Jeff Immelt evades question on corruption in India - not surprising when the General Electric's operating model in India has been corruption-friendly

Here is what Jeff Immelt replied to a question about corruption in India. 

"Mark Mobius, the legendary investor, tweeted saying India needs more reforms, more action, less corruption. You think corruption has been a big issue in India? 

Oh, I don't think it's gotten better fast enough, you know in other words the Indian people are awesome, the Indian business community is fantastic. There is maybe no finer group of CEOs that I see in any place in the world. I think we need to get movement on things like infrastructure so that every company can be its best, every entrepreneur can be their best, and sometimes those things get hung up by national disagreement. I understand that politicians have a job to do, they have different customers than I or you may have and I am respectful of that, but a lack of transparency is something that everybody should be against. Regardless of who wins, I think there is an opportunity for improvement." 

Note that his answer does not address the issue of corruption at all. This is a Freudian slip by a man who knows that General Electric's business model in India has engendered corruption and banked on corruption. 

Here is the full interview: 

India has to restore business confidence first: Jeff Immelt, Chairman and CEO, General Electric

By Satish John & R Sriram, ET Bureau | 2 May, 2014, 04.00AM IST

India’s slowdown has dampened GE’s performance, but Immelt is not ready to give in as he  is investing money in a new plant and sees a bright future for healthcare and manufacturing.

Jeff Immelt, the boss of General Electric, is in battle mode. Hours after negotiating with the French government and Alstom officials in Paris, he is in India, where the battle is of a different kind. India's slowdown has dampened GE's performance, but Immelt is not ready to give in. GE is investing money in a new plant and its chief sees a bright future for manufacturing and healthcare. Edited excerpts from a freewheeling chat with Satish John and R Sriram 

How is the Alstom deal shaping up? 

I think it is a good deal for Alstom, you know, it allows us to work with them, give them a little bit more scale and financial capability and technology. I think it's a good deal for GE. We, like Alstom, what they do, we think it's complimentary to us and install base and bigger emerging market footprints and new technology that we like and we think it's a good deal for France, for the country. So, yeah, but you know it's a process, the processes have started, we will see what works out of here. We are very excited about it. 

Is this deal only about emerging markets? 

I think it's one of the big features. We have been a big investor in emerging markets, and GE has, let's say, 45 billion dollars in emergingmarkets and Alstrom has, I think, 13 billion dollars in the emerging markets. So together, we are a real, we already are a substantial force. But this is a great combination. 

You have said in the past you would like industrial systems and businesses to contribute about 75 per cent to GE's turnover. So this deal would further help you. 

That, there, it makes our long-term goals faster and we know, we intend, we had a base plan to do anyhow in the next three years, and this will help us to do that even faster, yeah. 

India is currently going through an election and we hope to have a new government by May 16 and there are expectations that the new government could deliver on a lot of stuff that had been held up over the last, say one year or so, and a fair amount of optimism in the business community about what will happen. You think things will change in India after May 16? What kind of opportunities do you see? 

(Laughs) I think just getting decisions made is helpful. You know, in other words, it's not so important that we agree with every decision, but business is going to adjust if it knows which decisions are made. It seems like things have been hung up over the last 1 or 2 or 3 years in India. So regardless of how the elections turn out, I think just getting to the point where decisions are made will be helpful. I will give you an example. We are in the energy and natural gas business and you know, with a $4 price for natural gas, there is not going to be any development. If there is no development, there is no supply, if there is no supply, you know there is no gas power generation, etc, etc, and this is something that in theory has been approved or at least been discussed, but is yet to be acted upon. There is probably a dozen things just like that, that if there would just be some clarity on it, I think it would allow people to know what to invest and where to invest and it would be helpful to the system.

Mark Mobius, the legendary investor, tweeted saying India needs more reforms, more action, less corruption. You think corruption has been a big issue in India? 

Oh, I don't think it's gotten better fast enough, you know in other words the Indian people are awesome, the Indian business community is fantastic. There is maybe no finer group of CEOs that I see in any place in the world. I think we need to get movement on things like infrastructure so that every company can be its best, every entrepreneur can be their best, and sometimes those things get hung up by national disagreement. I understand that politicians have a job to do, they have different customers than I or you may have and I am respectful of that, but a lack of transparency is something that everybody should be against. Regardless of who wins, I think there is an opportunity for improvement. 

Has India delivered on its promise because in 2006 when I met you, the target hadn't been met. Again in 2009, the target had not been met. So do you think that India has delivered on GE's expectations as China has? 

I think at one point of time when we talked about that, it was growing in financial services, we thought the power sector would be bigger, gas availability and things like that. The job of a company is to find opportunities where they are. I do business in 170 companies, none of them are perfect. There is not even one country that I think of and I am like god that did everything that I wanted it to do. So has everything been perfect here? No, but am I discouraged about what ultimately GE can do to be successful here? I'm not discouraged. I think the people are fantastic here. Our GE team has such talent here, that is equivalent to talent in any place in the world. Will I put more capital here? I would say yes. 

The Pune facility that we have started is a fraction of the size that it will ultimately be. I'm extremely confident that it's going to turn out to be a big world-class manufacturing facility, I'm completely convinced. I actually think that our oil and gas business, where we make technology for subsea development that probably was a relatively small business here to go, I think it could be a billion-dollar business as time goes on. So there are new opportunities you know, but probably in 2006 I thought I could sell a bunch of gas turbines in India. (Laughs). 

