Is John Chambers the new version of the “Ugly American,” as critics claim?

Or is he just a smart business executive looking out for the best interest of shareholders?

That debate is only going to intensify as Chambers ramps up anti-U.S. tax, education and immigration policy rhetoric.

Two weeks ago, Cisco Chairman and Chief Executive Officer John Chambers warned that his company was going to make deals, add employees and grow overseas IF U.S. tax policy didn’t change.

He’s tired of waiting. Now Cisco (Nasdaq: CSCO) is making good on that threat. And other companies in the tech sector are ready to follow the same strategy, Chambers tells the Financial Times at the Mobile World Congress in Spain.

But he didn’t stop there. Chambers took shots at education in the U.S. and failed efforts at changes in immigration policy for high-tech foreign workers.

“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,” Chambers told the FT.

“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.”

Cisco operates its second largest campus in RTP, and a spokesperson for the company confirmed to The Skinny last week that a number of the 5,000 or so workers are involved in Cisco’s latest big project – Quantum routers and mobile solutions.

If Chambers stands by his statements, the Triangle can’t really expect any big expansions in Cisco’s local work force.

Here’s what he said on CNBC after the company’s most recently earnings report:

“I’m a very loyal American citizen and company, but in terms of future growth, unless tax policy changes, you will see that occur outside the U.S…. Wherever we acquire is where our head count growth is going to be. If the majority of our money remains outside the U.S., and this depends on tax policies, that’s where you’ll see us acquire going forward.”

Cisco’s latest big deal was for a company in Israel, and the tech giant is shopping overseas.

As for places to grow, Chambers reiterated to The FT what he has said previously: Go north to Canada for growth.

“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,” Chambers said. “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 program and they have a great immigration policy.” (Note: emphasis added.)

Amazingly, given that Europe is a financial basket case even worse off that the U.S., Chambers praised the Continent. He “likes some of the trends” he sees there and he’s “very bullish” about Scandinavia as well as Germany. As for the U.K., he’s “an optimist.”


The Readers React

Numerous comments posted by Tech Wire readers reacting to the Chambers comments two weeks ago indicate the kind of reaction he is stoking – pro and con.

  • “Chambers is one of the WORST examples of a CEO, ever. What a brat as well.”
  • “He may be a brat, but he’s a smart brat. Why bring that money home only to be wasted by our government brats? They would rather bring it back and sink it into the economy … To call it un-patriotic means you are a fully engaged citizen of the welfare state.”
  • “Cisco CEO is one of the biggest crybabys. Do not tax corporation…corporation do not pay taxes…consumers do…end corporate tax start sales tax on most things except food”
  • “Cisco and many other major corporations have store fronts overseas (and in some cases just a mailbox) simply to avoid the outrageous corporate tax rates here in the U. S. At that time Cisco alone was paying millions of dollars in corporate taxes to a foreign country, as I recall to Switzerland, at a rate of 12%. The Cisco CEO clearly stated on that program that he would bring it all back to the U. S. if the rate was lowered to 20%. It’s a financial no-brainer really, and it’s legal. It is our government who is greedy. So here’s the question to the government: Would you prefer to have 20% of billions .. or 35% of nothing?”
  • “Chambers doesn’t care about anything except how much he and his gang of thieves get from their Cisco stock.”
  • “These people are not ‘loyal Americans’. They are only loyal to their own bank accounts. They do not care about their country or those that live in it. It’s time to revive this mentality : Ask not what your country can do for you. Ask what you can do for your country.”
  • “Yeah Cisco has already emptied Bangalore into Morrisville. Guess Chambers can start hiring in Bangalore again. I quit Cisco. Was a good company. Now..its good…for H1Bs [high-tech visas]…not so much for citizens.”

This debate is not going to go away. In fact, it’s likely to worsen, and the political pressure on tech executives to “repatriate” all those overseas profits is only going to intensify.

Hold on for a rocky ride …