A speech by Jeff Immelt of GE recently enlightened me about what's really happening in American Industry...
Basically Immelt agreed that "de-industrialization" and going to a service economy would be bad for American wages long term...
But he said that the only way to restore manufacturing inside the US was to:
1. Improve education and produce more engineering grads...
2. Solve the health care mess...
But which comes first...the factory or the engieener? China is in a position to employ all of the engineers it produces. In the US a student going into engineering now does so "on spec" that there will still be factories in the US when they graduate...
Legacy companies like autos and GE are burdened with retirement and health care. Even while these same costs have been "socialized" in most of the developed world... Only the US does not have a health care, retirement and industrial policy toward it's citizens.
But why is this?
I've concluded that it is simply GREED IN THE BOARD ROOMS!
Most CEOs know that what they are doing to their companies is bad for the future of the nation and their companies....
But the short term goal in most board rooms is simply to make lots of money as quickly as possible...then get taxes lowered...and get out as soon as possible!
No one really wants to hang around too long and get caught holding the bag...
That's why the American auto companies are so pitiful... They are trapped by union contracts that they can't get rid of...outside of bankruptcy...
They can't join the LOOT AND SCOOT business plan that has been the name of the game on Wall Street for the last twenty years...
SIMPLY PUT CEOs are trapped between a CULTURE OF PERSONAL GREED...and the need to preserve their companies as viable businesses....
SO FAR THE CULTURE OF PERSONAL GREED HAS BEEN WINNING...
