The Princes of Business Review an Unruly World
More than 100 chief executives of the nation’s largest companies--millions of dollars in salary representing more than a trillion dollars in business--met here in Colonial Williamsburg this weekend to compare notes on the economy and listen to officials from nearby Washington.
In one sense, the CEOs--meeting as the Business Council, an idea dating to Eisenhower’s Presidency--were an assembly of princes receiving the rulers of the land. First Lady Hillary Rodham Clinton came to speak on Friday about health care reform. In a closed door session she told the businessmen--this group was all men--of ambitious plans to combine employee health insurance with workers compensation and auto insurance as a way to broaden health insurance coverage and yet lower costs to business.
Executives afterward called the First Lady “knowledgeable” and “proficient” but said she discussed few specifics of how to pay for a new health plan.
Yet for all their great status, the business brass presented a reassuringly democratic picture here in this restored 18th-Century Virginia capitol, where Patrick Henry once cried for liberty. At one private session, 15 top executives argued with each other over who among them could get close enough to President Clinton to persuade him to come out strongly for the North American Free Trade Agreement with Mexico and Canada.
Their conclusion was that none of them--the bosses of AT&T;, GE, the Morgan and Chemical banks, duPont and others--really had that much influence, despite the millions their companies spend on Washington lobbyists and their own frequent consultations with members of the Administration.
“We have more access to top Clinton people than we ever had in the Bush Administration,” observed Edgar Woolard, chairman of duPont, in a quiet moment.
So what did all the important talk in springtime Virginia add up to? That the world is changing just as rapidly as you think it is and yet staying the same in many ways. Politics and business still dance warily around each other like marriage partners with definite ideas of their own.
Collectively the Business Council predicted 3% growth for the U.S. economy but individually some CEOs thought U.S. growth might be slower. “There’s plenty of credit available but little loan demand,” said Walter Shipley, president of Chemical Bank.
“Business investment in computers and communications equipment is growing 14% a year,” noted Dennis Weatherstone of J.P. Morgan & Co., pointing to a trend of corporate spending on efficiency that is keeping costs and prices down but jobs scarce.
“There is no sign of inflation anywhere,” said John F. Welch Jr., chairman of General Electric. In fact, many executives noted deflation. “Our sales volume grows by 3% a year, but prices fall back one or two percent,” said duPont’s Woolard.
Welch explained the big reason for deflation: “A great global overcapacity was built up in the 1980s and now we’re in a two to three year slowdown to close the gap between demand and supply.”
Old markets are weary. Europe is flat on its back, Japan is in recession.
But new markets are booming. CSX Corp.’s Sea-Land container ships are seeing “very strong activity in Southeast Asia and in South America,” said John W. Snow, chairman of the shipping and railroad company.
Asia and Latin America are growth areas for power plants and engineering work, said Stephen Bechtel, retired chairman of Bechtel Group, the San Francisco based engineering firm. And they’re getting a lot of play in oil and gas drilling, too, said Chairman John Murphy of Dresser Industries.
That’s why Business Council executives want Clinton to back free trade with Mexico--they see an enormous growth market.
But Washington veterans explain that politics of free trade with Mexico have nothing to do with economics--or even good sense. “It was a Bush Administration idea, so it’s not a Clinton priority,” said a former White House staffer, although there are signs the Clinton Administration is now getting behind the free trade treaty.
The Clinton-Gore priority, by such inside-the-Beltway reasoning, is the electronic superhighway for computing and communications--a program favored by John Sculley, the chairman of Apple Computer who does have influence in the new White House but who did not attend this session of the Business Council.
Otherwise, the worries of the assembled executives were the stuff of daily headlines--that the Clinton Administration doesn’t seem to have its act together, that it is creating a lot of “uncertainty,” a word much heard in Williamsburg.
Yes, but most of the executives voted for Bush. Do they really object to Clinton’s program being stymied by Republicans in Congress? “It’s not good for business,” said Wayne Calloway, chairman of Pepsico. “There’s too much uncertainty.”
He could be right; although the latest employment statistics show record amounts of overtime and part-time work, none of the hundred CEOs in Williamsburg spoke of plans to do much new hiring soon and when asked about job creation they changed the subject because they didn’t know the answer.
