A View From On High

By David Drickhamer The World Economic Forum's annual meeting in Davos, Switzerland, concludes Jan. 28. "Building Trust" was the theme of this year's gathering of the world's leading business people, academics and policy makers. Moving beyond the accounting misdeeds in corporate boardrooms, in Davos the issue of trust has been most sharply focused on the prospect of war in Iraq, the U.S. political leadership's hard line position -- troubling in its one-sidedness for many politicians, especially in Europe -- and what impact such a conflict could have on business. Indeed, Donald Evans, the U.S. commerce secretary, acknowledged that the question of Iraq has created extra risks for businesses, which are delaying many investment decisions. While not directly linking it to the prospect of war with Iraq, the prospect of delayed investment was confirmed in a panel discussion led by John Chambers, CEO of Cisco Systems Inc., headquartered in San Jose, Calif. "The risk-reward factors are a little bit more conservative than I've ever seen in my business career," said Chambers. "The majority of CEOs I talk to across the country are going to be conservative in their budgeting for this year, especially on employment, even on capital spending, until they see business turn up . . . It's almost a 'show-me' economy from the CEO's perspective." Charles O. Holliday Jr., chairman and CEO of Du Pont & Co., Wilmington, Del., said that global uncertainty directly lead to order cancellations in the fourth quarter. "Because the economy has been down, a number of our customers don't have the cash available, so they're just watching things much, much closer than they would have been two or three years ago," said Holliday. "Until we see some resolution or some settling here, it's going to be difficult to see any robust recovery at all."

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