Letter from My CEO

This Letter was written by my CEO in an OP-Ed from a St. Louis Newspaper, I couldn't say it better, so here it is:

America’s Survival as a Prosperous Nation is at Risk

Major manufacturers today must compete in global markets if they want to survive, prosper, and grow. Emerson is no exception. We compete head-to-head with Asian and European companies here at home and in virtually every market of the world. The ability to manage quality, innovation, logistics, customer support, manufacturing cost and many other factors determines which companies survive or don’t.
Emerson has expanded globally to diversify and ensure that we can continue to win against intense global competition. We are well positioned to grow profitably in the USA and in international markets, like China and India.

At a recent Chicago investment conference, I stated in strong terms that excessive federal spending and costly legislation are destroying the ability of U.S. manufacturers to compete globally, and to successfully invest in the U.S. Yes, Emerson is a St. Louis headquartered company with 30,000 U.S. jobs, but we must compete around the world.

I spoke in very strong terms to underscore the issues I believe our nation is facing. I understand that some don’t share my concerns. However, I believe our great country is threatened as the global economic leader if we don’t change our government’s course. The issues we face are not Democratic or Republican issues, or just business issues. They are real and impact every American, today and in the future.

The issues underlying my comments then, as now, impact America’s world economic leadership, quality of life and standard of living. Rapidly increasing government debt and proposed expensive laws are placing our nation’s future and competitive position at risk. Please consider these worrisome facts:

· Federal debt: Over two administrations, the United States has created debt that is forecast to exceed $20 trillion within 10 years. By the end of 2011, our projected government debt will be greater than our gross domestic product. This is a dangerous situation and is not the balance sheet of a global leader. Our current weak dollar reflects the world’s concern about America’s financial strength, and there is a clamor abroad for a new world currency standard. The eventual consequences of a weak dollar are less global investment in America, fewer jobs and a declining standard of living. Both political parties have contributed to this situation and both should work together quickly to resolve it without adding expensive new programs and spending beyond our means.

· Healthcare legislation: America needs health insurance reform and access to health care for all. Emerson provides health coverage to employees and their families in the United States -- more than 100,000 people. We would like to continue to do so. However, the bill that passed the House of Representatives, and the proposed Senate bill, would raise costs on private sector plans. Basic economics could force many businesses, like Emerson, to seriously consider exiting employer-sponsored plans, requiring employees to shop for coverage or move to the government-based plan. That’s not progress. We should look instead to many targeted, bipartisan proposals to help the uninsured, such as giving small businesses and individuals access to interstate insurance pools or investing in federally supported Community Health Centers that are effective in providing care for the uninsured.

· Tax policy: Major competitors in the European Union and Asia are taxed at lower rates than U.S. companies. That may be hard to believe but it’s true, and it gives them a significant competitive advantage. Emerson pays a substantial tax bill every year, as we should. But America needs a tax policy that is fair to all in this country – individuals and corporations – and that creates a level playing field against European Union and Asian nations.

We are a nation of varied beliefs and perspectives, and there is room for honest disagreement on all of these issues. But none of us wants to see our country weakened to no longer be the global economic leader. Greater government debt and diminished competitiveness mean global investment and good jobs will go elsewhere, and America will risk slipping into second-tier economic status. That’s not the legacy any of us want to leave future generations. Action is needed now!


David N. Farr
Chairman, CEO and President
Emerson