Obama Says He Is Confident of Turnaround, Meets CEOs
Jan. 28 (Bloomberg) -- President Barack Obama said he is confident that the economy can be reinvigorated, starting with the passage of a stimulus package, after meeting with the chief executive officers of some of the nation’s biggest companies.
“It was a sober meeting because these companies, and the workers they employ, are going through times more trying than any that we’ve seen in a long, long while,” Obama said at the White House today. Still, he said, “we left our meeting confident that we can turn our economy around.”
Obama is trying to push a stimulus package worth more than $800 billion through Congress to spur an economy that lost 2.6 million jobs last year. U.S. companies announced earlier this week they are cutting at least 77,000 jobs because of withering sales, including 20,000 at Caterpillar Inc.
Before making his remarks, Obama met with business executives including Eric Schmidt of Google Inc., Ronald Williams of health insurer Aetna Inc. and Sam Palmisano of International Business Machines Corp. The two events are part of Obama’s campaign to build support for his proposals to pull the U.S. out of recession. The House of Representatives is set to vote on stimulus legislation later today.
Palmisano and Honeywell International Inc. Chairman David M. Cote introduced Obama and praised the president’s plans to spend government dollars on energy and technology.
‘Dire’ Situation
“Economically, clearly, the situation is dire,” Cote said. “No company is immune.”
Honeywell, a Morris Township, New Jersey-based company that makes products including cockpit controls and air-conditioning equipment, is seeing demand dry up, Cote said. “There’s incredible fear about what’s going to happen next,” he said.
Cote and Palmisano said they had confidence in Obama, and Palmisano said the corporate leaders he has spoken to throughout the country are backing his plan.
“There’s a unanimous commitment to support the president,” said Palmisano, whose Armonk, New York-based company is the world’s top provider of computer services. “We all agree we need to reignite growth.”
Cote also joked as he introduced Obama, “Thank God you are not a timid man.”
Capitol Hill
The new president, a Democrat, traveled to Capitol Hill yesterday to lobby Republicans and address their concerns about the spending and tax cuts in the package as crafted by House Democrats. Today, he addressed some of those concerns.
“I know that there are some who are skeptical about the size and scale of this recovery plan,” Obama said. He promised to put controls in place on the spending provisions that would make his administration more accountable to Americans.
“All we can do, those of us here in Washington, is to help create a favorable climate in which workers can prosper, businesses can thrive, and our economy can grow,” Obama said. “And that is exactly what the recovery plan I’ve proposed is intended to do.”
The president, maintaining his courtship of Congress, will host Democratic and Republican leaders from the House and Senate tonight at the White House, White House press secretary Robert Gibbs said. The purpose of the gathering is to “establish a strong working relationship” with lawmakers, he said.
Market Reaction
Stock markets in the U.S., Europe and Asia rose in a global rally on news the U.S. may set up a so-called bad bank to absorb toxic investments. The Standard & Poor’s 500 Index yesterday marked its first three-day advance of the year.
Among those who were at the White House to listen to the president’s remarks was Richard Parsons, the former Time Warner Inc. chief executive, who was named by Citigroup Inc. to head its board of directors. Parsons was supposed to attend the earlier meeting, but his train to Washington was delayed because of the weather.
Today’s CEO meeting included David Barger from JetBlue Airways Corp., Gregory Brown from mobile phone maker Motorola Inc., Debra Lee from the entertainment company BET Holdings Inc., Anne Mulcahy from Xerox Corp, Antonio Perez from photography equipment maker Eastman Kodak Co., Wendell Weeks from the telecommunications components manufacturer Corning Inc. and John Bryson, the former CEO of energy provider Edison International.
Stimulus Benefits
In addition, Steve Appleton from Micron Technology Inc., the U.S. maker of computer-memory chips, and Michael Splinter from Applied Materials Inc., maker of solar-panel product equipment, attended the meeting. Both of their companies would gain from the stimulus package.
Also, bringing business interests into the lobbying effort for the stimulus plan helps with Obama’s sell to Congress and the American public, said Tom Gallagher, head of policy research at International Strategy and Investment Group in Washington.
“It looks like he wants a clear cross section of the business community to lobby for his economic package,” Gallagher said. “If you have business lobbying for it, that’s more tangible evidence that the plan will have a real impact on the economy.”
Splinter said short-term refundability of federal solar investment tax credits and new tax incentives to locate solar manufacturing facilities in the U.S. would enlarge the country’s renewable-technology manufacturing base.
Alternative Energy
Obama’s drive to reduce dependence on foreign oil “by harnessing the power of the sun can be realized through solar technology and products that we are innovating and manufacturing here in this country,” Splinter said in a statement. “This could create thousands of new jobs and ultimately change the global energy equation.”
Many of the executives who met with Obama today have cut jobs at their own companies. Perez undertook an overhaul at Rochester, New York-based Eastman Kodak that eliminated 28,000 jobs by the time it ended in 2007, and may have further shakeups.
Schaumburg, Illinois-based Motorola cut about 16,000 jobs since 2007, including 4,000 jobs this month. Corning, based in Corning, New York, said yesterday it will eliminate 3,500 positions after fourth-quarter profit dropped 65 percent.
To contact the reporters on this story: Julianna Goldman at the White House at jgoldman6@bloomberg.net Kristin Jensen in Washington at kjensen@bloomberg.net
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