Top American CEOs About Job Creation: Not Happening Here

Wolf Richter's picture

Wolf Richter

CEOs of the largest American corporations, without aiming at it, shot barn-door-size holes through the rosy jobs picture. Rosy on the surface: unemployment down to 7.7% with 236,000 new jobs created last month. A picture the White House held up as proof of its success. But these CEOs didn’t see it. Not in the US. Though prospects were rosy in low-wage countries.

Last week it was Honeywell CEO David Cote who said that they’d been cutting headcount through attrition, instead of adding to it, at the rate of hiring only two to three people as four or five leave. He expected hiring to slow even more, based on economic uncertainty in the US.

Economic uncertainty! A term that’s now showing up frequently. But one of the things the company didn’t appear to fret about? The Sequester. With the government portion of total revenues being about 11%, the company expected only a minor dent from it in 2013. The problems were elsewhere. As a conglomerate and Fortune 100 company active in a wide variety of industries, Honeywell sees first-hand what’s going on.

“We’ve become more concerned recently,” Cote said. “If we want employment to grow, we have to have GDP growing more like 3%, not 2% or less.” Though growth had stalled altogether last quarter, Cote hasn’t given up hope for growth this year, expecting 1.9%. Yet even 3% growth might not do much for hiring—because Honeywell has been adding plenty of jobs overseas while cutting them in the US. As the Wall Street Journal reported:

Since 2009, Honeywell, which gets 46% of its sales from business in the US, has added 10,000 jobs globally, boosting its employee count to 132,000, while eliminating 2,000 positions in the U.S. Last year, Honeywell trimmed its US workforce by 1,000 jobs to 52,000 employees.

It’s a point of pride: “We have 1,000 less people in finance than we did when I arrived in June of 2003,” Honeywell CFO David Anderson explained. And it even cut executives, 580 down from 600. Trimming in the US, hiring overseas.

Honeywell isn’t the only one. But other companies are actually adding jobs in the US. The net effect is a dreary reality, best depicted by the employment-population ratio, one of the least statistically mucked-up employment metrics. It measures total jobs against the population of age 16 and older. It peaked in April 2000 at 64.7%, then trended down, collapsed during the financial crisis—and hasn’t recovered since! In February 2009, it was 60.3%. A year later, it was 58.5%. In 2011, it was 58.4%. In 2012, 58.6%. In Friday’s report for February 2013? 58.6%. Clearly, jobs have been created, but only at the rate that the working-age population has grown.

Honeywell spelled out the reasons: growth industries—and they do exist—were balanced out by corporate efforts to shave headcount and cut costs. That process is likely to continue. Because it shows up nicely on the bottom line. Honeywell has been able to increase its profit margin every year since the depth of the financial crisis and expects to make more progress in that direction. And for growth, it will focus more on the Middle East and China.

Then an even bigger player chimed in Monday: General Electric, mega-conglomerate of superlative proportions with products ranging from locomotives and jet engines to light bulbs and medical equipment, with a massive finance division that had been bailed out during the financial crisis, and with a phenomenal sense of what’s going on in the economy.

“The US faces more major ‘political storms’ this year,” wrote CEO Jeff Immelt in his letter to shareholders: “the fiscal situation, repeated debt-limit controversy and tax reform. We fear that this uncertainty will impact capital investment.” Again that word, uncertainty. Attached to the word fear.

A direct jab at the theatrics in Congress and the White House about the Fiscal Cliff and the Sequester. Or the debt ceiling fight, the silliest of all controversies that has been causing people around the world to scratch their heads for two years, wondering how Congress could be insane enough to block the government from borrowing the very money that Congress told it to spend and borrow.

Immelt wasn’t just talking about GE. He was talking about American businesses in general—and how they were reacting to this uncertainty. While housing and the consumer were improving, he wrote, “capital investment remains sluggish.” Result: the “weakest recovery since the 1930s.”

But capital investment, a powerful driver of job creation, did happen. Massively so. Overseas. So GE was confident in its growth, he said, not because of anything exciting going on in the US, but because of its activities in the developing world, particularly Africa, the Middle East, and China where GE has become a big investor. As long as that trend persists, as long as Corporate America plows its money into investments overseas to create jobs there, the job market in the US will remain a dreary affair.

