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Oct 22, 2004: CEO Forum with Jeffrey Immelt of GE

Jeffrey Immelt, Chairman of the Board and Chief Executive Officer at GE, was the featured speaker at a AmCham’s Oct. 22, 2004, CEO Forum. The following are excerpts from his conversation with fellow CEOs and general directors:

I spend about 25-30 percent of my time outside the United States. The reason for that is, if I look at the next 5 to 10 years, I think growth is going to be slow in the United States for companies. I think you’ve got a consumer that has bought as much as the consumer can buy. Even though I am optimistic in general about the economy, I think we’re looking at a 2-3 percent GDP growth in the United States for a relatively protracted period of time. If you have a company like GE and want to grow, you have to look around the world for growth.

On Globalization

Leaders today have to globalize their companies in a more significant way. GE has half its sales outside the United States. We’re about a $150 billion company. We’ve got about $68 billion in revenue outside the United States and about half our employees live outside the United States. I think most of the growth outside the United States is going to be driven in the next few years in developing countries. If you want to go where the new customers are, you are going to have to go to places like China, India, Russia, the Middle East. You’re going have to go to new places. You need to take on more risks. As a leader of a company, you have to sniff out what the opportunities are. You have to know what you are willing to invest in on behalf of your investors. And not have someone tell you what you are going to invest. You’ve got to make the decisions yourself – to touch and feel what’s going on out there. I’m a big believer that developing countries represent the fuel for growth over the next 5-10 years for companies like GE.

On Russia

The world needs a place like Russia to be part of the global union today. There’s just no way that a country with this many natural resources can be left behind. Globalization. Developing countries. Oil-producing countries are really on our screen. We could do $4-5 billion (of business in Russia) every year. It was $200- 300 million a two or three years ago. I think it is the job of the CEO to look at places where there is a mismatch. In other words, to try to identify places where your resources don’t match the opportunity. I could spend all year in the U.S. or in Western Europe, but our opportunities and resources match in those regions. I try to spend time in China, India, here. When I travel, I sell first. I am a salesperson first. I visit partners and business people second. I go to governments last . I n places like Russia, the government is your client.

I found the people to be engaging. I am optimistic about what we can get done here; not without risks and not without peril. The Russian industrial base is problematic. It’s hard to see how you you’d invest and make money Westernizing it. But, I think from our standpoint, we’re going to have to try a couple of big industrial investments to see if we can help the businesses join the global community. And, that is what we are pretty much prepared to do.

What you’ve got to do is figure out how to grow. You’ve got to wake up every morning and try to think of new products, new regions, new geography, new services. That’s how I spend most of my time figuring out who the customers are and how do you grow. It means being more global and that you’ve got to take a little bit more risks in order to get there and that’s what we do.

I think the investment risk is lessening. We’ve just bought consumer bank. Delta Bank, the fourth largest consumer bank.

You’ve got to come here and see it. Make your own decision on it. It is my responsibility to protect the reputation and manage the risk. You can only do it if you come and see it.