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GENERAL ELECTRIC GENERAL ELECTRIC (GE) HAS, for more than thirty years, cultivated a benign public image, starting in 1954 with the hiring of Ronald Reagan to host its television series, the GE Theater. The then-floundering actor preached the virtues of private enterprise, and warned Americans of the "slow invisible tide of socialism ... engulfing America, held back only by a few brave businessmen." It was during this time that Reagan went from being an "adversary of big business to one of its most ardent spokesmen," says Reagan biographer Lou Cannon. Success has meant that the consuming public has come to accept at face value GE's motto that it "brings good things to life." Indeed, to many consumers, GE products have come to represent the hallmark of excellence. And in the business world it is looked upon as a leader. But the traditional image, and operations, of this international corporate giant are being challenged. GE's reputation has come under attack by citizens opposed to its heavy involvement in the production of nuclear weapons, and its cozy relationship with the Pentagon. This Fairfield, Connecticut-based firm is also confronting its U.S. workforce, which is opposed to the outsourcing of its jobs to the Third World. And it has come under attack during the Reagan years from environmental critics and those opposed to its purchase of RCA, which owns NBC. Pledging to "bring GE to light," the Boston-based INFACT group has set out to expose this transnational's insatiable appetite for Pentagon dollars and its insensitivity to human needs at home and abroad. INFACT, best known for its highly successful international boycott of Nestle, launched the GE boycott. INFACT's Nuclear Weaponmakers Campaign is aimed at alerting the public to the "influential but largely hidden role of the nuclear weapons industry in the arms build-up." GE is ranked as one of the top ten military contractors in the U.S. It is the largest consumer products corporation involved in military production for the Pentagon, both in conventional and nuclear arms, and is a leader in the production and worldwide sales of nuclear power plants. The extraordinary power and influence that this corporate giant wields is highlighted in a new INFACT report. Titled General Electric: Shaping Nuclear Weapons Policies for Profits, it states that "The company's prominent standing among U.S. transnational corporations, its leadership in the military- industrial complex and its long history of political influence all combine to ensure that GE can shape govemment decisions and policies especially national security issues--to the company's financial advantage." INFACT warns that the "need to expose-- and change--GE's powerful influence is urgent" because "the power of the weapons corporations represents an unprecedented threat to democracy." The Reagan administration has overseen the largest peace-time military build-up in history, leaving GE millions of dollars richer. According to INFACT's report, GE's nuclear weapons prime contract awards increased threefold during the Reagan years-- from $2.2 billion in 1980 to $6.8 billion in 1986. GE's 1988 annual report cites aerospace as one of the big growth areas in its operations. Much of its income in this field derives from government contracts. The report notes that GE revenues for aerospace operations were 22 percent higher in 1987 over 1986, increasing from $4.3 billion to $5.2 billion. "GE Aerospace ... holds a number one or number two position in two- thirds of its 35 different product lines," the annual report says. It notes that RCA Aerospace and Defense, which has been merged with GE's own Aerospace division, "is a leader in radar, satellites and surface ship sonar [and] is the developer of the Aegis fleet air defense system for the U.S. Navy." The Navy also selected GE in 1987 to design and develop combat systems for the Seawolf submarine. Reagan's "Star Wars" plan has become a new source of Pentagon largesse bolstering this growth. President Reagan's revival of the B-1 bomber program in 1981 has also helped. In 1971, Senator William Proxmire, D-Wisc., called the B-1 a "joke ... a public works project for the aerospace industry rather than a needed weapon for the defense of the United States." A year earlier, however, the Department of Defense began awarding the contracts, and GE received its share of Pentagon profligacy. And, today, with the Reagan revival of the project, the B-1 represents one of GE's most lucrative contracts, in spite of the fact that the bomber has long been discredited as a viable or necessary weapon. GE's links to the Reagan administration go beyond the chief executive. Reagan's estate trustee and long-time friend, former Attorney General William French Smith, currently sits on the GE board. And the man Reagan relied heavily on for his evaluation of the B-1 bomber program and eventual revival, Air Force General David C. Jones, at that time Chair of the Joint Chiefs of Staff, went on to become a GE board member in 1986. Jones is also a member of the Star Wars Advisory Panel. GE denies that it exercises undue