All,
Interview with Loral's chairman Bernard Schwartz in MoneyLine with Lou Dobbs,
Coming up next here, one of the country's most respected business leaders. He built up a defense powerhouse at Loral, and now he's in a race to build the first global communications network, and his track record suggests he's got a very good shot of doing very, very well. My guest is Bernard Schwartz next. Stay with us.
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DOBBS: A Delta 2 rocket, carrying Globalstar Telecommunications's first communication satellites, is set to launch tomorrow morning from Cape Canaveral. The rocket was supposed to lift off today, but the launch was delayed because of high winds. Globalstar aims to provide global cellular telephone service, among other things, by late this year. The company is still trying to catch up to rival Iridium in the corporate space race. Iridium has already deployed 46 satellites. Only five to go. Loral has several dozen. Those scheduled for later this year.
Joining me now from Washington, D.C. is the man behind Globalstar, Loral's chairman, Loral space chairman and CEO, Bernard Schwartz. Bernard good to have you with us.
BERNARD SCHWARTZ, CHAIRMAN & CEO, LORAL SPACE & COMMUNICATIONS: Thank you Lou. Nice to be here.
DOBBS: I know you've endured this many times. You're quite used to the delay. Not frustrating at all to experience another one today?
SCHWARTZ: Oh it's frustrating indeed. The whole team is ready. We've done everything that we should do. I have to say that it's been an 8-year trek, an odyssey that's been very fulfilling. But the real experience is getting that satellite up and we hope to be able to do that tomorrow morning. The only thing that will stop us now I think is weather and we just have to clean up the weather in Florida to do that.
DOBBS: All of these millions and millions, hundreds of millions of dollars in investment the latest in technology and mother nature still has much to say about these things.
SCHWARTZ: Indeed yes, by the way, it's about $2 1/2 billion so...
DOBBS: I can keep broading (ph) these up. $2 1/2 billion. You're in competition with others, spending like sums and in some cases even more. You have a lower price structure in terms of what you will be marketing. How confident are you of your ability to prevail in this marketplace and why?
SCHWARTZ: The market is there, Lou. There are 3 1/2 billion people in the world that has never used a telephone and they need to do so in order to get into the 21st century. Digitalization has made communication the number one infrastructure investment and an infrastructure investment in parts of the world that does not have the benefit of telephone lines now. The only way you're going to do that is through satellite communication and we and as you mentioned Iridium and maybe one or two others are able to do that. But the market is so huge, I think there's room for all of us to do well.
DOBBS: And in terms of your satellite manufacturing division, the situation in Asia is what led Loral to have to announce layoffs, 300 people last week. Do you see that as being the end of the repercussions from the Asian economic crisis.
SCHWARTZ: Well, I think that's the impact on SSO or Loral. I think you're going to find the Asian flu to have some impact on American industry, but over the long pull, the infrastructure investment requirement in Asia still is there. The demand is still there and I think it will, once it settles down a little bit, the dust settles, they'll be a sustained growth pattern that will be better for us and better for other companies that manufacture and export to that part of the world.
DOBBS: Then you do not see the Asian economic crisis as a long- term event?
SCHWARTZ: I don't think the crisis is a long-term event. I think things will settle down so that the financial investment will match growth patterns that are sustainable. And in the long run, that's better for American industry. It certainly will be better for Loral. The impact of this announcement is not very huge on Loral. We don't have a big investment hangout. We're just adjusting the through put of people to the requirement.
DOBBS: And you still have a huge, huge backlog of orders.
SCHWARTZ: Indeed, yes.
DOBBS: The last time we talked in October we were discussing these markets and Asia as well. You were almost singular in your confidence in the strength of the U.S. economy and the world economy. How do you feel today?
SCHWARTZ: Even more so. America is the leader of production, manufacturing, financial services around the world. That leadership is demonstrated by its dominance of many markets. I hate to use the
word dominance, but, in fact, we are the sustaining continued leader in many of those markets and the reason for that is many. We are deregulation in the United States. We've had the benefit of a peace dividend in the United States. We continue to have productivity improvements and gains. We're really a powerhouse economically in this country and it's beginning to manifest all over the world.
DOBBS: One of the manifestations as you well know for the first time, talk of a surplus for the first time in three decades, almost three decades, 27 years, talk of a surplus now, the wrangling in the city in which you are tonight is all about how to spend it, whether to save it, where to apply it. What's your judgment?
SCHWARTZ" Well, my problem is that we were wrong so long in the policy of the economics of the deficits in this country. The deficit did not have the impact that everybody thought -- had predicted it would. We didn't have inflation. We didn't have a crowding out of investment dollars. There was continued savings in the United States. Everybody they said would happen did not happen. So it was an economic policy judgments in the past that were, I think, failed. I'm concerned that as we go into a new surplus era, those policy judgments again will be based on the wrong kinds of things and I'm hopeful we get smart people in there who will begin to understand that we have a very sustained, very, very strong economy in this country. It's over $7 trillion economy and we should base our judgment on the basis of the long pull and I hope that we save enough of it, of the surplus to pay off some of the debt.
DOBBS: Bernard, as always, good have having you with us. Bernard Schwartz.
SCHWARTZ: Nice to be here Lou.
DOBBS: Thank you.
Good Luck to All tomorrow
Brian H. |
