UPDATE:Exxon Mobil CEO: US Companies See Need For Energy Policy
October 15 2009 - 3:28PM
Dow Jones News
The U.S.'s top corporate executives agree on the need for energy
and climate-change policies, but consider Congress' attempts at
legislation to be largely piecemeal approaches to comprehensive
issues, Exxon Mobil Corp. (XOM) Chairman and Chief Executive Rex
Tillerson said Thursday.
In comments to reporters at a Business Council meeting in North
Carolina, Tillerson dismissed notions that U.S. companies are at
odds with each other over whether such government policies are
necessary.
"I don't think there is a split over the need to do something,"
said Tillerson before ducking into meetings with dozens of fellow
chief executives. "In discussion among ourselves, people are
focused on serious challenges and serious solutions."
Much of the corporate push-back on legislative proposals dealing
with energy conservation, carbon-emissions reductions and
alternative energy, he said, stem from the limited focus of the
proposals. He said the measures often fail to address the broader
implications regulations to business competitiveness and the U.S.
economic performance.
"One of the challenges of dealing with Washington, and it's not
unique to this administration, is they look at issues in a very
narrow way," he said. "It's a long-term problem with how we
formulate policy. We've never really had a sensible, long-term
policy" on energy.
Tillerson said it is unlikely that Congress will be able
reconcile versions of energy legislation in the House and Senate
and approve a single bill by the end of the year.
This week's Business Council meeting at a North Carolina resort
is focused on energy issues. Tillerson was joined at the Business
Council press briefing by Jim Owens, chairman and chief executive
of Caterpillar Inc. (CAT) , and Jamie Dimon, chairman and chief
executive of JPMorgan Chase & Co. (JPM).
The executives avoided specific questions about their companies,
limiting their remarks to broader business issues and the results
of the Business Council's survey, which showed a marked improvement
in executives' outlooks about U.S. economic growth and the
performance of their companies in the coming months.
Nearly 63% of the respondents said business conditions in their
companies' industry sectors are improving, compared with 27% in the
May survey.
The majority of respondents seeing improvement, however,
described it as "moderately" rather than "substantially" better.
Just 6% of the respondents said conditions are worsening versus 18%
in May.
Nevertheless, executives expect sluggish economic growth in the
coming months, with 64% forecasting U.S. gross domestic product to
grow by 2% or less during the first six months of 2010. Almost half
of the respondents expect unemployment to range from 9.6% to 10%
early next year, while 26% see unemployment growing to 10.1% to
10.5%.
Owens noted that employment growth typically lags improvement in
the GDP coming out of recessions.
"The magnitude of the drop [in economic growth] is unseen since
the 1930s," he said "I think you'll see employment will grow after
several quarters of GDP growth."
The council survey also showed that more executives want the
Federal Reserve to dismantle credit market support to head-off
inflation.
Almost half of the 115 surveyed chief executives said it was
time for the Fed to unwind support, compared with just 15% of
respondents in May.
The Fed's unprecedented moves to provide liquidity for frozen
credit markets beginning in late 2008 have raised concerns that the
central bank is potentially stoking inflation now that the worst of
credit crisis has passed.
-By Bob Tita, Dow Jones Newswires; 312-750-4129;
robert.tita@dowjones.com