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Schultz and Immelt Take Different Approaches to America's Economic Woes

Posted by Dale Buss on October 19, 2011 10:02 AM

Nature abhors a vacuum, and so does a rudderless economy. So it's quite natural that corporate chieftains increasingly are promoting their own prescriptions for righting the U.S. economy when the politicians can't figure out how to address the country's 9-percent-plus unemployment, shaky consumer confidence, wildly gyrating equity markets, moribund housing values and government deficits as far as the eye (and the eyes of everyone's grandchildren) can see. If government can't create the conditions necessary for business success, then business itself must try to do more.

Fortunately, as the Occupy Wall Street protests spread erratically around the nation and the world, some CEOs still have the courage to offer these prescriptions. Howard Schultz and Jeffrey Immelt come to mind, as the chiefs of Starbucks and General Electric, respectively, weigh in on the economic crisis in America.

Schultz, however, wouldn't call it that. "The country," he said recently, "is not in a crisis. This is an emergency." And while Schultz does have some dubious deficits in credentials —Starbucks underwent a huge contraction lately, eliminating many jobs, and the No Labels organizers have been sidling up to him — he speaks sensibly about self-starting jobs growth rather than waiting around for politicians to figure out what to do, or how to better get out of the way.

Starting November 1, for example, Starbucks will collect donations of $5 or more from customers to fund a new Create Jobs for USA program, which will provide loans to small businesses and community groups around the country. Starbucks is kickstarting the effort with a $5 million donation, and hiring 200 people a day to remodel its existing stores and staff new ones.

A side benefit of all of this for Starbucks is that, if very recent though tiny new signs of life in the economy finally broaden into robust recovery, the brand will be in a great position to take advantage of the upswing.

Immelt's prescription is more difficult to appreciate. General Electric has shed thousands of jobs over the last few years and paid little in taxes, though the company pleads that much of this stems from extenuating circumstances of various sorts. But Immelt sits very visibly as head of President Obama's commission of CEOs charged with figuring out how to generate jobs, so presumably he's an authority on creating jobs in some shape or form.

Despite his prime perch, Immelt seems capable mainly of only describing and re-describing the nation's economic problems and then cheering everyone else on as they atttempt to do something about it. Immelt on Monday said, for example, that "it's natural to assume people are going to be angry" about joblessness and that U.S. businesspeople and politicians should "try harder" to create jobs. He also believes that Americans should be empathetic to Occupy Wall Street, in part because rising executive compensation had been "part of the problem that is creating this mood."

Schultz hasn't hesitated to use his iconic brand as a platform to promote actual job growth and even to set up new programs, minor though they may be, to promote that goal; notwithstanding ideology and other entanglements that bias his approach, that's an admirable thing.

Immelt is leveraging Obama's jobs council's "strategy for growth" as a means to generate "millions of jobs," as outlined in the council's just-released report. And Immelt can't seem to talk the president out of promoting a half-trillion-dollar "jobs bill" that, many economists say, won't solve the employment crisis — and may not have a chance of passage anyway.

Update: GE spokesman Andrew Williams reached out to us to point out what GE, under Immelt, has done for the US economy:

"Since 2009, GE has announced the creation of 10,000 new US jobs, 9,000 of which are industrial jobs. In total, GE will hire about 15,000 people in the U.S. in 2011 for these and other job additions, plus normal attrition backfill. However, the sale of NBC-Universal to  Comcast in early 2011 will result in GE’s U.S. employment for 2011 appearing relatively flat versus 2010."

Williams also notes that GE just "announced its 16th factory that it is building in the United States since 2009. Also, GE is the second largest exporter in the United  States. And while non-US revenue has climbed from 35% of GE’s total in 2001 to a projected around 60% by the end of 2011, more than 50% of the company’s industrial workforce remains in the U.S., supported by a 3-fold increase in exports over the decade."

[Image by Jim Kiernan via Flickr]

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