With more than 330,000 employees scattered across nearly every country on the planet, US industrial conglomerate General Electric (GE) is as globalised as a company can get.
“I would say that in every way, globalisation has helped us build our company,” long-time CEO and chairman Jeffrey Immelt told an investment forum in Washington, DC in June. Over the past 15 years, 85% of GE’s jet engines and gas turbines – two of its biggest products – have been sold outside the US, Mr Immelt pointed out. In China, GE’s healthcare business brings in almost $2.5bn of revenue. “This is one industry in one region. It is on its way to being bigger in China than it is in the US. I have been in that business since the late 1990s when our revenue [in China] was zero,” he said.
The business of glocalistaion
But making the most of globalisation means tying it to localisation, a concept some lovers of corporate jargon have given the cringeworthy name ‘glocalisation’.
“What drives our success today is connected localisation. We are in 180 countries around the world and maintain a relevant position in all of those countries. We have a philosophy that our market share in every country we sell in should be as high as or higher than it is in the US,” said Mr Immelt.
“In this era of disruption you need to be present in the markets that you want to sell to… That has led us in our company to be much more decentralised and much more local than we used to be. If you want to sell in the US, or in our case if you want to sell in China, you have to be in these countries. You can’t have a bunch of people in an outpost who are having teleconferences at 6am reporting back to headquarters.”
Mr Immelt admitted this advice is easier for large companies to follow than SMEs, which do not have the same means at their disposal as a goliath such as GE. “Globalisation is very risky. Our size is a big benefit. It is harder for a small company to survive unless it comes into the market with a GE-sized company,” he said.
After lauding globalisation, Mr Immelt perhaps surprisingly offered a robust defence of US president Donald Trump’s nativist stances on trade and investment. Like many business leaders, Mr Immelt, who plans to step down at the end of 2017 after 16 years at the helm of GE, welcomes Mr Trump’s proposed corporate tax and regulatory reforms as well as plans to upgrade the US’s creaking infrastructure. He is also sanguine about the president’s ‘America First’ rhetoric.
“I’ve travelled the world for 35 years. I’ve heard this [type of] speech in every language 100 different times, and there’s nothing wrong with the president of the US standing up for a level playing field [for US companies],” he told fDi. “Do I agree with everything? No. But on the big points I think there’s a chance to make the US more competitive, reduce the trade deficit and get more people back to work, and there’s nothing wrong with that.”
Mr Immelt also pointed out that just as globalisation has gone in and out of favour during his three-and-a-half decades in the business world, transnational companies should be able to navigate global markets regardless of fluctuations in political sentiment. “For companies such as GE, we’ve had 70 years of trade deals and [plenty of time] to get our act together globally,” he said. “We can fight it out on our own outside the US. If you’re a company of our age and you don’t have your own global footprint, shame on you.”