Sunday, June 26, 2011

Assets owned by General Electric; and the Bogus Unemployments Rate

 by Jef, your Spiderlegs Conundrum admin
 From Wikipedia, the free encyclopedia, Census.gov, BLS.gov, & the Huffington Post

Primary business units of General Electric, Inc.

Healthcare

Media
¹Minority interest
²Stations which LIN Television owns a minority interest (24%) in

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GE Aviation is a world-leading provider of commercial and military jet engines and components as well as avionics, electric power, and mechanical systems.

GE Transportation is a global technology leader and supplier to the railroad, marine, drilling, wind and mining industries. GE provides freight and passenger locomotives, railway signaling and communications systems, information technology solutions, marine engines, motorized drive systems for mining trucks and drills, high-quality replacement parts and value added services.

GE Healthcare provides transformational medical technologies and services that are shaping a new age of patient care. Our expertise in medical imaging and information technologies, medical diagnostics, patient monitoring systems, performance improvement, drug discovery, and biopharmaceutical manufacturing technologies is helping clinicians around the world re-imagine new ways to predict, diagnose, inform and treat disease, so their patients can live their lives to the fullest.

GE Capital is one of the world's largest providers of financing helping meet the financing needs for customers in more than 50 countries around the globe. For businesses, large and small, we deliver the capabilities that enable businesses to purchase, lease and distribute equipment, as well as capital for real estate and corporate acquisitions, refinancing and restructurings. For our 100+ million consumer customers, we offer credit cards, retail sales finance programs, home, car and personal loans and credit insurance. 

At GE Energy, solving our customers' toughest challenges is at the core of our business. As the demand for water, fuel, and electricity increases, GE continues to develop innovative products and services that help our customers serve the needs of people all over the world. Whether working with governments and communities to develop critical infrastructures or with suppliers to extend our factories and further globalize our platforms,  GE is building powerful partnerships that help us achieve mutual growth and success.  From our leading expertise to our technological innovation, no one is better equipped to power potential today and for years to come. Water & Process Technologies offers proven solutions and new approaches that can protect your high-value assets, maximize run times, reduce maintenance and save energy. Our leading chemical, filtration and separation technologies have a rich history of results in water and process applications.

NBCUniversal is one of the world’s leading media and entertainment companies in the development, production, and marketing of entertainment, news, and information to a global audience. NBCUniversal owns and operates a valuable portfolio of news and entertainment television networks, a premier motion picture company, significant television production operations, a leading television stations group, and world-renowned theme parks. Comcast Corporation owns a controlling 51% interest in NBCUniversal, with GE holding a 49% stake.

And the business for which GE is most known for...

GE is one of the largest manufacturers of major appliances in the world, producing Monogram®, GE Profile™ and many more brands. Discover how GE appliances deliver their remarkable efficiency. Built with reliability and usability in mind, GE products use the best of technology making life easier every room of the house. Since the day Thomas Edison discovered a better filament for the incandescent lamp, GE has been lighting up the world. 128 years later, we still provide a range of innovative products for consumer, commercial and industrial markets.

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So, here you have the industries of: home appliances, lighting, energy (incl. oil & gas), healthcare (incl. pharmaceuticals, accounting, software and technology), finance (investing, commercial loans, individual loans), transportation (rail, freight), aviation (incl defense/military technology and systems), and media.

Do you think they might have a few lobbyists in Washington, DC? Heh, yeah, they have quite the lobbying effort:



2010 Total Lobbying Expenditures: $39,290,000
Subtotal for Parent General Electric: $39,290,000 
General Electric Lobbying by Industry
Industry
Total
TV/Movies/Music
$525,000
Misc Defense
$80,000
Misc Energy
$30,000
Finance/Credit Companies
$1,730,000
Pharmaceuticals/Health Products
$120,000
Air Transport
$160,000
Railroads
$534,000
Misc. Manufacturing & Distributing
$36,021,000



Two of the items in bold are industries which have had major legislation passed regarding those industries--the finance bill, the healthcare bill. Defense is bolded because because we are embroiled in 5 wars (so far) with others expected.But look at the category in which they spent the bulk of their lobbying cash: Misc. Manufacturing and Distributing.

There are several companies listed when you click that link. I picked Reynolds American because it sounded familiar, which it's the RJ Reynolds Tobacco Company with a new name. GE spent $1,926,881 lobbying for their stake in the tobacco industry.


Some of the lobbying firms GE hired:

Federal Policy Group - $840,000
Capitol Tax Partners -   $840,000
Ernst & Young  -  $600,000

Click on any of the industry links under GE lobbying expenses and you'll see breakdowns for where they spent their money. It's obvious that much of that misc $36 million went toward the defense, healthcare and financial industry lobbies, too, though they fell under misc.

