-
Reuters – Chambers sees Cisco CEO role changing in 5 years
Asked about the weaker U.S. economy, Chambers said many customers of Cisco see a recovery early next year. “Most customers still see the turn probably late this year or early next year. More of them looking toward early next year,” he said.
Comment John Chambers has offered his opinions on the economy before between 2000 and 2002. He also expressed those opinions to Alan Greenspan and they helped formulate Federal Reserve policy. This was the famous “corporate visibility” that Greenspan used to justify policy.
However, as Caroline Baum detailed in a December 2001 Bloomberg column, Chambers’ “visibility” was all wrong and it could have contributed to an error in FOMC policy.
At an analysts’ meeting exactly one year ago [December 2000], Cisco Systems Inc Chief Executive John Chambers said he had “never been more optimistic about the market opportunities for our industry as a whole and for Cisco within that market.” He dispelled rumors that the company would be lowering its guidance.
It wasn’t until January [2001] that Chambers acknowledged the slowdown in capital spending and admitted the outlook was “more challenging.” So what are we to think now [December 2001] of the collective assessment of those attending Credit Suisse First Boston’s technology conference last week that “none of us has any visibility right now?” If corporate CEOs were reliable forecasters of future business activity, why is the economy still reeling from an intense inventory correction one year after demand collapsed? This time around, the global interconnectedness as a result of the Internet was supposed to provide companies with superior information, preventing the dreaded build-up of inventories when demand slows.
In a paean to the New Economy on March 6 [2000] last year — at the very moment the New Economy, as represented by the NASDAQ Composite Index, was cresting — Fed Chairman Alan Greenspan voiced his belief in the ability of the Internet to reduce uncertainty and increase efficiency.
“Before this quantum jump in information availability, most business decisions were hampered by a fog of uncertainty,” the chairman said in an address, entitled The Revolution in Information Technology, to a Boston College conference on the New Economy.
Consider Chambers’ track record when weighing his opinions about the economy. Better yet, flip a coin, it has a better track record.