General Electric CEO Says Economy Is Recovering
Nov 13, 2003
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General Electric Co.Ìs (GE) chairman and CEO says the conglomerate sees signs of economic recovery in strengthening orders in its short-cycle businesses, which includes plastics and appliances.
"The economy is recovering," Chairman and CEO Jeff Immelt said at an International Business Machines Corp. (IBM) customer conference. "We feel it every day. I see more and more positive signs. It's feeling better. We see it in our short-cycle orders."
GEÌs short-cycle businesses such as plastics, appliances, lighting, and specialty materials, which are more sensitive to short-term economic fluctuations, are closely watched on Wall Street because they are seen providing a barometer on the economy.
Plastics, for instance, is considered a leading economic indicator by company executives because its products are used in industries ranging from car making to compact disc production.
GE shares, which had been up about one-half of a percent just before Mr. Immelt's comments, rose further immediately following his statement. The stock closed up U.S. $0.59 , or more than 2 percent, at $28.70 on the New York Stock Exchange.
GEÌs short-cycle businesses account for 10 percent of the conglomerate's business.
Echoing Mr. ImmeltÌs optimism, IBM Chairman and Chief Executive Samuel Palmisano told the gathering of major customers that signs of increased demand for information technology were developing.
"The world now is beginning to take some risk," Mr. Palmisano said. "It's very, very encouraging as we look out to the future.
Mr. Palmisano was speaking just 1 year after IBM, based in Armonk, NY, U.S., introduced its initiative called "on-demand" computing, which aims to make technology less expensive and more flexible.
Other technology companies, such as Hewlett-Packard Co. (HP) also have such plans to try to make it easier for their customers to respond quickly to changes in their businesses.
Mr. Palmisano also called for more attention on the broader technology developments and less attention on quick fixes to drive growth for the industry.
"I'm very optimistic on the long-term growth of the information technology industry, but it won't grow as its grown," he said, adding that the companies that grow won't be the same ones that have been the stars in the past.
"We've got to get off the gizmos, get off the gadgets," he said. (Reuters)
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