IBM CEO Says U.S. Economy is Strong

The U.S. economy is fundamentally sound, says IBM CEO Lou Gerstner. Speaking in a rare TV interview on CNBC Monday, the head of the world's largest computer company said he marvels at how solid the U.S. economy is despite the recent terrorist attacks on New York and Washington and ongoing troubles on Wall Street.

In the interview Monday, Gerstner noted that his company had more than 1,200 customers impacted by the calamity in the New York World Trade Centers (WTC) alone. Fortunately, back-up plans that put data centers outside major offices in place at major financial institutions and elsewhere helped many of the impacted businesses get back up and running more quickly in the aftermath of the simultaneous attacks on the WTC twin towers.

Gerstner noted that IBM has seen a modest uptick in spending by a select group of customers impacted by the tragedies, but added that it was too early to tell if the attacks would suppress or accelerate demand for computer goods and services elsewhere. He did note, however, that the tragedies have brought to light the value of secure, reliable distributed networks.

Despite the record market sell-off last week, Gerstner expressed his faith and amazement in the U.S. economy and the American people in general. If anything, he noted, the recent events have "brought us all together."

Gerstner said business leaders now fully recognize that lingering benefits of the dot com mania have all but evaporated. That, in turn, has people thinking more clearly about their businesses and putting more value in basic, business fundamentals. To that end, he expects the U.S. business climate to remain a strong given the advances in corporate and university labs, and the inventiveness and creativity of business leaders.

While noting that the bombings have created uncertainty, Gerstner says now is not the time for businesses to panic or take flight of their long-term goals. He noted that the largely patriotic attempts of last week to launch aggressive stock buy-back programs largely failed to achieve their goal of propping up share prices. Indeed, shares of most of the major companies that announced buy-back programs last week saw prices fall sharply.

IBM, which launched a share buy-back program some time ago, saw its shares rise on Monday by 4.75 percent to $94.80 per share.