In an April 2 interview with Fareed Zakaria on CNN’s “Global Public Square,” GE CEO Jeff Immelt made the case for looking to Germany for clues to reviving manufacturing in hard-hit areas in the U.S. Midwest. Immelt pointed to Germany’s “great training, great infrastructure…export bank [and] tax policy.”
As the U.S. debates whether trade policy has a role to play in raising the share of manufacturing in the economy, the important contribution of home-grown tools like education, training, fiscal policy, and government investment needs to be at the center of the conversation.
Below is an excerpt from the exchange, and the video can found here. —Peter Rashish
FAREED ZAKARIA GPS
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ZAKARIA: I know you think very broadly about these issues and you’re very close to that world of the steel worker, the auto parts — and you’ve seen the anger and anxiety in, you know, Ohio and Michigan and Pennsylvania. What do you think the answer is?
Is there a way to re-industrialize the Upper Midwest or are these just — you know, that’s a world that’s gone away?
IMMELT: Look, I think there’s a way to create more manufacturing jobs in the country. I don’t know exactly where it is. And the reason why they’re good jobs is, look, if somebody is working for G.E. and they’re making 25, 30 bucks an hour and, let’s say, they lost that job because the markets are terrible or things like that. They don’t go to another job down the street that pays them the same amount. They go to a job that pays $15 an hour. And that’s why people are so angry.
So I stand back, you know, Fareed, and say, let’s look at Germany. Germany has high wages; 24 percent of their labor is manufacturing, 9 percent in the U.S. What do they do? Great training, great infrastructure; they have an export bank; they have a tax policy that encourages it. The banks have to lend money to small business, right?
ZAKARIA: Let me…
IMMELT: So — so…
ZAKARIA: You have a highly intrusive government that both demands certain things of industry and pays for it. I mean, during the recession the German government paid firms to not lay off workers.
IMMELT: Look, I — the reason why I raise the case is that we all want to migrate right away to Mexico and China, when we can look in the mirror and see another country that actually has won, is winning in this regard.
Now, look, we have 5 percent of the people in the world in the U.S., 25 percent of the global economy. We’re not going to sustain that unless we know how to make things here and sell them every place in the world, and that’s where the most valuable manufacturing jobs are created.