UTC's global primer: George David has presided over a major international push. He says it's good for America

Chief Executive, The, Nov, 2004 by William J. Holstein

You also give stock awards?

We give a pretty good common stock award--$10,000 of UTC common stock. Again, the whole idea is that bad jobs are going out of America; good jobs are coming in. So, become an educated, high-value employee and become a capitalist with share ownership. Today, 7 percent of UTC is employee-owned.

Does your education program help people who get displaced?

They can get it for four years after job loss. To me, that's the way you respond to outsourcing pressures. You cannot and should not hold onto low wage work. Let it go. We don't want to do that work. We should build high value-added work. And you have to build the work force to make it happen. To do that, you have to educate the people. I think the obligation of any entity, whether it's a family, a country or a company, is to give employees the opportunity to improve themselves.

Critics would say that is all fine in theory, but the reality is that too many displaced people don't get reabsorbed into jobs. What can be done about that?

Here's one tiny specific thing. We had a problem with the Employee Scholar Program a few years ago, which is that our tuition reimbursements were being taxed as income to employees. The Internal Revenue Code would only allow tax-free tuition reimbursement when your field of study was closely allied to your principal work occupation. Since we don't have that limitation, it ended up that some of our employees were paying taxes on our tuition reimbursement. We lobbied with our government, and I think maybe that finally got changed to take that disconnect out. That's a good example. I think our government could do a lot more in terms of tuition lending and tuition-expense buydowns.

You seem to have some sense that you have a responsibility to your home country.

We do.

How do you describe that?

We could get very philosophical here. Most of the work of the world is organized in for-profit activities. Eighty percent--basically, all the non-government work in the entire world--is done by for-profit organizations. You make a profit because people pay you more than it costs you to do things. That's how big your profit is. The way you get that is by being very good at what you do. And being very good at what you do to me is much broader than simply current period cost versus previous period revenue. It's the investment in future products. It's the investment in the quality of the work force. It's the investment in environmentally compliant work. And you obviously have to be compliant with law and ethical standards.

Good organizations win in the world. They may not win in the next quarter or two--but in the long term they will win. The responsibility of management is to make good organizations. It is everything that we do, including support for local jurisdictions in which our plants and people operate. That's very philosophical, very abstract, but I think it's absolutely what makes a good organization.

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