A darker shadow still: megabanks and their bankers have been able to dodge serious punishment for crimes they’d been committing for years because they’re now officially too-big-too-jail. But there’s a deeper problem. Read.... The Self-Emasculated Regulators Of Megabanks

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neutrinoman's picture

It's hard to see where these fantastic numbers are coming from, except through warped methodologies and deliberate fakery. The touted NFP are highly distorted by seasonal adjustments. The household survey and tax receipts are more consistent with 90-150K per month of jobs. The UI claims numbers are warped by certain jurisdictions just not reporting.

Since most job growth comes from small businesses, and the rest from medium-sized businesses, and these are highly cautious -- again, where are the jobs coming from? The numbers do share a sharp rise in temps and part-timers, which is part of the explanation.

AmCockerSpaniel's picture

Jobs are not made. Jobs are a fixed number. It just takes so many people to do a job. The real question is were can we get those people for the least amount of money. If too many cars are made for a fixed number of buyers, it's a money losing process. Free trade just moved the jobs over seas to save money. Want jobs..... Well; Work for less. Or you can increase the number of buyers.

willwork4food's picture

Umm...can I go to the bathroom please?

rhinoblitzing's picture

Hiring Robots and Illegal Immigrants recently released from jail - Impeach Obama Now!

ejmoosa's picture

The rate of annualized corporate profit growth has fallen below the level needed to generate job growth.  This is not new.  It happens every time.

Less than 56 of 100 companies are making more money than they did one year ago.  That means 44 are reducing their expenses to return to higher profits.  This is not new.  It happens every time.


Why do so many spend so much time trying to explain what is simple.  Businesses are in business to generate profits at the bottom line. When profits are under pressure. businesses right-size until they once again can show real year over year profit growth.

Only then will they expand their employment ranks.



hooligan2009's picture

nu uh...because american companies would rather hoard 1.3 trillion in cash and invest three times this much expanding overseas..

they dont pay taxes here...great for shareholders and simply park it overseas, and refuse to employ it s capital..

the fuck up in the american corporate culture is mammoth..shooting itself in the foot whilst paying seven figure salaries to managment and seven figures sums to tax accountants and firms.

criminal it is...

orez65's picture

Because most American brains have been brainwashed, by Liberals, to believe that making a profit is evil.

tickhound's picture

Many corporations would agree.  Dumping waste in rivers, streams, and oceans is profitable.  You should lobby and help save them from all the scary people.

Or you can just do your part by throwing this rock through that window.  I won't get in your way.  I doubt anyone will.  Not even the liberals.

Some advice... "If you can't spot the fish at the poker table, then it's you."

GCT's picture

Your not suppose to make sense anymore EJ dammit.  Hell I have pointed this out for over a year now and I'm just a small business owner.  The crunch is felt quickly when your a small fry. Yes it is indeed uncertainty about whatever the fricking government will do to us next that curtail long term planning when you do not run off shore and want to keep good people you have working for you.  We take less to keep the dam good people we have left! 

Fucking GE CEO the big job creator for the Obama team sent his Xray division overseas last year to be made.  Gotta love the head of job creation in this country.  What a fucking farce!

willwork4food's picture

Thanks for the enlightend lecture. You might want to go on tour.

As others have said, the problem is not the profit to employment ratio, every person with half a brain knows a company needs to make a profit or they can't hire workers.

The problem is CORPORATE GREED: They shell out their US work force to a bare minimim, pay them bare minimum, pay US taxes at bare minimums and the executives get MILLIONS for their "high pressure work" to assure stockholder value while they're secretly cashing out their options, having reverse splits, excluding dividends or posting an operations expense report for the company Lear they just bought.

