'Green' strategy has GE investor seeing red

A dissident shareholder has advanced an anti-management resolution for a vote at the General Electric shareholder meeting next spring.

Does he oppose GE's involvement in nuclear power? Or perhaps the company's big investments in China and India?

No. The resolution by a stock-fund manager challenges CEO Jeff Immelt's conviction that global warming is upon us and the industrial titan must respond with "green" technologies and practices designed to curb pollution in order to turbocharge GE's growth.

Huh?

That's right, not everybody is pleased with Immelt's "green is green" strategy. Immelt is pushing GE into fast-growing businesses such as wind-turbine manufacturing, more-efficient train and jet engines and cleaner coal-fired power plants.

In a pointed speech delivered last spring in Washington, Immelt pledged that GE would cut its carbon-dioxide emissions, the main "greenhouse gas" pollutant, below the level of 2004 as it increases revenue of its industrial businesses by 40 percent by 2012.

GE, under Jack Welch, was better known for thumbing its nose at environmentalists and regulators and for refusing to clean the Hudson River in New York of barrels of toxic chemicals it dumped in the 1950s and 1960s.

But Immelt has concluded that GE's main competitors in Europe, Asia and elsewhere are investing heavily in efficient, next-generation equipment that energy-conscious customers are demanding. Moreover, GE's fastest-growing businesses involve wind, fuel cells, water-treatment and sewage systems sold to customers in China, India and other emerging economies that lose a disproportionate number of their people to pollution-related diseases.

Heck, even President Bush, who a few years ago was bad-mouthing worldwide pollution-curbing accords, told the nation that the United States must break its "addiction" to oil. Bush was at 3M Co. on Thursday extolling the promise of ethanol and challenging U.S. chemists and engineers to innovate our way out of the energy mess.

Welcome aboard, Mr. President.

Yet at least one GE shareholder doesn't buy the case for global warming.

Steve Milloy, portfolio manager at the Free Enterprise Action Fund, wants Immelt and GE to stop advocating global-warming regulations and solutions.

Milloy this week said "global-warming alarmism" results from questionable science, that global warming -- if it's real -- might be beneficial, and it's dumb for Immelt to invest to help prevent global warming rather than in technologies that adapt to a warmer, wetter world. There's more on that at www.FreeEnterpriseActionFund.com.

I cast my ballot with Immelt and the science that says we don't want to cook in our own gases -- particularly if you live on a coast. The GE chief executive seems to be hedging against global warming with the same technologies that will be needed if things get worse.

Moreover, the industries built around efficiency, cleaner fuels, conservation and environmental concerns are some of the world's fastest growers.

Also, as Bush has pointed out, exporting hundreds of billions of dollars annually for increasingly expensive oil isn't in America's best interest. Talking about an "oil addiction" for a onetime Texas oilman must have been tough the other night. But the alternative is worse: buying more oil from countries that sponsor terrorist groups.

GE and several dozen other industrial giants, including United Technologies, DuPont and British Petroleum, have united under the Pew Center on Global Climate and other banners to voluntarily curb their emissions.

Henry Ford, the founder of Ford Motor Co., designed his Model T to run on ethanol, fermented from plants, before oil was widely available.

Nearly a century later, his descendant, Ford CEO Bill Ford, is betting the family fortune and the future of his shrinking company on leap-frog technologies that can compete with Toyota and Honda. Ford hopes to produce comfortable, gas-sipping vehicles that also can run on ethanol, batteries and hybrid-drive systems.

Immelt, who turns 50 this month, is known as a tough-minded, shrewd executive who was good at listening and anticipating trends in several GE businesses he led before he was tapped in 2001 by the GE board to succeed Welch.

An offensive tackle and math major at Dartmouth, and a Harvard MBA, Immelt worked summers on a Ford assembly line in Cincinnati to help pay for his Ivy League education.

Whether you buy the global warming argument or not, it's tough to argue with Immelt and Ford on their conclusion that cleaner, more efficient products will become the standard. There's only so much oil.

By the way, GE's stock, which fell to $23 during the market swoon of 2001-02, now trades around $33, and the company reported record sales and earnings for 2005.

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com