Interview Transcript: GE's Jeff Immelt
The following is a transcript of a CNBC interview with General Electric Chairman and CEO Jeff Immelt on CNBC's "Morning Call" today at 10:10 AM ET.
Mark Haines: We keep forging more and more into record-high territory here at the big board on the Dow industrial average. Meantime, heavy hitters in health care industry meeting in New York right now addressing key components to strengthen our country's health care system. Joining us live from the event to talk about health care and other corporate events is Jeffery Immelt, chairman and CEO of General Electric, which among other things, owns CNBC. Good morning, sir. Good to see you again.
Jeff Immelt: Mark, how are you? Good to see you.
Mark: The technology is marvelous. The energy technology and things like that, they're marvelous. But it seems to me that what needs to be done, what people in your position need to do is to somehow pave the way for more -- an easier path to getting payment for it. Most people in their health care plans have to battle with their health care plan to get imaging technology like an MRI or whatever. You can invent the greatest machines in the world. But if people don't get it into their health plan, it doesn't do them a whole lot of good.
Immelt: You know, Mark, one of the things we're talking about today is early health, which is the combination of diagnostics and therapy to really demonstrate to the health care system that ultimately this is lower cost and higher quality for the patient in the system. I think what people in the industry like GE have to do, along with insurers and we're a big insurer ourselves, is to continue to demonstrate that spotting disease earlier is a way to lower health care costs, whether it's in cancer, heart disease, diabetes, breast cancer, and that's what a session like today is all about, to work with the press, our customers and public policy experts to make sure that's what's going on.
Mark: Who else is there today?
Immelt: We've got media, we've got some big customers. We’ve got some public policy officials. We do this about every 18 months, not just in the U.S., but around the world, to talk about the aspect that technology isn't just about driving up expenses over the long term. it lowers long-term costs. We believe for our employees as well.
Liz Claman: Mr. Immelt, it's Liz Claman. I want to continue on the questioning Mark was leading you on. There was a disturbing report about how fewer women are seeking out mammograms. Some of the imaging centers don't get reimbursed. Some women are lackadaisical about it. Either way, how is it affecting the business, if you see it at all, in that GE does do this significant work with digital mammography? Do you see the trend and is it going to be reflected in the boll com line?
Immelt: Liz, we see great growth in the digital mammography area. Image quality is superior to analog, so we've seen great growth in that area. But, you know, one of the things we talked about today was breast cancer. if you find it early, how much it increases the survivability rate. This is a classic case. I think it's about awareness. I think it's also about working out reimbursement rates because clearly this is one of the tests that improves patient care.
Liz: We have to ask you about a couple of corporate pieces of news that everybody wants to know about. Number one, and I’m sure a lot of people have talked to you about this already, the Rupert Murdoch News Corp. bid for Dow Jones. The question is does GE have any interest in jumping into the fray here and making a bid for Dow Jones?
Immelt: You know, Liz, I’d make two points. We have no interest at all. I view it that the newspaper business is a separate and distinct business from our core competency. It’s something that Fox and Rupert have a basis in. We have no basis in, so I would say we have no interest in that. The second point is, look, Rupert is a successful guy and I respect everything he does. But the third thing is that CNBC is a very valuable asset to GE and to NBC Universal. And we will absolutely feel great about our position, and we think that this is going to be a good growth business and almost doesn't matter to me what they do from a strategic standpoint. We believe in the long-term growth and health of CNBC.
Mark: Does that mean that you are not going to leave show business?
Mark: There's been a lot of speculation, as you know, an analyst wrote that GE should get rid of NBC Universal. Sounds to me like you are directly refuting that.
Immelt: Look, I think NBC Universal is in a very good cycle for us right now. It’s a good business and we run it well. What I’ve always said to you guys, what I’ve always said to investors is the second we think that an industry is not good for us, the second we think that somebody can run a business better than we do, we sell it. You know, mark, look, I’ve sold almost 40% -- the day I got this job -- 40% of the earnings have gone away. I’ve been pro investor, I’ve been aggressive with the portfolio. I think by the second half of this year we're going to be growing double digits at NBC Universal again. We have the Olympics, political elections in 2008. We have a great growth digital platform. And we think it's good business for us.
Mark: "Squawk on the Street." the list goes on and on.
Liz: Mr. Immelt, you say you're pro investor. The stock did jump markedly when that news came out about Citi recommending we sell NBC. The stock is up $37 a share. In the past couple of years, it's had a lot of trouble moving.
Immelt: You know, Liz, look, I think we've grown into our P/E. This was a 50 P/E stock five years ago. We trade at a slight premium. We’ve gone to 23 billion dollars of earnings. We’re in a time period of accelerating profit growth, expanding returns, expanding margin rates, lots of tailwind. Performance is what is going to speak loudest about the company. Now, look, I work for investors. I don't run the company to be any specific size. You know, we're always looking to see, can we create shareholder value to the portfolio and always will. So, you know, look, nothing is safe. Everybody in the company has to perform, including you guys.
Liz: We try every day, don't we? Nice to see you, Mr. Immelt. Thanks for joining us.
Immelt: Thank you, Liz.
Liz: Good luck at the health care conference. Jeff Immelt, chairman and CEO of GE.
*All references must be sourced to CNBC.