Fuck them.

thewayitis's picture

   And thats a very GOOD reason for the people to revolt by one way like:  Don't buy any STUFF or THINGS we REALLY don't need.  Like WILLWOR4FOOD said "fuck them"  ...

lotsoffun's picture

and in agreeing with the wayitis.  so i'm jamie dimon and i make 35 million a year.

so i'm smarter than you.

so you have apples in your tree and i take them and you can't prove it.

it's about corporations learning to see themselves as human entities and neighbors and responsible human beings

rather than simply profit centers.  of course they have to make a profit.  but at what expense and via what machinations?

all that has happened that currently the pirates have shifted from physical rape and plunder to financial, and the victims

didn't know that they could win if they fight back.


crosey's picture

Since most job growth typically comes from small businesses, please factor out the corporate greed idiom.  For most small business owners around me, greed is a warped luxury they rarely, if ever, see.

cynicalskeptic's picture

SO why arfe all the tax incentives, bail outs and gov 'help' going to big business?    Small business is DYING from the freeze on lending, increased government regulation and taxation.

q99x2's picture

I go to a lot of AA meetings and there have been more shares from people that are being layed off this last week than I've ever heard before. This is in Southern California.

Tombstone's picture

Does this mean Benny's gonna stop funding bonuses for bogus bankers?

madcows's picture

Well, how else are they going to afford their lamborghini's if they can't just keep slashing staff.  The only growth is from making less people do more w/o giving raises. 

tony bonn's picture

complaints of economic uncertainty are nazi speak for leaving the status quo untouched and for increased fascist control of the economy, making the world safe for nazism - a refuge for crony capitalists - whores of mammon...

corporations are going to hold their breaths on hiring until they get their nazi ways....

steve from virginia's picture



The CEOs are whining about the world not being flat and water not flowing uphill. The claim the world is flatter elsewhere and rain falls from the ground into the clear blue sky ... in the Middle East.


I guess that's where the oil is ... Sell that oil, buy that locomotive and add a Honeywell thermostat to keep up appearances. In the 'Good Old Days' every American home had both GE locomotives and light bulbs in the garage and a Honeywell thermostat in every room, fairy tales had happy endings and the world was flat ...


The corporate tycoons believe the world might be flat again if the pesky government was 'reformed' to iron out uncertainty, which would occur if more 'flat-Earth' reformers were put into positions of power. Good, honest statesmen like ... that congressman who was busted for fondling (butt-fucking) male pages in the bathrooms before going to church.


A few more like him and everything would be fine!


It's not ironic that the same GE Immelt was a government administrator not that long ago ... maybe he didn't fuck pages, but he had the right idea; government and business teaming up to fuck ordinary Americans over.


It's past time for all of these people to 'go Galt' or get pushed head-first into wood chippers. Corporations should be reconfigured ... those that aren't broken up and executives prosecuted, that is.


The US will do just fine with other, smaller companies making locomotives and thermostats, companies that pay at least part of their own way. No payee taxes in US no doee business in same US. Take that GE/Honeywell and shove it up your page-pole.

Nick Jihad's picture

@Steve,  The site you are looking for is

azzhatter's picture

Immelt can barely run GE yet he is somehow an expert on everyone else? What a piece of shit this hypocritical cocksucker is.

DOT's picture

Steve, Tried using Google Translate on your screed- still didn't make sense.

Kreditanstalt's picture

Sure, capital ivestment is happening overseas.  Well and good, but where is the demand for the products these companies manufacture coming from???

From the west?  If so, that is directly dependent on the continuation of cheap money.

Cheap money is the root of all problems.

besnook's picture

some of the demand is coming from the west but the ramp up in demand is coming from china. japan, for instance does three times the business with china than it does with the usa. china still has to engage another 800 million people into their economy. the 500 million already engaged love to buy shit more than anyone from long island ever thought they could buy. even if you believe the cia analysis that purchasing power parity gives china a 11 trillion dollar economy there are still three usa size populations to grow.

cheap money is not the root of all problems. cheap money is the eve of destruction. cheap money was the solution to bad math outcomes, self imposed bad math outcomes. just like japan, the usa is trapped in a conundrum of it's own making. the only solution now is a choice of the means of suicide.

NotApplicable's picture

Demand? Wait, you mean to tell me that capex needs to be demand driven?

