Interesting Information.....:)
Many CEOs silent on prospect of Iraq war
By James Cox and Del Jones, USA TODAY
URL: usatoday.com.
There's a voice missing in the national debate about war with Iraq. It belongs to the CEO.
Top business leaders have been curiously mute about the U.S. drive to topple Iraqi dictator Saddam Hussein. Few, if any, chief executives have said publicly whether they think a U.S. attack is justified and wise, and whether it would help or hurt the economy.
There are plenty of reasons for CEOs to be AWOL on the subject. By voicing objections, a chief executive risks looking unpatriotic and could invite the wrath of the Bush administration. By citing economic concerns, he looks parochial and self-interested. By publicly supporting an assault, he faces a backlash if the war is protracted and U.S. casualties are heavy.
There's another reason. The barrage of corporate scandals has left chief executives "in a state of shock," says Jeffrey Garten, dean of Yale University's School of Management.
The silence emanating from the corner office is notable now because only two years ago, CEOs were being lionized, their input sought on everything from foreign affairs to education and welfare reform. That has all changed.
"It will be a very rare CEO right now who sticks his head up and opines on foreign policy," Garten says. "Anyone who calls attention to himself for anything other than improving the conduct, reputation and performance of his company is an easy target."
The Business Roundtable, a lobbying group of 150 big-company CEOs, declined to make any officers available to talk about prospects of a U.S.-Iraq war. Tom Donahue, CEO of the U.S. Chamber of Commerce, also declined to be interviewed. An official with the 14,000-member National Association of Manufacturers said his organization hadn't heard enough from its members to be able to say much.
The business people who are willing to stake out positions on the Iraq question tend to run small and midsize companies. And they are sharply divided about the need to go after Saddam.
Technology executive Eric Schmidt of Canal Winchester, Ohio, is a hawk. The CEO of iBeam Solutions says the United States should attack Iraq "immediately" because war benefits the country and the economy.
"There is too much uncertainty in the world because Osama bin Laden and Saddam Hussein are at large," he says. "Once these two are off the streets, people will feel more confident about the state of the world and their country."
Narayan Laksham, CEO of San Jose, Calif.-based eBots, which tracks goods through the supply chain, dreads the idea. He says eBots has finally managed to rebuild sales that fell sharply after the Sept. 11 attacks.
"I am worried that an Iraq situation will get us into the same spot again," Laksham says. "President Bush has too many balls in the air — unstable Afghanistan, al Qaeda, a sputtering economy, big-company accounting disasters and never-ending Middle East troubles. The juggling act might become unmanageable."
Such divergent views illustrate that "there is no consensus, either about the war or the impact on the economy," says Harris Miller, president of the Information Technology Association of America, a 500-member lobbying organization.
Miller says some tech-company bosses see Saddam as "such a terrible danger to the world that something must be done, or future generations will chastise us. ... Others believe he's very dangerous, but they think the case has simply not been made by the president and the administration that there's an immediate risk."
Lots of concerns
All the talk of war creates uncertainty, preventing the technology industry from climbing out of a hole that has information technology spending down 20% from 2000 levels. "Being jittery isn't usually a time when CEOs sit down and make positive decisions on IT spending," Miller says.
Corporate bosses big and small worry a fight in Iraq will cause a spike in oil prices, already up 50% since January. Saudi Arabia and other producers have signaled that they will loosen the taps to make up whatever short-term production is lost on world markets. But Saddam could send prices shooting to $40 or $50 a barrel if he was able to disrupt the flow of Saudi or Kuwaiti oil.
"High crude prices would certainly halt any world economic recovery, which (already) seems uncertain at best," concludes James Williams, publisher of the research newsletter Energy Economist.
Lawrence Lindsey, President Bush's chief economic adviser, stunned many this week when he said it could cost as much as $100 billion to $200 billion to rout Saddam, vs. $58 billion for the 1990-91 Gulf War and $10 billion for the Afghan war.
Lindsey, head of the White House's National Economic Council, told The Wall Street Journal that a war to oust Saddam would neither push the country into recession nor boost the economy.
"Whatever it is that's finally decided to be done, we will succeed, and we can afford it," Treasury chief Paul O'Neill said this week.
But once the shooting starts, consumers are certain to be rattled, many believe.
And that could be dangerous: Consumer spending accounts for two-thirds of economic activity.
With business investment falling, consumers powered the economy out of recession by taking advantage of cheap mortgages and zero-percent car loans. If consumers pull back, they could doom any hopes for a turnaround in hard-hit industries such as air travel, hotels, advertising and telecom, and damage healthy sectors such as real estate and autos.
The economy is too fragile to withstand another shock, says Jim Evans, whose company owns two Gold's Gyms in San Diego. "A war with Iraq would trigger a recession," he says. He frets that his customers would "perceive our services as a luxury" if fighting causes consumers to start scrutinizing their spending.
Corporate bosses aren't deaf to the war drums, but they have other worries, too. In February 2001, about 150 CEOs ranked conflict in the Middle East as sixth among the factors that would influence their decisions to invest around the world, according to a survey by management consultants A.T. Kearney. Earlier this month, they listed the Middle East as their No. 4 concern, after U.S. economic recovery, free-trade initiatives and Japan's recession.
No sure thing
Most CEOs see too many variables in an attack on Baghdad to feel comfortable speaking out about the wisdom of an assault, says Paul Laudicina, the A.T. Kearney vice president who conducts the survey of corporate bosses.
"Even if you ask the best strategists in the military community what's the likely length of the campaign, the casualties, the geopolitical factors, most don't know," he says. "The reason (business) people aren't willing to stand up and say their mind is that most aren't very well informed about what would happen."
After Bush's speech to the United Nations last week, USA TODAY sampled opinion among a handful of people who own or run small and midsize businesses around the country.
Seventeen of the 29 said the U.S. should get a go-ahead from the U.N. before attacking Iraq; seven said the U.S. could launch an attack without U.N. approval; five said the administration should not go to war with Saddam Hussein.
More than half — 16 — said a war would delay a U.S. economic recovery or tip the country back into recession. Nine felt war could speed up an economic turnaround.
Bob Meeker, president of Preferred Communications, a Creedmoor, N.C., company that sells emergency equipment to the military, is convinced that an attack on Iraq is the right thing for the country and the economy. "The world is a different place since 9/11, and the U.S. is now in a more powerful position to alter world politics — hopefully with wisdom," he says.
Others say the U.S. lacks the moral authority to go on the offensive against Baghdad.
"Many of us are old enough to remember the Vietnam debacle, and we don't want to see it happen again," says Sue Quambusch, president of A to Z printing company in Lincoln, Neb.
Adds Alvin Dziurzynski, president of Access Systems, a Knoxville, Tenn., financial consulting firm: "It's a close line between world leader and world bully. Think about it: What if some other nation tried to dictate what weapons we could have?" |
