D Spending

Corporate restructurings are forcing some U.S. companies to curtail R&D spending even as they are being urged to increase such investments to remain competitive. Many companies, saddled by the massive debts often involved in such transactions, are having "to change their business strategy from long-term to shorter-term cash flow, which can't help but have an adverse effect on R&D," said Roland W. Schmitt, senior vice president and chief scientist at General Electric and chairman of NSF's Nationa

Stephen Greene
Feb 22, 1987
Corporate restructurings are forcing some U.S. companies to curtail R&D spending even as they are being urged to increase such investments to remain competitive.

Many companies, saddled by the massive debts often involved in such transactions, are having "to change their business strategy from long-term to shorter-term cash flow, which can't help but have an adverse effect on R&D," said Roland W. Schmitt, senior vice president and chief scientist at General Electric and chairman of NSF's National Science Board. "I think there's no question that the whole business of acquisitions, mergers and takeovers will result in lower R&D expenditures."

Charles Larson, executive director of the Industrial Research Institute in New York, fears what he sees as a growing trend.

"It's the result of the drive to maximize the bottom line every quarter, rather than taking a long range viewpoint, and that's very unfortunate," Larson said. "It is just the opposite...

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