We Apologize For the Previous Apology

Monty Python, and John Cleese in particular, often bit the hand of their benefactor, the BBC, in their sketches. At the end of a rude sketch, they would then run a B&W written apology for the offensive sketch, gravely intoned by Cleese. Immediately afterwards, they would issue an apology for the previous apology, retracting some of the statements read by Cleese. It's a classic Python device, and I laugh every time.

However, the recent flap over GE CEO Jeff Imelt's comments at a Rome business meeting reminds me of the Monty Python bit. GE's PR department spokesperson first said that Imelt's comments were taken out of context, the evergreen apology phrase. Then, the spokesperson apologized for that apology and said that Imelt's views were not those of the company! Have some courage--he's the CEO, that's what he and other company leaders believe, and that's what the American Chamber of Commerce in China has been saying for years.

Here's the quote from the Financial Times, "I'm not sure that in the end they (the Chinese government) want any of us to win or any of us to be successful." The European Chamber of Commerce has echoed these sentiments, along with the American Chamber.

What's the problem, you say? The FT says that lots of companies are making money selling consumer products, like soft drinks. The problem is that GE is producing and selling engineered products like wind turbines and highly engineered systems like avionics, where the interests of GE and the Chinese state enterprises will eventually diverge.

The Chinese can easily mix sugar, water and caramel coloring to shut out foreign soft drinks, but they don't care enough about it to do so. They do care deeply about technology, about technology transfer and about being a global player and exporter, which is in line with their "beggar thy neighbor" trade and currency policies.

GE has been a model citizen in how they have approached the Chinese markets, and their actions are fodder for lots of business school case studies. However, the unfortunate truth is that the discounted present value calculations for some of their investments will have a shorter horizon and a lower terminal value than GE and other industrial conglomerates are used to seeing.

No amount of jawboning or complaining is going to change this. The question is: "How to live with the new reality?" There's nothing wrong with politely speaking one's mind and putting the cards on the table. No apology needed.