Thursday, September 24, 2009

Cisco CEO Optimistic About the Economy - Digits - WSJ

Cisco CEO Optimistic About the Economy - Digits - WSJ: "By Ben Worthen | Cisco Systems CEO John Chambers was one of the first tech executives to predict that the recession — then limited to the financial sector — would spread to the rest of the economy. Now he’s among the first to say it’s on the way back.

Helge: Are we going to see a V or W shaped recovery?

The economy has started a “gradual recovery,” Chambers said Wednesday during a meeting with Wall Street Journal reporters and editors, echoing optimism he expressed when discussing Cisco’s fourth-quarter results in August. Chambers said that he bases his assessment of the economy on several factors, including the stock market, conversations with customers and the rate at which Cisco receives orders. Based on these criteria, he believes that the U.S. is coming out of the recession. He added that Asia seems to be picking up as well, but that he expects Europe to lag behind.

Helge: What about Europe?

Chambers said he expects that the Obama administration’s stimulus package will help the recovery. It’s also had another effect: Tech companies like Cisco are investing in the areas the government is targeting, such as health care and upgrading the electricity network.

Helge: Health care! Are we ready to invest?

He didn’t agree with the government’s decision not to grant a tax holiday that would allow companies to repatriate cash from overseas. Cisco, which makes networking gear such as routers and switches, has approximately $29 billion overseas, he said. Now Cisco will be forced to spend more outside the U.S. than it would otherwise like.

In general, Chambers said that neither the government nor the private sector can turn the economy around on their own. “You’re not going to have a recovery without the government and business working together,” he said."

Helge: Governement and Business united!
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