influence over military decision-making. "The fact of the matter is GE doesn't have any responsibility for U.S. defense or foreign policy," says Ford Slater, a company spokesman. Far from warmongering, the weapons maker supports nuclear disarmament, provided it is "bilateral and verifiable," Slater adds. "We are not ashamed of being defense contractors." Under its new Chief Executive Officer, Jack Welch, GE has been overhauling its operations--a move that has generated controversy in the business world and anger among GE workers. A December 14, 1987 Business Week cover story said, "Welch has moved GE out of old standby businesses such as housewares and televisions, and into broadcasting, investment banking, high- tech manufacturing and other riskier, more profitable ventures. He is overhauling GE's culture and structure, even as the company swallows such far-flung acquisitions as RCA Corp. and Kidder, Peabody & Co. The object: to prod the country's largest diversified corporation, with some $40 billion in sales, into acting like a growth machine." GE's workforce is worried, and for good reason. Welch has determined that GE should be the "most competitive business enterprise in the world." It already ranks number one or two in virtually every field it has entered, and Welch wants to keep it that way. Welch has reportedly been nicknamed "Neutron Jack," because his unilaterally decreed, large staff cuts leave the buildings standing, but eliminate the employees. He has even created resentment among his white collar workforce, according to Business Week. As GE's operating profits swelled in the last five years, its total workforce in the U.S. was cut by over 100,000, with more layoffs and plant shutdowns to come. GE has a "decidedly consistent policy to drive down labor costs worldwide," according to Peter Gilmore, director of public relations for the United Electrical, Radio and Machine Workers of America (UE), a union representing many of GE's U.S. workers. In addition to transferring jobs to Third World plants owned by the parent company, Gilmore says GE has been cited by Singapore union officials for shifting production from Singapore to Malaysia. There is evidence of "state, regional and international-level whipsawing" by GE, he says. Whipsawing refers to the attempt to play one workforce off against another, or others, in order to force greater concessions. Not only is GE shifting production from the U.S. to the Third World, it is also exploiting wage differentials in the Third World itself. "There has been a tremendous reduction in the U.S. workforce in the last couple of years," says Gilmore, "especially since Welch took over in 1982." The work currently being done at GE's Juarez maquilladora plant in Mexico, he says, used to be done at the Decatur, Indiana plant. Gilmore adds that the Decatur workforce has a reputation for high productivity, flexibility and capability to implement prototypes. But this will not stop the Mexican "off-shore twin," he says, from getting more work next year when Decatur is slated to close completely. Workers in Juarez, most of whom are women, earn less than a dollar an hour. The parent company is also shifting some of the Decatur production to its Fort Wayne, Indiana, facilities. The Decatur plant produces electrical motors for industrial and consumer products. While Welch has found few friends among labor, he does have plenty of support from GE stockholders. GE last year took in $40.5 billion in revenue from its worldwide operations, up $11.6 billion from 1986. "This 40 percent increase in revenue," read a March 1988 statement from the UE-GE Conference Board on the union contract negotiations, "was translated into a 28 percent increase in after-tax profits in the same time period." GE operates 108 manufacturing plants, about half of all its production facilities, in 22 foreign nations. From these foreign subsidiaries its operating profits increased by 66.6 percent between 1985 and 1987. This rate was seven times greater than the increase in total operating profits, according to a report by UE. These foreign earnings grew out of a 60 percent increase in the company's foreign assets between 1985 and 1987. GE's growing foreign operations are therefore a major factor in its continued success. In April, 1988, the International Metalworkers' Federation World Conference on GE, held in Washington, D.C., attracted over 150 delegates and leaders of world electrical and electronics unions from 20 countries to plan negotiations. A conference resolution stated that "in common with many other multinationals," GE "pursues a global strategy aimed at market domination, technological superiority and high returns for a limited minority." Meanwhile, "workers and the social interests get a very low priority. Like pawns they are sacrificed to economic expediency in the competitive struggle to reduce living standards ...". The conference participants agreed to "monitor and oppose the transfer and the relocation of work with the intention of exploiting working people and setting us one against the other," and to give "full support and solidarity" to North American unions in the pending