Welcome to the "Field of Dreams" economy, where demand is merely an afterthought.

besnook's picture

the fact is the usa, japan and europe are post growth mature economies. there is little room for growth and the growth that may be possible is way too expensive to be economical. the last great thing the usa did was the fiber optic buildout. the usa is still far behind in internet speed and urban wireless coverage compared to the most modern cities. in any case, there aren't enough jobs to matter in that endeavor. so, of course, the companies like honeywell and ge are looking for where the growth is. interesting that there was no mention of south america or asia, ex china, or india. the future is not the west. the west has run it's course. from the rennaissance to mosh pits and gangster rap leading to the rise of the greatest western empire in the history of the world all of it is about to collapse in a dubstep mash up because saving the banks was more important than saving the people.


the only uncertainty these companies are worried about is the timing of the collapse and whether they are hedged to weather it. do you really think ge will come to the aid of the usa if most of their income comes from other countries?

orez65's picture

It' has nothing to do with "post growth mature economies".

The problem is FRAUD.

Fiat money is FRAUD.

Stop the fraud and the economy will get better.

besnook's picture

actually, it is about post growth mature economies. fraud just accelerated and exacerbated the end game in an attempt to end run the inevitable, the minsky moment. without the financialization and ensuing fraud the economy could have collapsed as it should have in 1987 and the usa would be on a normal growth curve but the extension of the problems for another 20 years almost ensures a wild ride back to equilibrium. the fact remains that only a massive capacity destruction event will cure the world wide financial ills now.

Unique Snowflake's picture

Only due to bloated gov and massive debt. "Growth" through innovation and co-operation is and always will be possible in any society that keeps control of it's fucking overlords and has sound money. The conversation needs to be about society, not focused entirely on money(economy).

GoldMInerJoe's picture


Everything you just said is fancy pants MBA blabbering in an Ivory Tower Disco with no cocaine or bitches. The USA,Euro and to a lesser degree Jap economies you call post growth, are hardly such in an Adam Smith realized reality where innovation and quality of the experience we call human life is the ultimate and infinite currency of  the market place. I'd point you to the fact that what got turned on during war-time 1940's USA has never been turned off. The allocation of tech and the by products of, has been pooled and kept out of the market places of referenced economies. To serve an End Game application of serfdom we all can speculate about over a jug of shine and a bowl of Kine and still not comprehend. Economies are people trading calories in some form. Period. End of metric. Anything beyond that is Corp-Speak, to which you just showed your well versed in. A false reality created by legal fictions acting under the protection of a .300winmag aimed at the ball-sacks of previous said economies.


Of course what the hell do I know? I'm phucked enough to think digging metal out of the ground and trading it for paper is a really bad trade made by pussies who cant build there own market of exchange.








Son of Loki's picture
Google begins another round of layoffs at Motorola Mobility

The smartphone division and patent trove plans to lay off 1,200 employees, about 10 percent of its work force.

Haus-Targaryen's picture

Horrible news?  Prepare for the DOW to go through the roof tomorrow. 

wonderatitall's picture

obamas 1% along with his welfare mommies are jumping for joy. no jobs and fat profits. bring on the obama revolt, they need a new lamborgini.

IamtheREALmario's picture

If the CEOs are serious about job creation then there are a couple of actions they can take.

1. Stop trying to create monopolies through non-value adding acquistion and by lobbying and regulating small competition out of existence. Encourage competition, even independent and uncontrolled competition.

2. Break up the crony networks that have created the class of parasites that think they are God's gift to humanity because they feed on themselves and heap awards (including cash) upon themselves. Rejoin the human race and understand that you can have an important role in creation, instead of just greed and ego enhancement. Just because other people tell you you are great, it does not mean it is true or that they really believe it. Be realistic.

3. Stop using labor arbitrage as the means to enhance profits. Build the structure of the system to be able to handle the people that the world holds. Do not give up on yourselves as not comepetent enough to manage through a world full of people.

The world cannot progress through either Machiavelli or Marx. Find the new paradigm.

orez65's picture

Please, too complicated and it won't work.

All we need is:

1. Real money - gold and silver

2. Make "fractional reserve banking" illegal, under penalty of death

You don't need the Federal Reserve, you close it down. President Andrew Jackson did, in 1836, but he didn't put a stake through its heart and it resuscitated in 1913.

