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High-tech executives see dangers in the vote on a financial rescue
(Salt Lake Tribune, The Via Acquire Media NewsEdge) Oct. 3--High-tech businesses that offer productivity gains or ways to lower costs are holding their own and even prospering in the U.S. economic downturn.
But Novell Inc.'s CEO said Thursday that Congress must be aware of fragile consumer and business confidence as it considers a $700 billion rescue package for the nation's financial sector.
Without endorsing any specific plan, Ron Hovespian, who spoke to a gathering in downtown Salt Lake City of industry representatives about Utah's high-tech challenges and opportunities, afterward said Congress must act in order to calm an environment of tightening credit that has laid waste to banks and made loans tougher to get.
"I think our federal government needs to pay particular attention to the bailout vote" for the sake of "not only consumers but companies, as well," Hovespian said after a presentation sponsored by the Utah Technology Council.
Novell, which provides software to run businesses and whose core operations are in Utah County, is sitting on $1.4 billion in cash and, therefore, not yet hurt by the slowdown in lending, he said. But he joined others at the meeting in expressing concern about the nation's economic difficulties.
Michael D. Proper, president and CEO of DirectPointe, said the Lindon company continues to grow rapidly despite the economy because, like Novell, it can help lower costs for other companies by managing their computer systems.
But he worries that the current crisis has exposed weaknesses in the various financial instruments, as well as in the unsustainable nature of the consumer economy.
"I look at the stock market and it's just legalized gambling. I've built businesses, I've grown equity, I've provided the value, and I don't understand how some of these games that are played can consume these types of dollars that are pulled out of that environment."
Turning to the economy, Proper said an environment in which high rates of consumption combined with too little conservation or use of renewable resources is not sustainable. He also questioned the thrust of the $700 billion rescue bill.
"Sooner or later the piper needs to get paid, and the bottom line is it shouldn't be on the back of the people. For Congress to approve that, it will only enslave people more."
Nathan White, chief operating officer of Provo Craft, said that although his company's innovative electronic cutting machine for craft projects continues to set sales records, he is beginning to see his retail customers cut back on inventory.
White also said he thinks some sort of bailout should be passed by Congress because "if there's somebody who can step in in a reasonable way to say we're going to buy up these assets at a low-market value and wait and unload them at their market value, that's a rational approach."
Novell's Hovespian said his company is "insulated . . . we actually get a benefit from this type of environment" because it is winning customers by offering cheaper products that lower customers' expenses. Novell is doing it through its server software on the opensource Linux system -- whose core code is open to public use at no charge, he said.
When conditions improve in the U.S. economy, companies will have to focus on innovation and productivity to compete in the world economy and maintain and increase jobs, he said.
tharvey@sltrib.com
To see more of The Salt Lake Tribune, or to subscribe to the newspaper, go to http://www.sltrib.com.
Copyright (c) 2008, The Salt Lake Tribune
Distributed by McClatchy-Tribune Information Services.
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