Last Sunday, the NYT Sunday Business section published a Pulitzer-worthy classic on its cover -- David Segal's epic, brilliant journey into the madness and manipulations of Vitaly Borker and his DecorMyEyes website scam.
But this week -- to borrow the language of the virtual GE press release it published as a cover story today -- it's "back to basics" for a NYT section more notable for its flackery than its scoops. Too often, its columns promote products, its interviews push personalities, and its cover stories depend more on exclusive access than investigative muscle.
That's the story behind this week's wet kiss. In 3,690 words, longtime NYT business reporter Steve Lohr manages to reward one of America's most battered corporations, GE, with the chance to resurrect itself -- simply, it seems, as payback for the chance to interview Jeffrey Immelt, its struggling CEO.
As anyone who follows the business world knows, GE took a major beating in the 2008 economic meltdown, having pinned its future on its GE Capital financial services unit. That resource fell apart in 2008, as the credit crisis left GE reeling.
Suddenly, a company that once seemed a bedrock of American capitalism and success appeared to be on the ropes -- so much so that the NYT's own best business columnist, Joe Nocera, had to take to print to assure readers last year that GE would survive.
After laying out its litany of huge missteps, Nocera declared in a March 2009 column: "Can you see now why investors no longer feel they can trust General Electric?" Nocera insisted that the company needed to "open the kimono and disclose its assets and how it values them."
But now, 18 months later, Lohr has fallen prey to that classic corporate gambit -- access to the CEO for an "exclusive" interview, and a guided tour of exactly what the company wants the public to see, and nothing else.
Beyond that, Lohr excluded from his epic piece the most recent -- and damaging -- public-relations blow to the company's reputation: Thursday's revelation that GE borrowed $16 billion from the Federal Reserve in the fall of 2008, well before anyone realized the depth of troubles with the company's credit.
And as if to underscore Lohr's omission, today's "Fair Game" column by NYT Pulitzer Prize winner Gretchen Morgenson, "So That's Where The Money Went" -- on the same Sunday Business front page -- purports to look at the recipients of the Fed's loans, yet also leaves GE off the list of lucky borrowers. Instead, she puts her spotlight on the usual suspects like Citigroup, Morgan Stanley, and Merrill Lynch.
There has been no mention of GE's access to billions in bailout funds anywhere else in the NYT this week, for that matter. A Thursday page-one story by Sewell Chan and Jo Craven McGinty didn't disclose the GE billions, either.
It was reported, instead, by former NYT investigative reporter Jeff Gerth on the ProPublica website -- Gerth noting that GE took the bailout billions "even as the blue-ribbon company enjoyed the highest credit rating available at the time."
Why no update of Lohr's story to include this relevant information? The answer is simple: it would have gone against his thesis, which, to paraphrase George Santayana, is that those who forget the past are...better off.
Instead, Lohr engages in some of the most egregious examples of corporate flackery to have turned up in the NYT's pages in a long time.
Here are just a few examples of language Lohr uses to cast GE and its CEO, Jeffrey Immelt, in a positive light, presumably part of the transaction for managed access that accounts for the interview, Lohr's visit to a GE factory, and five giant photos portraying Immelt and his workers as hopeful, endearing folk emerging from a financial mess not of their making.
The story quotes Immelt at epic length, frequently without qualification or question, and often permitting him to lapse into coporate doublespeak with references to things like "aspirational" goals. When Immelt acknowledges the company's colossal errors under his leadership, Lohr says he does so "candidly." All but three people quoted in the story are friends, present or former employees of GE -- including factory workers who offered their we-love-GE soundbites with all the candor of a worker being watched by the PR machine that arranged the interviews.
A sampler, beginning with Lohr's saccharine summary of Immelt's broad strategy to return GE to dominance:
Having skirted disaster, G.E. is recovering gradually these days. Its finance unit is on the mend, with the size of its debts and troubled loans trending downward. Mind you, middling recoveries are a relative matter at G.E. After all, the company remains a colossus on track to deliver profits of more than $10 billion on sales of about $150 billion this year. But investors are used to getting more from G.E., which earned $22 billion on revenue of $173 billion in 2007. So G.E. has revamped its strategy in the wake of the financial crisis. Its heritage of industrial innovation reaches back to Thomas Edison and the incandescent light bulb, and with that legacy in mind, G.E. is going back to basics.
Then a few words of sympathy for the beleaguered CEO:
Mr. Immelt and his advisers had plenty of company in missing the gathering storm...
Mr. Immelt is backing his words with actions...
On to Immelt's strategy, and how well it's already working:
About 1,000 miles from corporate headquarters, inside a gleaming new plant that is the result of a $100 million, three-year investment, G.E.’s back-to-basics strategy is on display....It is an industrial symphony of materials science, high-tech machinery and hand craftsmanship.
Next, a few positive quotes from people whose paychecks Immelt signs:
Audra Harris, 36, left a job as a machine operator at a commercial roofing manufacturer to come to the G.E. plant. In her first months, Ms. Harris says she initially found the team approach “very challenging,” but adapted quickly. "Here you get to make a lot of decisions," she says....
Steve Lentz, 55, who had worked in a printing factory and a bottling factory before joining G.E, says the large investment in a high-tech facility proved that the company had a long-term commitment. "I figured I could wrap up my career here,” he says. “At other places, you don’t know when the shoe will drop."....
Back to Immelt, who thinks GE's doing a pretty good job, if he says so himself:
Being nuanced in foreign markets, [Immelt] says, is a skill that "I think we’re pretty good at."....
“It’s about using the scale of G.E., the majesty of the company, to drive growth and change,” [Immelt] says...
More GE employees weigh in with praise for the boss:
Mr. Immelt, according to Beth Comstock, senior vice president and chief marketing officer at G.E., is constantly scouting for opportunity. “He says, ‘Hey, I think there’s something here,’ ” Ms. Comstock says. “Let’s see what we can do.” When he gets excited, teams are dispatched to assess markets, products and research and technology trends, typically in a few weeks or less...
But wait! Apparently, sometimes Immelt has to make a tough decision or two:
Occasionally, Mr. Immelt just issues an order. After a trip to Brazil in January, he became convinced that the country was rapidly advancing in technology and that G.E. should place a research lab there. When he returned to the United States, he told Mr. Little, as Mr. Immelt recalls, “Hey dude, you’re going to put a global research center in Brazil. Pick a good place.” Last month, G.E. announced it would build a research center in Rio de Janeiro....
Leadership by fiat when done in moderation, Mr. Immelt says, can drive change and set a course. “I think that if you run a big company, you’ve got to four or five times a year, just say, ‘Hey team, look, here’s where we’re going,’ ” he says. “If you do it 10 times, nobody wants to work for you. If you do it zero times, you have anarchy....
Things are going to turn out pretty well for GE. Maybe. Assuming this happens and that happens and something else happens, that is:
The near-term prospects for G.E.’s stock seem to depend, if not on financial engineering, then at least on financial moves that might lift the dividend back toward its pre-crisis levels. The sale to Comcast could bring $8 billion in cash. And negotiating with Mr. Buffett to buy back his $3 billion in preferred stock, which pays a 10 percent dividend, could free up $300 million in yearly fees. Those steps could clear the way to raising the dividend and making the stock fetching again for investors...
In the end, Immelt thinks it's all going work out just fine for GE:
For his part, Mr. Immelt is an optimist. “We’re going to be one of the companies that comes out of the crisis stronger than we went in,” he says. “I think that is something that is ultimately going to be good for employees and investors.”
Fortunately for Immelt, Steve Lohr seems to think so, too.