David Farr, CEO of Emerson Electric Co., said federal governmental policies are hurting U.S. manufacturing, citing cap and trade, health care reform and labor rules as undermining the industry.
David Farr, CEO of Emerson
Electric Co., said federal governmental policies are hurting U.S.
manufacturing. He cited cap and trade, health care reform and labor rules as
undermining the industry and its ability to expand and grow jobs domestically. He
said that his company will continue to focus on growth overseas.
Emerson, the maker of electrical equipment and
InSinkErator garbage disposals with $20.9 billion in sales for the year ended
September, will keep expanding in emerging markets, which represented 32 percent of revenue
in 2009. About 36 percent of manufacturing is now in “best-cost countries” up
from 21 percent in 2003, according to slides accompanying his speech at a Baird
Industrial Outlook conference.
Companies will create jobs in India and China, “places
where people want the products and where the governments welcome you to
actually do something,” Farr said. Mature markets such as the U.S., Western Europe and Japan
continue to decline in importance and the company will keep investing in
emerging markets, Farr said during the presentation.
“We as a company today are putting our best people, our
best technology and our best investment in these marketplaces to grow,” he
said. “My job is to grow that top line, grow my earnings, grow my cash flow and
grow my returns to the shareholders. My job is not to shrink and roll over for
the U.S. government.”
The unemployment rate in the U.S. jumped to 10.2 percent in
October, the highest level since 1983. Emerson, which Farr said employs about
125,000 people worldwide, has eliminated more than 20,000 jobs since the end of
2008 to lower expenses. “What do you think I am going to do?” Farr asked. “I’m not
going to hire anybody in the United States. I’m moving.”
Emerson, based in St. Louis, recently fell 7 cents to $41.35 in New York Stock Exchange composite trading. The shares have risen 13 percent this year.
The company had $1.7 billion in sales last fiscal year
connected to energy efficiency through demand for products such as
variable-speed controls and digital compressors, and it plans to increase that
amount to about $5 billion in five years, Farr said.
For more on this story, read
Emerson's CEO Lashes Out At U.S. Manufacturing Burden
November 18, 2009