Plan: Sell Nuclear Business to Comcast.

Discussion: GE’s legal position, as maker of the failed reactors, is exceptionally strong, based on long-standing immunities in Japanese and international law pertaining to builders of nuclear plants. Likewise, the outlook for the nuclear business, despite the Japanese setback, is currently excellent based on widespread concern about global warming.

Thinking outside the box, however, we believe therefore it is time for GE to exit the nuclear business. We apply the new operational discipline enunciated by CEO Immelt in late 2008. To quote the CEO: “Assume a black swan!”

First, liability. Whatever the law says, this accident will haunt us for a long time, perhaps expensively so. BP thought it was shielded by a U.S. law that strictly limited cleanup liability, and we all know what happened—BP was pressured to deliver up an extralegal settlement of $20 billion to politicians, no strings attached. Heed should also be paid to Japan’s relentless criminal pursuit of Mitsubishi Fuso executives, including the company’s president, over a truck accident that killed a single person. Management is certainly aware that we’ve been stymied in selling our latest reactor designs in India by a new local law that extends liability from plant operators to equipment suppliers (i.e., us) despite international agreements and precedents to the contrary. For that matter, remember the headache when GOPers in Congress wanted to put us (!) on the hook for any nuclear accidents in North Korea from reactors we would have sold as part of a Clinton plan to bribe Pyongyang to give up its atomic bomb program.

On Japanese blogs, wiseacres already are referring to our 1960s-era reactor design as the “third nuclear attack on Japan,” sniping that conveniently ignores our local partner, Hitachi. But this too poses a problem: Companies in Japan do not stand on their legal rights but follow the direction of politicians, who may find it useful to require Hitachi and other nuclear contractors to accept blame.*

Point Two concerns the future commercial prospects of the GE-Hitachi nuclear business. As you know, GE’s long-range forecasting unit (recently renamed the Office of Black Swan Awareness) recently concluded that public concern over global warming is exogenous, i.e., unrelated to any progress on scientific understanding of climate processes. What’s more, as measured in polls, public concern is indicated to decline in coming years on moderating global temperature trends and Al Gore’s divorce.

None of us at GE needs to be reminded that there is no natural “private” market for nuclear reactors. All our customers are governments, government-owned companies, or nominally private companies regulated by government. In the U.S., demand for reactors depends on the availability of federal loan guarantees and the Price-Anderson nuclear indemnity law (private insurance being unavailable for nuclear reactors).

Politics thus being the mother’s milk of the nuclear business, GE’s Institute of Ecomagination (aka our Washington lobbying shop) highlights a disturbing new correlation: Whenever President Obama endorses an energy option, disaster promptly ensues. His ringing support of expanded offshore drilling came just weeks before the BP oil spill. The Japanese reactor mess followed not long after he lauded nuclear energy as a weapon to fight global warming.

On the site Politico.com, George Mason University political scientist Jeremy Mayer recently opined: “I don’t think Obama’s cursed on energy policy, but this is a string of bad luck.”

We disagree. Though on the advice of PR we’ve stopped referring to it as the “Obama Black Swan Effect,” this powerful yet mysterious indicator is too important to ignore. Accordingly, this office recommends a new corporate strategy: Whatever Mr. Obama says, GE should do the opposite, starting with investing in coal-burning power-plants and health care reprivatization.

This, of course, would represent a 180-degree reversal of current GE strategy, informally known around headquarters as the “jump how high?” strategy. This office nevertheless believes the evidence warrants such a change in direction.