negotiations with the GE parent. Commenting on the union contract negotiations, Brian Bunch, a GE spokesman, said "We have had a long and good relationship with our unions, and past bargaining has been a constructive process." As far as the demand to stop plant closings, Bunch says GE has a plant closing notification clause in its union contracts that is tougher than the one President Reagan recently vetoed. UE sees U.S. transnationals, like GE, as the largest contributor to the trade deficit and has argued that violations of labor rights abroad, especially in countries receiving U.S. military and economic aid, should be treated as unfair trade practices. "No corporation in a country that depresses wages by systematically violating labor rights should enjoy U.S. trading privileges," says UE spokesman Gilmore. "Restructuring may have made GE number one," reads a March 25, 1988, statement of the UE-GE conference board on the contract negotiations, "but it has also resulted in a 16 percent decline in the work force between 1986-1987 and a 25 percent decline since 1981." The statement goes on, 'Thousands of GE workers have been victimized by plant closings and product line movements, often to foreign countries. Remaining GE workers have been subjected to an orgy of job-cutting by means of subcontracting, automation, job combinations and speedup." Meanwhile, hourly wages have risen by about one dollar, barely enough to compensate for inflation. Jack Welch, however, received a 21.8 percent raise in his cash compensation between 1986 and 1987, says the union. The company's CEO currently earns more than $2 million a year in cash and has enjoyed a 385 percent increase in the net realized value of his GE stock. Initially set up and directed by the Morgan financial interests in the late 19th century, the company's stock ownership has become more diverse over its corporate life. But J.P. Morgan & Co. is still ranked among the top five shareholders. The chairman of the Board of J.P. Morgan & Co., Lewis T. Preston, has been a director on GE's board since 1976. Of the top 20 holders of stock, eight are banks, including Chase Manhattan, Citicorp and Manufacturers Hanover. The DuPonts, Rockefellers and Rothschilds, as well as the Mellon family through its Mellon National Corp., also hold large blocks of GE stock. GE board members participate in the elite Business Roundtable, and serve as trustees of the Ford and Mellon Foundations. And Lewis, along with Welch, is a director of the Council on Foreign Relations, based in New York. Dr. Frank H.T. Rhodes, the President of Cornell University, is also on the GE board. GE spent $8.2 billion on acquisitions in the last seven years, with little interference from federal regulators. The RCA takeover is the largest non-merger takeover in U.S. corporate history. Because of obvious conflict of interest implications, this move has drawn criticism from those opposed to further corporate control of the media. (See MM, September, 1987, "The Media Brokers.") There is an interesting historical footnote to GE's recent acquisition of RCA. GE and Westinghouse together (holding 60 and 40 percent of the stock respectively) put the Radio Corporation of America together after World War I. In 1930, following U.S. government anti-trust action, GE was forced to sell its share of RCA holdings. This was no isolated incident of monopoly behavior at GE, however. Between 1911 and 1967, GE was named as a defendant in 65 antitrust actions. But despite this past, the recent re-merger of the two firms has not been targeted for anti-trust action. And concern among critics that this deal will further consolidate corporate control over the "Free Press" has fallen on deaf ears in Washington. GE's potential to control the flow of information at NBC is alluded to in a shareholder proposal made by the right-wing media advocacy group Accuracy in Media, in 1986 at a GE stockholders meeting. The proposal states that "NBC needs an ombudsman who will be sensitive to the need for accurate reporting and the importance of filtering out the propaganda of freedom's enemies." Of course, for AIM, "freedom's enemies" could include those critical of corporate culture. GE's board of directors recommended a vote against such "filtering." But that does not mean GE will remain aloof from NBC programming. While AIM sees NBC as not gung-ho enough in support of Reaganism, another media watchdog group, Fairness and Accuracy in Reporting (FAIR), sees it differently. The group reports that NBC in March,1987, broadcast a one-hour documentary, "Nuclear Power in France, It Works." Noting that GE has extensive investments in nuclear power, the group argues that TV networks "should disclose their financial ties when they produce documentaries that could affect the profits of their corporate parent." FAIR also adds in its January/February, 1988, report that one month after the documentary was aired, there were accidents at two French nuclear facilities that resulted in injuries to seven workers, and NBC did not report the story. "GE has a long history of embarrassing corporate criminal episodes ... going back to World War I [and