“The hoax was just the opening—the real work has to be done now,” Wedes said. “Changing the climate is not a one day thing.”
In tandem with the gift, the company is also announcing a host of new policies to restore public faith in the GE brand, including a commitment to keep American jobs in America, and to create one U.S. job for each new job created abroad. The ambitious plan will overhaul accounting systems to allow public transparency and phase out the use of tax havens in five years. “Given my recent appointment as President Obama’s Chairman of the Council on Jobs and Competitiveness, it is no longer appropriate for GE to engage in practices that, whether by fact or perception, are at odds with the greater good of the nation,” Immelt said.
GE is an international company with operations in over 100 countries, and “more than half of GE’s revenues come from outside the United States.” It’s not going to retreat back into the United States. Nor is Immelt going to link his advisory position with the Obama administration with the way he runs his company. It’s quite the fabulism.
Again, Wedes says this section is about how things should be.
“This is creative activism; this is activism of the mind,” he said. “This is saying we want to emphasize the things that we believe and care about, even if they aren’t the things that are being emphasized in corporate America.”
Immelt outlined several concrete steps he would take to push for modernized tax policies that reflect the realities of the global economy. “I will personally ask President Obama to work with Congress to require country-by-country reporting by multi-national corporations of the sales made, profits earned and taxes paid in every jurisdiction where an entity operates. Instead of moving money via “transfer pricing,” corporations ought to pay taxes in the jurisdictions where profits are actually made. If Congress is able to establish standard industry-wide solutions, GE will close our tax haven operations abroad, including our subsidiaries in Bermuda, Singapore and Luxembourg.”
And for his final act, Immelt will change the way multinational corporations are taxed in the U.S. (Hey, maybe they should rename the Treasury Building after Immelt )
This release was not just about GE giving back its (imaginary) tax refund. It was an announcement that the company will be completely overhauling the way it does business, while at the same time pressuring the President and Congress to overhaul corporate tax and accounting systems.
That leads me to a final criticism of AP’s story: its writer failed to fully capture the monumental news contained in this, the most amazing corporate press release in history.
Correction of the Week
“An entry in the ‘What’s on Today’ television highlights in some editions on Tuesday, about a new series on WE that stars the R&B singer Toni Braxton, misstated its title. It is ‘Braxton Family Values,’ not ‘Braxton Family Battles.’”- The New York Times