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School Hosts CEOs from GE, Cisco and FPL as Part of Global Business Forum Series

April 23, 2009
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Global Business Forum Continuing Series

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The widespread adoption of cleaner, more energy-efficient technologies will require innovation and a government push. That was the consensus of the CEOs of some of the world’s leading companies participating in a special CEO Forum hosted by the School of Business April 20 as part of its Global Business Forum Series.

Clean energy is both technology innovation and public policy,” said Jeffrey Immelt, the chairman and CEO of General Electric. “Government has to be involved, it just has to be,” added Immelt, who as head of the $180 billion

   Jeffrey Immelt
 
 General Electric Chairman and
 CEO, Jeffrey Immelt
conglomerate, has been named one of the "World's Best CEOs" three times by Barron's.

Immelt was joined on-stage at the School of Business by John Chambers, the chairman and CEO of Cisco, and Lew Hay, the chairman and CEO of FPL Group, in the discussion about the world’s energy future. The question-and-answer session, moderated by UM President Donna E. Shalala, followed a news conference in Miami, where the three CEOs joined Mayor Manny Diaz to announce a new energy initiative for South Florida. The “Energy Smart Miami” initiative proposes to use federal economic stimulus funds to help spur a $200 million investment in "Smart Grid" technology and renewable energy over the next two years. It aims to help Miami-Dade County consumers save money by giving them more choices over how they consume and conserve electrical power.

Shalala addresses crowd   
UM President Donna E. Shalala moderated the forum.
 
Changing the way the world consumes and conserves energy also dominated the discussion later at UM, which brought the CEOs face-to-face with some 300 students from the School of Business and across the University. MBA student Jonathan Fretz, who works for GE’s Water & Process Technologies division in Fort Lauderdale, wanted to know what it will take to get America to accept nuclear power.

“I’m a big believer. I’m a big fan of nuclear power,” said Hay, noting that FPL has four nuclear facilities in Florida and is the nation’s third largest nuclear power operator. “We’ve operated plants safely and successfully for many years.” But Hay said it will take presidential leadership – which has not been seen in the Obama administration - to overcome the opposition.

CEO Forum Group   
 
“There’s a strong minority who are very, very actively opposed to nuclear [energy] for reasons I can’t fully explain,” said Hay.

The CEOs pointed to economics as another obstacle to the adoption of renewable energy. FPL started a project that would use Florida orange peels to try to produce ethanol, but Hay noted that once the price of gasoline dropped significantly, the price of ethanol collapsed.

“We’ve kept our options [open]…but the economics just don’t work right now,” said Hay.

“Every technology we have in the energy space, not only does it have to fit a technology hurdle … it also has to fit a cost of electricity hurdle,” said Immelt, who indicated that ethanol would not be viable today without large government subsidies. Immelt also pointed to the government’s role in fostering research as important for innovation.

“NASA, health care, I mean you go down the list, and government has a stimulative impact on R&D spending for several generations.

   John Chambers
 
 John Chambers, chairman and CEO
 of Cisco

Chambers,  who as head of Cisco has been named one of Time magazine’s “100 Most Influential People” and one of Barron’s “World’s Best CEOs,” added that business must also lead to help bring about change and innovation.

“If you’re really saying we believe in the environment, then we must lead in business,” said Chambers. “Each of us must set our own goals … set our own emissions reductions – Cisco will cut our emissions by 25 percent from 2007 to 2012, we’re already 12 and half percent there.”

Despite the challenges, Immelt predicted that by 2040, there will be three or four new major renewable technologies in widespread use, including wind and solar. “Battery technology is huge, so battery technology, whether it’s for storage or plug in hybrids, is going to be a big technology of the future,” he said.

The Global Business Forum Continuing Series follows the inaugural University of Miami Global Business Forum held in January 2009. The signature event, organized by the School of Business, brought together nearly 700 leading business executives and other professionals for two days of discussions on the challenges and opportunities arising from the increasingly connected global world. Keynote speakers included the CEOs of some of the world's most prominent companies including The Coca-Cola Company and McDonald's Corp. For more on the 2009 Global Business Forum, including videos, session papers, transcripts and more, visit the Forum Web site.

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