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February 26, 2013 8:17 pm
The chief executive of Cisco said on Tuesday he was looking to invest some of the network equipment company’s $46.4bn gross cash pile in Europe and Canada, after abandoning lobbying efforts to change US tax policy on foreign cash holdings.
John Chambers told the Financial Times that the technology industry, which by some estimates holds half a trillion dollars in cash reserves, had given the US government plenty of time to allow US companies such as Dell, Microsoft, Apple and Cisco to bring the cash home without paying tax a second time.
“Over the last four to five years we wanted the US government to have a chance to provide a policy where we and others could make decisions on where we’re going to invest and where our headcount growth is going to be,” he said at the Mobile World Congress trade show in Barcelona.
“It’s now at the point where we are going to go ahead and move. You’re going to see us put the cash to use.”
Technology companies’ growing cash reserves have been a focus for investors recently, after hedge fund manager David Einhorn launched an attack on Apple in an effort to force the company to return more cash to its investors.
Mr Chambers warned that the US would lose out on valuable jobs growth as its technology companies invest money overseas.
“Wherever I acquire is where my headcount growth is going to be,” he said.
Mr Chambers suggested that Europe and Canada would be likely places for Cisco to invest because of their regulatory environment.
“In terms of our overall approach we’re going to go wherever the start-ups are and where the governments are that really want us.
“The easiest place in the world to do business is Canada. Their prime minister gets it. They make it easy for me to invest and do acquisitions there; they have a great education programme and they have a great immigration policy.”
“This is where I think people forget – it’s no longer about beating your neighbour, it’s about who executes the best. I like some of the trends in Europe that I see. I’m very bullish about Scandinavia and Germany, and currently I’m an optimist about what’s going on in the UK.”
In terms of our overall approach we’re going to go wherever the start-ups are and where the governments are that really want us
- John Chambers
Mr Chambers, who earlier on Tuesday joined government ministers from the UK, India and Australia, and executives from Saudi Telecom, for a panel about government policy on mobile technology, said state-sponsored theft of intellectual property was high on the agenda and that governments were going to have to be more aggressive in policing each other.
“What you’re going to see is a major push on both security to protect that intellectual property, but also by governments saying that it’s going to be unacceptable if another government takes the intellectual property of companies and gives it to their companies for competitive advantage.”
Additional reporting by April Dembosky in San Francisco
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