extending] to the present," says Dr. Ben Bagdikian, Dean of the Berkeley (Cal.) School of Journalism and a leading critic of corporate influence in the media. "That raises the question of whether GE's work . .. to prevent reporting [on the company] or to put such reporting in a more favorable light would extend to the media they own." Bagdikian points to GE's attempt to compel employees to contribute to a political action committee as an indication of GE's involvement in RCA operations. GE "made it plain that those employees who did not contribute would be considered disloyal to the corporation," Bagdikian says. That the effort was originally directed at the RCA News Division, Bagdikian notes, is "a sign that GE is not terribly sensitive to the separation of its corporate goals from the goals of NBC." Nor has GE been "terribly sensitive" to its consuming public and its employees. As early as 1959 the company and its executives were convicted in a massive price-fixing scandal in which GE, along with Westinghouse, Allis-Chalmers and ITE divvied up the electronic equipment market based on each company's existing market share. Executives would develop elaborate plans to secretly meet and exchange information on bids--with the result that the firms were frequently submitting supposedly sealed bids for contracts in the exact amount as the others, down to the last dollar. For example, the Tennessee Valley Authority (TVA) requested bids on an order for 4,200 insulators in the late 1950s. Eight companies responded, including GE; all of the bids were precisely $12,936. Upon conviction, GE was fined $437,500, and two of its executives were sentenced to 30 days in jail and fined a total of $16,500. In 1974, the company was charged with widespread illegal discrimination against women and minorities in its hiring policies. GE agreed to a $32 million settlement, and to spend an additional $3 million to improve its affirmative action program. Then, in 1975, Nuclear Regulatory Commission officials charged GE with violating federal law in exposing four workers at the company's Vallecitos, California facility to radiation exceeding federal limits and failure to conduct adequate radiation surveys. GE agreed to repair more than 5,000 microwave ovens in June, 1985, after Food and Drug Administration officials charged that some of the ovens could leak radiation at levels 10 times the federal standard. The defective ovens were sold in combination with ranges under the names "Cooking Center" and "Versatronic." In February, 1981, GE was found guilty of conspiracy, bribery, mail and wire fraud in connection with a 1973 effort to secure a $92 million contract for construction of a power plant in Aguire, Puerto Rico. The company was fined $31,000 for maintaining a $1.25 million slush fund used to bribe an official in Puerto Rico in connection with the scheme. GE asserted that its role in bringing the scheme into the open should have been considered in the court findings. GE has admitted to a giant time card falsification scheme. Although the Justice Department fined GE $1.04 million and forced the company to pay back $800,000, only 9,100 of the 60,000 cards involved in the case were examined, suggesting that the fraud might have been much more significant. Moreover, GE has been involved in toxic dumping. Of the 195 toxic waste sites targeted for Superfund money by the EPA, GE was found to be responsible for 22. Sitting at the bottom of the Hudson River in New York today are 500,000 pounds of PCBs discharged into the river since the mid-1950s by two GE capacitor plants near Hudson Falls and Fort Edward. The company dumped as much as 30 pounds of PCBs into the Hudson each day during the late sixties and early seventies. At hearings on an effort by New York State to prevent GE from continuing the PCB discharges, GE admitted that the substance had been "involved in" illnesses of at least 65 GE employees over a 15 year period. GE stopped its toxic discharges only in 1977, after reaching a $3 million settlement with the State of New York. Commercial fishing, once a $5 million a year industry, remains restricted on the river because of the high level of PCB contamination in the fish population. GE has a long history of blatant disregard for the environment and has been charged with gross negligence because of its nuclear power plant designs. Even though GE was aware of the defects in its Mark series nuclear reactors, it continued to sell and export them in the Third World. INFACT's report states that "GE memos disclosed in 1987 revealed that GE has known how dangerous its reactors are since the late 1950s, yet it continued to build and sell them and tried to cover up their deadly flaws." Already more than two million people have acted to stop buying GE products, according to INFACT. With more citizens "voting with their pocketbooks," says INFACT, "citizens will be sending a clear, strong message to this leader of the nuclear weapons industry." The Nestle Campaign, INFACT reminds us, "proved that hundreds of thousands of people working together can change the behavior of even the most powerful transnational corporations." . |