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Is Jeff Immelt Cheering for Keith Olbemann While His Company Burns?

Written By mista sense on Wednesday, April 16, 2008 | 3:58 PM

So Jack Welch, the General Electric corporate legend--one business survey dubbed him "CEO of the century"--has much to be proud of. But one topic that he seems touchy about is the current condition of his corporate alma mater, GE, and the status of GE's farflung holders under the inept leadership of his handpicked successor, Jeff Immelt. But hey, I just report (OK, TV Newser reports); you decide whether or not Jack is defensive about GE.

In fact, GE is in the middle of a lot of controversy these days, not only because its stock price is down, but because as a global conglomerate, it seems to have its fingers in some pies that it shouldn't. Bill O'Reilly has been raising some important new issues, such as whether or not GE is facilitating Iran. That's a strong charge by O'Reilly, worthy of inquiry, both journalistic and governmental.

Now here's where it gets particularly interesting for Cable Gamers: Because Keith Olbermann--who hosts, of course, a show on MSNBC, which is a subsidiary of NBC, which is, in turn a subsidiary of GE--is accusing O'Reilly of targeting GE because of O'Reilly's antipathy toward Olbermann (which, of course, is completely mutual). In other words, because O'Reilly doesn't like Olbermann--and once again, it's important to bear in mind that it's Olbermann who started the feud; he routinely calls O'Reilly "the worst person in the world"--that's why O'Reilly is going after GE, parent to MSNBC.

Now the Cable Gamer doesn't know if Olbermann's allegation is true or not, even in part. But in any case, either the substance of the allegations is true, or it's not true. Is GE playing footsie with the evil regime in Iran? Let's find out! And if it is true that GE is helping, even indirectly, Iran's goal of going nuclear, then GE's action must be investigated, and the activity must be put to a stop.

But in the meantime, it's interesting that Olbermann is getting so enmeshed in corporate politics, in addition, of course, to his usual Republican-bashing politics (and more recently, his Hillary Clinton-bashing politics, as the left-wing KO does everything possible to help his man, Barack Obama, win the Democratic nomination, on the way to winning, Olbermann hopes, the White House).

Olbermann assures his viewers that he is acting--acting out is more like it--with the full acquiescence of the GE top brass. Now that's interesting. The Cable Gamer had always assumed that Immelt and the other GE chieftains were too busy worrying about manufacturing and finance to worry about what's on a dinky subunit such as MSNBC. But maybe that's wrong. Maybe even Immelt himself is cheering Olbermann on. Maybe GE wants Obama to win. Such a Democratic victory might be bad for business overall, but it might be good for GE, in particular, since Immelt is determined, as a matter of corporate grand strategy, to take his company in a politically correct "green" direction. Maybe President Obama and his environmental guru, Al Gore, would mandate that everyone buy GE solar panels. That would be good for GE's bottom line.

Although, of course, some would say that if Obama and the Greens are bad for business overall, they will be bad for GE, too. Maybe Immelt doesn't see it that way. Or maybe Immelt plans to leave GE soon enough--perhaps for a job in the Obama administration or some big environmental/conservation group or maybe some global government group or philanthropy?--and because of that planned exit-strategy, he worries more about his standing in "enlightened society" than he worries about GE shareholders. Immelt may have been a disaster as CEO, but he's made hundreds of millions of dollars in salary and bonuses over the years--he has enough money that he can afford to be a liberal!

So for all The Cable Gamer now knows, maybe Immelt is watching Olbermann every night, hooting and hollering as KO sticks it to Bush and the GOP. That's a little counter-intuitive to most people's understanding of big business, but in fact, lots of corporate big shots--Bill Gates, Warren Buffett, George Soros--are not only left-wing, but way left-wing. And maybe Immelt is in that camp--it would certainly explain why Olbermann feels so emboldened to Bush-bash and to Obama-boost.

But there's a catch. Immelt may be good for Olbermann, protecting Olbermann, but as the evidence shows, Immelt is not good for GE. As the chart above demonstrates, GE has underperformed the Dow just in the last year--note the steep plummet in the last week that totally tanked GE stock, to just 32 and change, well less than half of what was as recently as 2001. (Note to Jeff: spend less time on "Countdown," and spend more time counting your corporate beans!)

And so GE is in trouble--maybe terminal trouble for its life as a super-conglomerate. The Cable Gamer can say, "I told you so."

Loyal readers might remember--or might need to be reminded-that TCG first broached this possibility nearly a year ago--on July 24, 2007. Under the headline, "Bye bye NBC-U? And you know what that means, MSNBC and CNBC," I pointed to an earlier New York Times story, in which Jeffrey T. Sprague, a Citigroup analyst, suggested that breaking up General Electric would be a good way to unleash shareholder value currently buried in GE's over-conglomeration and underperformance.

It's one thing if your conglomerate is run by a genius such as Welch, it's another thing if your conglomerate is run by Immelt. Immelt is plenty smart, of course, but one needs to be REALLY smart to beat the market, which consists of lots of smart people, as Welch did for 20 years, 1981-2001. And Immelt is obviously not equal to that task. Adjusted for stock splits, GE stock went up about 3000 percent under Welch, triple the overall market. By contrast, GE stock is down 20 percent during Immelt's six-and-a-half-year tenure, during which GE has significantly under-performed the Dow Jones Industrial Average.

In other words, Immelt is watching MSNBC, when he should be watching his company--and his own back.

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