies. . . . We see many giving up on globalization; that means more for us.”
Trump and Immelt aren’t divided on all policy issues. Immelt hinted that he’s hopeful taxes and regulations for industrial giants such as GE might be lessened under the new administration and a GOP-led Congress — that Trump’s efforts “will ‘level the playing field’ for US companies.”
Immelt devoted much of the letter to updating shareholders on his big pivot, now six years in, to focus the company on digital industrial efforts. He has divested most of GE’s financial business and completed the acquisition of Alstom’s power turbine business in late 2015.
The shift into digital has meant a focus on software development to create programs that can link industrial machines and make them run more efficiently. It also prompted GE to relocate its headquarters to Boston, a high-tech hotbed, from the Connecticut suburb of Fairfield last year.
Immelt mentioned the Boston move in his letter, explaining the importance of locating the headquarters in an innovation capital.
“In Boston, we see history (GE is 125 years old), academic innovation (GE is a technology company), and a town with a chip on its shoulder (ditto),” Immelt said.
“Some headquarters moves can seem silly; a waste of time and money. Being in Boston allows us to live in a sea of ideas — and see them before others. Boston will make GE hungrier, smarter, and better.”