Obama Selects 'Worst CEO of 2008' to Economic Advisory Panel, Says the Free Enterprise Action Fund (Ticker: FEAOX); How Does Running GE into the Ground Qualify CEO Jeff Immelt to Help Steer Nation in Time of Crisis, Mutual Fund Asks
/PRNewswire-USNewswire/ -- President Obama's selection of GE CEO Jeff Immelt as a member of his economic advisory panel raises questions about the panel's financial acumen, competence, and patriotism.
"Immelt's selection can't be based on his performance as CEO or loyalty to our country," said Tom Borelli of Action Fund Management (AFM), the investment adviser to the Free Enterprise Action Fund (Ticker: FEAOX), a publicly-traded mutual fund. Immelt was ranked as one of the Five Worst Non-Financial-Crisis-Related CEOs of 2008, by the FEAOX in December 2008.
"Under Immelt's leadership, GE's share price has dropped to 14-year lows and has underperformed in both bull and bear stock markets," said Borelli. GE Seems to be facing its own economic crisis brought about by Immelt:
-- Late last year GE was forced to raise about $15 billion to assist GE
Capital - its ailing finance unit;
-- The Federal Deposit Insurance Corp is temporarily guaranteeing up to
$139 billion of GE's financial unit's debt; and
-- Stock analysts and bond rating agencies recently stated that GE's
triple-A credit rating and its dividend are in jeopardy.
Immelt has also consistently defended GE's right to profit from business dealings with the government of Iran - a state sponsor of terror, Borelli said. GE's customers included government owned electrical utilities and the Minister of Oil despite the fact that the CIA stated that it's the Iranian government's policy to "facilitate the killing of Americans in Iraq."
In defending its business dealings with Iran to the U.S. Securities and Exchange Commission, GE stated that, "The issue of whether to conduct business in certain countries is complex; we must take into account not only the views of the U.S. Government but all relevant stakeholders." GE conducted business with Iran until mid-2008.
"Given Immelt's track record we're astonished that Obama would select him to an advisory board," said Borelli. "But let's not forget that GE is one of the biggest players in the Washington D.C. political scene - spending an average of over $20 million annually for lobbying over the past four years."
"We also wonder whether Immelt promised to promote Obama's green agenda though NBC's vast media empire. Timely news and entertainment programming could advance public support of cap-and-trade legislation to address global warming which might mandate sales of GE wind turbines - creating a win-win for Obama and Immelt, but a lose-lose, we believe, for consumers, taxpayers and GE shareholders," Borelli said.