Some other interesting items about GE:

Jeffrey R. Immelt, the chairman and chief executive of General Electric Co. tapped by President Barack Obama as his next top outside economic adviser, will be asked to guide the White House as it attempts to jump-start lackluster job creation and spur a muddled recovery. Immelt told analysts that he'll focus on tax policy and regulation.

GE represents the archetypal company that's hoarding cash, sending jobs overseas, relying on taxpayer bailouts and paying no taxes.

The company is sitting on $79 billion in cash, tops worldwide among non-financial publicly-traded companies, according to a Jan. 10 note by analysts at Standard and Poor's. In fact, GE's cash holdings are about 62 percent more than the next company, Toyota Motor Corp.

One in five American workers is jobless, or severely under-employed at a minimum wage job. The BLS U3 Current Population Survey unemployment rate (the one that is most used by the media, yet the least accurate) has been stuck above 9% for 20 consecutive months, the longest such streak since records began in 1948, according to the Labor Department. Of course, back then they used different numbers, like what the U6 reflects.  

The U3 is based on numbers gained by the Current Population Survey (CPS), which is a monthly survey of about 50,000 households conducted by the Bureau of the Census for the Bureau of Labor Statistics. The sample is selected to represent the civilian noninstitutional population. Respondents are interviewed to obtain information about the employment status of each member of the household 15 years of age and older. However, published data focus on those ages 16 and over. The sample provides estimates for the nation as a whole and serves as part of model-based estimates for individual states and other geographic areas. You see, the U3 is not even real data--it's a sample of data from which the BLS make estimations of the actual numbers. It has no way to include factors like differences due to geographical regions, natural phenomenons (weather, natural disasters)--if several industries in a region layoff workers but the survey is conducted in a region in which there have been no layoffs, this data is not reflected. Yet it plays such an important role in determining such an important statistic.

The U3 does not include: 
  • workers who have given up looking for work but still want a job
  • workers who have given up looking for a job all together because they feel they can't find one
  • were kicked off unemployment
  • workers who have taken a lesser job that they normally would not hold because they cannot find suitable employment
The U6 includes all these people. All in all, U6 suggests a very different employment picture than U3 and today's headlines should be looked at with extreme caution.  The 9.1% (May 2011) number they throw around is an incomplete stat, purposely used to make unemployment seem better than it is, which is bad. People are suffering.

As you can see below (if you click the BLS Table A-15 link), the real unemployment rate for May was not 9.1% , but really 15.8%, and that still includes the U3 numbers which are estimations. I realize that all statistics in a country of 325 million people are estimations to some degree, but to rely upon a statistic which is purposefully incomplete is misleading at best, dishonest for sure. The U3 basis for determining unemployment was devised under Reagan but implemented either at the end of Bush I's term or beginning of Clinton's first term.

Here's how the Unemployment data breaks down in the BLS Table A-15**:
  • U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
  • U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
  • U-3 Current Population Survey--Total unemployed, as a percent of the civilian labor force; (official unemployment rate)
  • U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
  • U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force
  • U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

As the administration struggles to prod businesses to create jobs at home, GE has been busy sending them abroad. Since Immelt took over in 2001, GE has shed 34,000 jobs in the U.S., according to its most recent annual filing with the Securities and Exchange Commission. But it's added 25,000 jobs overseas. At the end of 2009, GE employed 36,000 more people abroad than it did in the U.S. In 2000, it was nearly the opposite.

And rather than invest in the U.S., the company has decided to look elsewhere. In 2008 and 2009, GE decided to "indefinitely" reinvest prior-year earnings outside the country, according to SEC filings. That's helped the firm lower its tax rate. In 2009, GE effectively had a negative tax rate, thanks to the $498 million loss it booked on U.S. operations versus the $10.8 billion in earnings it booked abroad. GE realized a $1.1 billion tax benefit in 2009.

"...we think GE has something to teach businesses all across America," Obama told a crowd of GE workers at a plant in Schenectady, New York.

GE continues to benefit from lower costs thanks to the $55 billion of outstanding taxpayer-backed debt its finance unit has issued under a crisis-era program that was supposed to be for banks. All told, GE and its subsidiary, GE Capital, accessed nearly $100 billion through programs created by the Federal Reserve and Federal Deposit Insurance Corporation to combat frozen credit markets.

And the GE CEO is Obama's go to guy for improving the economy and creating jobs. Does anyone else feel like this is the script for a really bad Twilight Zone episode? Is their a worse person Obama could have picked for this job? Maybe Lloyd Blankfein (Goldman Sachs CEO).

**NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.
at 11:44 AM
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