Obama's Pick of Jeffrey Immelt Proves Cronyism and Incompetence Are Alive and Well

President Obama's pick of Jeffrey Immelt to head the President's Council on Jobs and Competitiveness proves once again cronyism and incompetence are alive and well in Washington. Second only to the illogical promotion of failed New York Federal Reserve President - Timothy Geithner to head Treasury, Jeff Immelt's selection can only be described as mind boggling. He is simply not qualified to lead this national effort.

As chief executive of General Electric, Immelt has failed miserably in creating jobs, profits, and stockholder equity. Given his track record, why didn't President Obama select a successful captain of industry to chair this council?

Mr. Immelt and the GE organization are an embarrassment when it comes to job creation and competitiveness. In terms of job growth, General Electric has NOT created a net job since 2005. In fact, the company has reduced its head count by approximately 7,000 employees during the period 2005 to 2010. Mr. Immelt and GE clearly don't create new jobs.

When it comes to profitability, General Electric has been going in reverse for years. In 2007, GE earned $22.21 billion. Subsequently in 2008, the company earned $17.41 billion. Then in 2009, earnings plunged to $10.7 billion. In 2010 the company is expected to earn approximately $12 billion, a 46% decline compared to 2007. Such an earnings record hardly ranks GE as competitive.

Under Immelt's leadership, General Electric has seen a stagnation of its net worth for over half a decade. The equity of the company has barely risen from $111 billion in 2005 to only $117 billion in 2010. Likewise, GE stock has fared miserably from January 1, 2005 to December 31, 2010. During this timeframe, GE stock declined from $36.50 to $18.29 per share, a slide of nearly 50% ! During this same period, the S&P 500 composite index increased by approximately 3.7%. Since the beginning of his tenure on 9/7/01, Immelt has presided over the destruction of nearly $100 billion in shareholder wealth.

While Immelt has NOT succeeded in creating jobs or increasing profits, he has shown great skill in securing financial bailouts and special financing from the U.S. government. During the financial crisis, GE received a $139 billion line of credit from the FDIC's - Temporary Liquidity Guarantee Program, whereby the FDIC guaranteed GE's monstrously leveraged balance sheet. An imprudent balance sheet Jeff Immelt failed to de-leverage. Similarly, GE tapped the Federal Reserve's Commercial Paper Funding Facility for $16 billion to keep itself from insolvency.

In conclusion, Jeffrey Immelt is neither qualified or worthy to lead America's effort to create jobs and promote competitiveness. For the sake of his stockholders, Immelt needs to fix GE's problems rather than sit on nepotistic political councils. Mr. Obama is this the best man you could come up with?