Obama Taps GE's Immelt to Head Economic Advisor Panel

By Julianna Goldman and Rachel Layne

General Electric Co.’s Chief Executive Officer Jeffrey Immelt. Photographer: Brendan Hoffman/Bloomberg

President Barack Obama will name Jeffrey Immelt, General Electric Co.’s chief executive officer, to head his outside panel of economic advisers, replacing former Federal Reserve Chairman Paul Volcker.

Immelt wrote in an op-ed today in the Washington Post that Obama asked him to take the helm of the newly renamed President’s Council on Jobs and Competitiveness. The group will reach out to labor and business leaders to serve “as a catalyst for action,” he wrote.

Immelt, 54, is an original member of the panel, which was formed as the President’s Economic Recovery Advisory Board in February 2009. GE’s CEO since 2001, he heads the world’s biggest maker of jet engines, medical-imaging equipment and power-plant turbines and gives the White House a corporate heavyweight to help burnish Obama’s pro-business credentials.

He has sounded many of the administration’s themes: boosting jobs through U.S. exports, ensuring companies can compete with powers like China and India, and jumpstarting a clean-energy economy. Immelt wrote today that he and Obama are committed to making the U.S. “the most competitive and innovating economy in the world.”

‘The Right Aspiration’

“It’s the right aspiration,” Immelt who will still serve as an outside adviser in his new role, said of the president’s goal of doubling American exports to more than $2 trillion in five years, during a Nov. 6 interview in Mumbai, where he joined Obama for a meeting with business leaders. “We’ve done it in the last five years as a company.”

Obama will formally announce Immelt’s appointment today when he travels to Schenectady, New York, an administration official said on condition of anonymity. That’s the birthplace of GE’s energy business and where the steam turbines in a $750 million order from India’s Reliance Power Ltd. announced in November will be built for export.

GE today is also scheduled to report fourth-quarter and year-end results. GE Capital, transportation and health care may help push the Fairfield, Connecticut-based parent company’s fourth-quarter profit to 32 cents a share, from 28 cents a year earlier, according to analysts surveyed by Bloomberg.

Immelt will head the renamed advisory panel that Obama announced shortly after his 2008 election with Volcker standing beside him. The board was meant to bring together business executives and other experts to advise the president on combating the worst recession since the Great Depression.

Volcker’s Role

The panel’s start-up was delayed, and Volcker, known for taming inflation as Fed chairman in the 1980s, told colleagues he sometimes felt it was more of a public relations tool for the White House, according to a person familiar with his views.

Still, he advised the administration on the rewriting of financial laws. And the Volcker rule -- which banned proprietary trading at banks and restricted their investments in private- equity and hedge funds -- was named after him. Volcker had agreed to serve only for two years as head of the board and plans to be available to advise the administration, according to another person familiar with the matter.

“Since my campaign for president, I have relied on Paul Volcker’s counsel as we worked to recover from the worst economic crisis since the Great Depression,” Obama said in a statement. “I will always be grateful to Paul Volcker for his service as the head of my Economic Recovery Advisory Board. I have valued his friendship and skill over the years, and I will rely on his counsel for years to come.”

Naming New Members

While Obama is expected to name additional members to the panel, he won’t do so today, the administration official said. Members of the existing board include Robert Wolf, head of UBS AG’s Americas unit, Jim Owens, former chairman of Caterpillar Inc., and Richard Trumka, president of the AFL-CIO labor union federation.

Having a corporate leader as Volcker’s replacement may prove to be an asset to Obama when the president comes under attack from groups like the U.S. Chamber of Commerce.

Immelt, a self-described Republican, has emerged as one of Obama’s most visible outside economic advisers. In addition to the summit in India, he was among the executives who met with Obama and Chinese President Hu Jintao this week and later attended the state dinner honoring the Asian leader.

His relationship with Obama wasn’t always close. During the 2008 campaign, Immelt, who counts former President Ronald Reagan as a “personal hero,” donated $2,300 to Obama’s Democratic primary challenger, Hillary Clinton, and $2,300 to the Republican presidential nominee, Senator John McCain of Arizona, according to the Washington-based Center for Responsive Politics.

Administration Goals

Yet in recent months, Immelt has championed some administration goals against criticism.

“It’s a great step he’s taking, meeting with CEOs,” Immelt said after a Dec. 14 talk with investors before Obama’s summit with business leaders in Washington. He described as “real positives” Obama’s agreement to extend Bush-era tax cuts and “the tone of just being open to work with business.”

Immelt is among a group of executives -- Boeing Co. CEO Jim McNerney, Motorola Solutions Inc. CEO Greg Brown and Honeywell International Inc. Chairman David Cote -- who have voiced support for Obama policies. The four serve on several of the president’s outside advisory boards.

U.S. corporate profits in the third quarter of 2010 exceeded the 2006 high reached before the recession. Optimism about the economy among CEOs of the largest companies rose in the fourth quarter to the highest level since the start of 2006, according to a Business Roundtable survey.

6,500 New Jobs

GE has announced 6,500 new U.S. manufacturing jobs and retained more than 8,700 permanent and temporary positions across its manufacturing units in the past two years.

Many of the jobs are tied to Immelt’s export push. GE this week announced joint ventures and orders for Chinese rail, aviation and energy projects that may yield $2.1 billion in sales, creating or retaining about 5,000 jobs.

GE had 304,000 employees at the end of 2009, with about 134,000 based in the U.S.

While Immelt will head an advisory panel for a Democratic administration, that won’t prevent him from embracing his Republican leanings.

GE will be the lead sponsor of celebrations marking Reagan’s 100th birthday, donating $10 million for the two-year schedule of events. Reagan said in his memoirs that he honed political and leadership skills as television host of General Electric Theater from 1954 to 1962.

Reagan had “a very simple vision for the country,” Immelt said in a March interview. “He had a ‘one-two-three, this is what we’re going to get done’ about him, and I think that’s important for business leadership as well.”