If there is no gas, then you can't use a gas turbine as a paper weight. (Laughs). I think it just has to be, if you aren't flexible in this country, you shouldn't come. (Laughs). Life is too short, you should go someplace else, but if you can use the people to drive advantage, then I think you're in good shape. 

So this door that has opened for you, and with the other door closing, where does it lead to? Does it lead to healthcare? Is that a big bet in India? 

Yes, healthcare can be an extremely big market, and will continue to be a big market, and I'm convinced that the solutions found in the Indian healthcare market are going to find their way in the United States and Europe. I just think that this is the most important entrepreneurial healthcare market in the world. I think manufacturing is going to grow here. 

I think, this is a country most of us didn't think for manufacturing 5-10 years ago. Manufacturing could be a very important component of our longterm future here. Aviation will continue to grow, oil and gas will continue to grow, and in some capacity, really, the country needs electricity. So there is going to be a way to play the power market. 

You said in the past about coal being the real future, where, you know, coal-driven power plants are going to be the next big thing. So is that really one of the things that make you feel India is going to be the next big place? 

I think when you look at the potential, if, in fact, we end up doing all the strong transaction, it gives us tremendous amount of flexibility and, I would say, capability in India, because they are the leader in super critical coal technology. They are far better than we are, by the way. So no matter how you look at it, in the next 20 years, coal will still be the biggest fuel source and gas today is almost nothing in the country. If you think about India in the future then, coal and renewables are going to be the biggest drivers in India. 

What is the sense you get of the global recovery? I mean you have been in 117 countries and you must be doing various scenario planning. 

I think growth is available but there is volatility, but so I say there are three things I think about: one is the slow growth so the biggest marker in the world. So you have slow, steady growth, you have volatility, you have social unrest, a protocol, elections, things like that, they are just creating more value to it than we used to and then I just think we live in a time period where — and this is not just India, it's not just US, it's around the world — there is much more active government intersection with business. That's, I think, the residue of global financial crisis that when you go through a big dislocation, people get discouraged, when people get discouraged, politicians listen, and so politics and business intersect more today. 

I don't say it is a good thing or bad thing, it's just, I mean, I know the way I would like it to be, right, but like I said I think the way you survive in business is you are just not judgmental of these things, you know, in other words, there is a world I would love to see, but everyday we have 3,07,000 people in GE, they all have to come to work in the morning and know what to do, right, so even if I talk a lot about the elections, okay guys, we are not going to do anything until elections, we are not going to be a very successful company. So I think we learn to see things the way they are and deal with them in that capacity.

You better call it the internet of things. Where do you think it's on the maturity curve right now? It shows a lot of promise. Do you think it will turn into something that will deliver? (Jeff interrupts to answer) 

Yeah, so the way I look at it is, I always think about the company market pack, so we have a huge install base of gas turbines, jet engines, MRI scanners, things like that, that are enabled in a different way today than they were in the past, and a flight, let's say from Mumbai to Bangalore, one flight probably generates a terabyte of data on fuel consumption, heat of the engine, atmospheric conditions, the weather, and the ability to construct that data in a way that drives better performance is massive, huge, and somebody's going to do it, and now, I started this by saying, we need to own the performance of our products, we can't delegate that to anybody. 

So, if you say that in a world where these things are computers, that means you have to invest in the analytics and the software, and so I think industrial companies are all waking up in the morning saying maybe I went to bed as an industrial company but I have to wake up as an electrical company or else I'm not going to know the way my tractor operates or my elevator or my car, or anything else I do and so I think GE has to do that. 

You think that's the way for manufacturing companies to grow now, become more analytically oriented? 

I am always a believer that you need to understand, you need to follow markets and you need to understand where technology is going and I think it does for companies. They fail to access that trend at their own risk, really, because do you ever want to be selling a product and not know everything there is to know about how that product works with your customer, or delegate that to somebody in between? I think if you do that, you're taking the risk of your life, and that's just the way we look at. 

The fact is that you hire talent when you're GE. We have opened up a centre of excellence in Silicon Valley, so we've hired people from Cisco or, from Facebook, or other companies and you can hire talent and you know, I think it's important for companies to be flexible enough to change. For a hundred years, more than a hundred years, GE was the leader in material science, we probably have more material science patents than any company in the history of the world that's been behind jet engines, MRI scanners and stuff like that. 

If we don't get just as good in analytics as we are in material science, I think we're going to be dead meat. I don't know, it's going to be five years or 10 years, or some other time, but we're going to be, so that's a big thrust inside the company, and what I tell people is look we're going to take this wherever it goes, you know, in other words, I don't know if that means we are going to sell performance contracts or we are going to do this, that and the other thing but we need to follow these markets and these technical trends. 

Every time I go to Silicon Valley, the pace of innovation blows my mind, Bangalore, the same way, the pace of innovation and the world we live in today blows my mind.

Read at http://economictimes.indiatimes.com/opinion/interviews/india-has-to-restore-business-confidence-first-jeff-immelt-chairman-and-ceo-general-electric/articleshow/34501484.cms?prtpage=1