The price of money, interest rate, gets set by the market.


Carl Spackler's picture

It is NOT the charge of a private business manager (e.g., a CEO) to create employment opportunities.

The business manager's job is sustainable value creation by selectively placing capital AT RISK, which is a mix of return on invested capital, sustainability as a going concern, and business growth (whether measured via total revenues, the balance sheet or both).

In the course of carrying out their duty of sustainable value creation, the business manager may require labor to combine with capital to deliver output.  In such cases, employment opportunities may arise for other human resources in the economy.

Then again, they may not require human labor because automation is more effective and efficient at completing the necessary task(s) in the value-add chain.

Labor opportunity (or "jobs" for the cognitively challenged) is a byproduct of selectively placing capital at risk.  It is NOT and has never been the endgame (for all you government and communist fools out there).


Elliott Eldrich's picture

Funny thing: The more we've embraced "free trade" the more we've seen jobs disappear. Sort of like when you keep sipping from a bottle of poison and end up getting sicker and sicker. Maybe we need to put the bottle of "free trade" poison down and do something constructive like bringing back tariffs? Just a thought.

Naaaaaaah. Never happen. We'll just keep swilling and swilling that poison because the CEO's make money selling it to us...

Haus-Targaryen's picture

There are multiple problems with your thesis.


1. CEOs have a fiduciary duty to their shareholders to increase corporate value.  The CEOs can be sued, fired, and even put in jail for breaching said duty.  They have no duty to the entrepreneur who is trying to set up shop. 


2. I assume you were referring to executives (which is stupid) but the same applies to welfare recipients.


3. Labor 9 times out of 10 is the largest line item expenditure of any corporate entity.  When profits become losses and costs have to be trimmed, this has to be one of the first things to get the axe.


Take your neo-liberalisim and shove it.

ebworthen's picture


Haus Targaryen:

  1. You said "Fiduciary duty"  ROFLMAO!
  2. Top 3 for 2012 CEO pay: $131 million, $66 million, $64 million.  See #1.
  3. "When profits become losses..."  See #2.

Entrepreneurship and capitalism are fine, but what we have in the U.S. is obscene crony capitalism.

U.S. Corporations are allergic to career employment, and addicted to low-hours, low-pay people churn.

Back in the day, people and companies made a commitment to each other; now it is a one-night stand.

CEO Pay source:

MethodMan's picture

Although I would agree 90%, remember that the corporation is an entity enabled by the state. If the legal form no longer serves the will of the people and the general welfare of the nation, then it can be so limited or even eliminated by the same laws. Want 100% freedom? Let all big businesses be partnerships and proprietorships and everyone have 100% liability for what they do. Otherwise, the corporate form must ultimately serve to better the socioeconomic situation as whole. If not....

orez65's picture

"The will of the people ... the general welfare?!

A corporation offers a service or product to the market.

You want it you buy it.

If there is no market for your service or product you go out of business.

If there is a market and you can make a profit you stay in business.

That's it.

I do agree with your liability angle.

Nick Jihad's picture

So, stated briefly, "the workers must control the means of production!"  Have I got that right?

orez65's picture


You want to control the means of production then put your capital at risk.

NotApplicable's picture

What's this silliness about "economic uncertainty?"

There should be little doubt as to what the future holds, as there's only one path left.

Pain. Lots and lots of pain. Along with more legalized crime.

As for the thread going on above me, all points are moot, as once the currency has been undermined, there is no other form of survival in a rigged market. Only in an era of sound currencies can sound business emerge.

Trust is the absolute bedrock of society. Destroy it, and society goes right out the window.

steve from virginia's picture



Ha hahaha!


You get down to sound currency and sound business, what's left? There won't be much of either, I'm afraid.


The sound of one hand clapping. I like the idea though, sound money and honest business there would at least be two bits of honesty in this bowderized world.

Ying-Yang's picture

Well if it is not happening here..........

NASA will hold a news conference at 10 a.m. PDT (1 p.m. EDT), Tuesday, March 12, to discuss the Curiosity rover's analysis of the first sample of rock powder ever collected on Mars.


Just what "powder" did your tax dollars find?