Corporate Titans Clash On Economy's Health
A group of top executives stopped by The Post's editorial page today to discuss a proposal for climate change legislation and The Post's Steve Mufson polled them on the health of the economy.
“I actually think the government programs on the capital market have started to work,” said General Electric chief executive Jeffrey R. Immelt. “It is slowly getting better. The trick of what the government is trying to do is to get credit flowing to head off the bow wave of bad economic numbers. I do think the credit markets are starting to unclog.”
Immelt also said that he expects that government stimulus spending overseas will have a positive impact.
“Governments around the world had lots of foreign reserves . . . and they’re going to spend it,” he said. “We’re going to see stimulus spending in every corner of the world.”
It's worth noting that in September, Immelt's GE got a $3 billion cash infusion from World's Richest Man Warren E. Buffett (lead director of The Washington Post Co.), who got a sweet deal on GE stock in return.
And last week, GE's financing arm launched a $10 billion sale of FDIC-backed debt.
So, sure. Things are looking pretty good from Immelt's point of view.
But Duke Energy chief executive James E. Rogers was understandably more cautious.
“We are in uncharted waters in credit markets,” he said. "Since the early 1980s we have seen the globalization of capital markets. This is the first real hiccup and there are huge unanswered questions.”
Rogers said that Duke Energy, one of the biggest electric utilities in the country, saw electricity use drop last year compared to 2007 and expects another decline this year.
He said the company had never seen two consecutive annual declines in electricity usage and had only seen one-year drops in the Midwest during the Rust Belt crisis of the early 1980s and in the Carolinas around 2000, when textile businesses lost out to foreign competitors.
“If we ever needed to know whether the world is connected supply-chain-wise and information-wise, we have answered that question,” said DuPont chairman Charles Holliday. “We do a lot of models at DuPont, but we don’t have a model for this.”
Holliday said DuPont has cut its capital spending plans for 2009 by about 20 percent, with the biggest cuts in areas that serve the automobile and housing industries.
January 14, 2009; 6:38 PM ET
Categories: The Ticker | Tags: DuPont, Duke Electric, GE, Immelt, economy, stimulus plan
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