GE Unleashes Propaganda Campaign To Hide Its Tiny Tax Burden and Mass Layoffs


The following article first appeared at Working In These Times, the labor blog of In These Times magazine. For more news and analysis like this, sign up to receive In These Timesweekly updates.

 “The twentieth century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.

—Alex Carey, author of Taking the Risk Out of Democracy.

No corporation has surpassed General Electic's mastery of profit-maximization, or its use of public-relations ("corporate propaganda") to mask its true aims behind the widely-supported goals of expanding scientific horizons, "bringing good things to life" and rebuilding America's industrial base.

But sometimes the profit-maximization skills of GE's top executives and tax lawyers surpass the ability of its PR staff to put an appealing gloss on the company's conduct. For example, the disclosure that GE racked up $14.2 billion in profits in 2010 while paying no federal income taxes was not well-received by the American public. GE not only avoided paying any taxes, but even managed to collect $3.2 billion in federal tax credits. This occurred against a backdrop of GE continuing to slash its U.S. workforce by 32,000 jobs, from 165,000 to 133,000 over the 2004-2010 period.

For millions of American facing a shrinking supply of middle-class jobs, falling wages, and disappearing benefits, revelations about GE have fed a renewed hostility to "free enterprise" and undoubtedly helped fuel the "Occupy" movement, now experiencing a spring resurgence.

"In my 25 years of dealing with GE, I have never seem them that embarrassed by any other issue, and so knocked off stride," said Chris Townsend, political director of the United Radio, Electrical and Machine workers (UE) union and a veteran of negotiations with GE over the past 25 years. "GE had so agitated even the mainstream media that the media sought us out," a rare occasion in the unionist's experience.


But major corporations like GE do not remain passive targets for public outrage. Instead, they plan carefully and mobilize vast resources to re-brand themselves in the public eye. With numerous stories about corporate taxes certain to appear around April 15, GE is eager to divert attention away from its paltry tax burden and focus the spotlight on its supposed mission of providing U.S. jobs by turning out products needed by Americans.

Kicking off with the Super Bowl, GE has been filling the airwaves with ads aimed not at selling GE products to consumers, but at reassuring U.S. citizens that GE's driving mission is to meet human needs, provide deeply-satisfying work to its employees, and revitalize America's manufacturing base. The ads don't mention that the corporation paid an average of just 2.3% in tax on its income over the last 10 years, according to Citizens for Tax Justice.

 "We're seeing signs that GE has started to develop and spread a pro-active message," said Townsend. "It looks like they're trying to build a new image. I think it's aimed at serving as a dump-truck to dump the tax issue."

On its website, GE says it has created 13,000 jobs in the United States since 2009. But it is unlikely that the figure represents a net gain, since it has closed 18 plants and made significant job cuts during the same period, as I reported here.

The GE ads skillfully trigger a sense of warmth as they show GE workers expressing pride in their skilled work, satisfaction in assisting severely-ill patients, a profound sense of teamwork crossing racial and gender lines, and a deeply-felt mission based on the slogan: "GE Works." To highlight just a few elements of GE's public-relations offensive:

1) In one ad, GE workers at the Waukesha, Wis. Medical Equipment Division, which makes magnetic resonance imaging machines, X-ray machines and other cutting-edge medical devices, are shown getting their-much-cherished wish of meeting a busload of cancer patients whose recovery was aided by GE's medical products.

Unmentioned, however, is the fact that GE has transferred the headquarters of the Medical Equipment Divisiion to Beijing, China. "Waukesha will not be doing GE's innovations, which will now be centered in China," said Chris Townsend. "This doesn't mean that the Waukesha plant will close right away, but the company's advances will be taking place in China and Waukesha will be making more out-of-date products. GE will be bringing in the new machines from China," Townsend adds.

The shift of the division's HQ is part of GE's $2 billion plan fror new investment in China.

While GE has claimed that the shift of its Medical Equipment Division headquarters will not result in a net loss of jobs, employment in Waukesha has been cut by about 50 percent in recent years, Townsend estimates.

2) An ad aired during the Super Bowl this year (see above) is set at its Louisville Appliance Park: "See how GE employees in Louisville's Appliance Park are changing the way appliances are manufactured in the U.S., and how it's helping to create jobs."  The ad includes a memorable scene where an African-American woman recounts how fortunate she was to find work at GE, as it occurred after the plant where she worked closed after 33 years.

But GE conveniently avoids the big picture on jobs at Louisville. The Appliance Park has lost about 80 to 90 percent of its jobs over the last two decades, Townsend says. 

To its credit, the company is expanding the Louisville plant by 400 jobs—but only after wage concessions by the union [IUE] and "up to $17 million in city and state incentives," according toAppliance Magazine. Furthermore, the company claims it will create 1,300 jobs in the U.S. after a $1 billion investment in its Appliance Division is completed.

3) GE's Schenectady, N.Y., steam-turbine plant is the focus of a third ad. "When you think about GE, do you you think about beer?" the GE website asks. " See how GE employees in Schenectady help power cities, schools, businesses... and even beer."

Working stiffs are supposed to value cold beer more than anything else, right? But some workers may be just a bit less taken by GE when they learn that GE eliminate abouty two-thirds to three-quarters of the jobs in the plant, according to Townsend.

We can expect that GE will keep up with its onslaught of TV ads depicting it as a company committed to manufacturing in America. GE also appears to be utilizing "third-party" voices—conservatives who show up repeatedly on TV talk shows—to defend the company's tax record, Townsend says.

He doesn't expect a thorough look at GE's overall record from the mainstream meida. "The major media never check on the discrepancy on GE's job forecasts and the actual number of jobs they produce," he says.

Moreover, GE can expect continued success with most mainstream reporters and pundits, ardent worshippers of "free trade," by claiming that opening more plants in Mexico and China will somehow generate more jobs in the U.S. because the company's consumer base has expanded.

"GE could open a plant on the moon, and a lot of the media would be saying, 'Oh, Jeez, now we can export to the moon," Townsend says.

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