A major piece from the Wall Street Journal:
The financial crisis hasn't been kind to General Electric Co. Its stock has lost almost half its value, the government has stepped in to prop up its enormous financial arm, and sales have slumped in core industrial businesses.
But Chief Executive Jeffrey Immelt now has his eye on a huge new pool of potential revenue: Uncle Sam's stimulus dollars. Mr. Immelt, a registered Republican, quips about the shift in thinking in the nation's corner offices: "We're all Democrats now."
GE has high hopes for the strategy. It says that over the next three years or so it could bring in as much as $192 billion from projects funded by governments around the globe, such as electric-grid modernization, renewable-energy generation and health-care technology upgrades.
The company is just starting to see a payoff. Last month, for example, President Barack Obama announced $3.4 billion in government-stimulus grants for power-grid projects. About one-third of the recipients are GE customers. GE expects them to use a good chunk of that money to buy its equipment.
The government has taken on a giant role in the U.S. economy over the past year, penetrating further into the private sector than anytime since the 1930s. Some companies are treating the government's growing reach -- and ample purse -- as a giant opportunity, and are tailoring their strategies accordingly. For GE, once a symbol of boom-time capitalism, the changed landscape has left it trawling for government dollars on four continents.
"The government has moved in next door, and it ain't leaving," Mr. Immelt said at the International Economic Forum of the Americas in Montreal in June. "You could fight it if you want, but society wants change. And government is not going away."
A close look at GE's campaign to harvest stimulus money shows Mr. Immelt to be its driving force. The 53-year-old executive supported the presidential campaign of Sen. John McCain, yet scored an invitation onto the President's Economic Recovery Advisory Board, led by former Federal Reserve Chairman Paul Volcker. Inside GE, he pushed his managers hard to devise plans for capturing government money.
As part of that effort, GE has promoted policy proposals such as a government-backed power-grid modernization, and pressed the government to increase the size of stimulus grants for that purpose. It also has helped customers design projects and apply for government money, with the expectation that those customers will then buy GE equipment.
The initiative comes as a sluggish global economy is weighing on GE's core industrial businesses. Pursuing government contracts has become a centerpiece of its strategy around the globe. The company estimates $2 trillion in global infrastructure spending will get under way in coming years. It has announced a flurry of energy deals with foreign governments from Iraq to China.
"I think we will do better than most on the stimulus," Mr. Immelt told analysts in April. He declined to elaborate on the effort for this article.The strategy is not without risks, say two GE executives who have been critical of the plan. Government policy could change. Stimulus projects could roll out more slowly than GE expects and generate less revenue than forecast. GE could fail to win competitions to supply hardware and services to companies and public entities that receive stimulus dollars.
GE isn't in agreement with the Obama administration on some proposals. Its GE Capital financial unit, which contributed nearly half of its earnings in recent years, received government backing for its debt when the credit markets seized up last fall. Now GE is lobbying against proposals that would separate GE Capital or its industrial-loan company from the parent company. More regulation on its finance division seems inevitable. The company also is opposed to health-care proposals that would result in $40 billion in fees on health-care device makers such as GE.
GE, whose businesses range from washing machines and lights bulbs to aircraft engines, wind turbines and nuclear reactors, has long done business with the U.S. government.
Over the years, the company has been associated with Republican politics. President Ronald Reagan, voice of GE ads and host of the GE Theater television show from 1954 to 1962, said the views he encountered at GE helped transform him into a free-market conservative. Former CEO Jack Welch, who handpicked Mr. Immelt to succeed him, was a prominent supporter of several Republican presidential candidates. Nancy Dorn, the current head of GE's government-relations office in Washington, served in the administrations of Mr. Reagan and both Mr. Bushes....MUCH MORE
See also "Political Capitalism" and Mussolini, Corporatism.