Tuesday, January 31, 2012

GE and Waukesha, Response

I am so glad to post this email response from Jeffery DeMarrais (GE Healthcare)
I believe in the truth, the whole truth, so we should be well informed consumers.
Thank you so much Mr. DeMarrais for taking the time to confirm GE's position.

Despite the relatively short length of GE/x-ray posting that was sent to you it is filled with errors and has been circulated around the internet for nearly 8 months.

First, I’m happy to say that GE is not moving its x-ray business to China as many blogs initially reported; but I can understand your concern.

In July, GE announced that four x-ray executives and the titular headquarters were being transitioned to Beijing in order to fortify our competitive position in China. The GE X-Ray team in Wisconsin, around 150 employees strong, is not leaving Wisconsin and is not being closed down. There was no U.S. job loss directly associated with the move of these four individuals. Bloomberg, the Wall Street Journal and other news outlets covered this story in detail, with a link to the Bloomberg story here, and the original GE press release here. (In fact the move of the 4 executives happened a year ago and there still has been no job loss in our x-ray business)

There are a few reasons why this move is important to future growth and helps secure American jobs. Please consider the role of the four managers that we announced would be based in China. Putting these resources in place – specifically an x-ray product leader, marketing, human resources and finance – we are building a commercial “front end.” These are the people that identify and secure opportunities to sell our products into the $26 billion Chinese health market and compete against the 120 domestic Chinese x-ray manufacturers.

GE is America’s second largest exporter of products. Without these “hunters” understanding what products Chinese hospitals will purchase and seeking sales opportunities, we would be abandoning the foreign exports market to competitors. In addition to the 120 Chinese x-ray manufacturers GE also competes against German conglomerate Siemens, Japan’s Toshiba, Royal Philips Electronics of the Netherlands and many others who maintain a significant commercial presence in China. Samsung of Korea has recently announced its intention to acquire an x-ray manufacturing company to compete with GE; and that they will spend $1.1 billion in the next nine years to build up a medical device division that employed fewer than 10 people in 2009. A recent Wall Street Journal had a two-page story about a new Indian x-ray competitor looking to expand globally.
China is an important export market for our American-manufactured devices; and when our customers require much more basic products GE people figure out what they need and then build it.  Even during local product development, our ability to sell x-ray technology creates and supports U.S. jobs for GE and in our suppliers. X-ray devices sold in China include critical components like x-ray tubes manufactured inWisconsin, software designed and programmed in New York, x-ray tube targets built in Ohio and other components that are made in America; and they also contain components that come from our other existing facilities around the globe. 
Second, I’d like to address the investment discussion. When major U.S.-based, multinational companies like GE expand into new markets and sell to more customers—whether in China or any other large, growing international market—it means more jobs in the U.S., now and in the future. GE is no exception. In fact, on the same day as our x-ray announcement, GE announced that it is building a $56 million manufacturing plant in Mississippi that will create 250 American jobs. You can read more about GE’s commitment to jobs at home while investing abroad here.

GE remains committed to U.S. manufacturing. Over the last 18 months alone, GE has announced plans to create over 8,000 jobs in the U.S… and it will grow to 10,000 jobs created soon. More information here. GE has, in fact, invested $50 billion in US manufacturing plants and equipment over the past decade (so $5 billion per year) and will invest $20 billion in new technologies. More details are here. We’ve also announced a $6 billion health commitment for products that lower costs, increase access and improve the quality of healthcare; and committed $1 billion for new healthcare products to fight cancer. A great resource for all the U.S. investment and job announcements ishttp://www.gereports.com/tag/jobs/.

Separately, GE did announce last November our intention to invest about $2B through 2012 to boost R&D in China and to fund new local joint ventures with Chinese companies in areas such as aviation, wind power, high-speed rail and financial services. As I mentioned earlier, this creates growth opportunities for US-based companies, protecting and growing U.S. jobs. GE’s overall business in China—across all divisions—will support nearly 4,500 American jobs, including those along GE’s U.S. supply chain. 

Finally, regarding taxes: GE is one of the largest taxpayers in the U.S. Our rate last year was low because we lost $32 billion in our financial services business during the financial crisis. Our rate will be higher this year as those businesses recover. We had a 41 percent tax rate in the first two quarters of this year. The Washington PostForbes and other news outlets pointed out that the original New York Times article that made the ‘no taxes’ claim was wrong. You can read more here.

My sincere apologies for the long note but this is a complex set of issues. I hope I was able to clarify any concerns you might have had. Please feel free to share this information with others who have similar concerns.

Thank you again and my very best regards,  


Jeff DeMarrais
GE Healthcare
General Electric Company

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