Washington DC (PRWEB) September 14, 2005
Action Fund Management LLC (AFM), investment adviser to the Free Enterprise Action Fund (http://www.FreeEnterpriseActionFund.com), asked the General Electric Company (GE) to justify the company's recently announced alliance with anti-business activists.
"GE's decision to side with global warming activists is inconsistent, in our view, with the best interests of its shareholders, global economic development and the free enterprise system," said Steven Milloy of Action Fund Management.
The Free Enterprise Action Fund (FEAF) is a mutual fund seeking to provide investors with financial returns while persuading companies to focus on increasing shareholder value and profits rather than appeasing outside activists. The FEAF owns less than one percent of the outstanding shares of GE.
GE projected earlier this year that 60 percent of its revenue growth over the next decade will come from developing nations. Then in July, GE joined the Pew Center on Global Climate Change, an activist group that supports the Kyoto Protocol and mandatory greenhouse gas emissions reductions.
"Global warming alarmism, we believe, will increase energy costs and damage economic development around the world and we frankly don't see how GE plans to make money in developing countries if their access to energy is impaired," said Milloy. Moreover, GE's public relations gambit of joining the Pew Center may backfire when the company tries to invest in development activities that run counter to the activists' agenda. GE's business opportunities and strengths in science and engineering should not take a back seat to public relations," added Milloy.
"A key argument advanced by global warming activists Â the so-called "hockey stick" graph that purports to show a dramatic rise in global temperatures during the 20th century after a millennium of supposedly little change in global temperature Â is partly based on the highly questionable extrapolation of global temperatures from the rings of single tree dating back to the 15th century," said AFM's Tom Borelli.(1) "We want to know whether GE subscribes to the 'lone tree theory' and other questionable assertions in the global warming debate," added Borelli.
In its letter to CEO Jeff Immelt, AFM asked:
- Is GE aware that mathematical models used to predict future global warming have not been validated against the historical temperature record and are not capable of predicting future global temperatures with any reasonable certainty?(2)
- Given that warmer climates are associated with increased agricultural production, how does GE know that a warmer climate is undesirable?
- How does GE know that the warming trend observed over the last 200 years is not almost entirely due to natural causes?
- Is GE aware that there is little, if any, correlation between greenhouse gas emissions and temperature trends during the 20th century?
- Is GE aware that the so-called "hockey stick" graph Â purporting to show a dramatic rise in global temperatures during the 20th century after a millennium of supposedly relatively constant global temperature Â is the subject of heated scientific controversy and congressional inquiry?
- Given that it may cost as much as $100 trillion dollars to potentially avert one degree centigrade of warming by the year 2050,(3-5) how does GE know that greenhouse gas (GHG) reductions are economically feasible?
- What is GE's analysis showing that growing worldwide energy demand Â estimated to triple by the year 2050 is compatible with GHG reductions?
- Is GE aware that EU nations are not meeting their commitments under the recently implemented Kyoto Protocol?(6)
"Corporate management should ensure that business decisions are based on thorough analyses and appropriate concern for shareholders and consumers Â not on external political or activist pressures. Managements too often try to appease activists and politicians by submitting to questionable demands and passing along unnecessary costs to consumers and shareholders. We view appeasement as a breach of management's duties that is harmful to shareholders, consumers and the economy, and that undermines our system of free enterprise," said Milloy.
The Free Enterprise Action Fund seeks long-term capital appreciation through investment and advocacy that promote the American system of free enterprise. An investor should consider the fund's investment objectives, risks, and charges and expenses carefully before investing or sending money. This and other important information about the Free Enterprise Action Fund can be found in the fund's prospectus. To obtain a prospectus, please call 1-800-766-3960 or visit http://www.FreeEnterpriseActionFund.com. Please read the prospectus carefully before investing.
Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. The Free Enterprise Action Fund is a new fund with limited investment history and there is no guarantee that it will achieve its investment objectives.
The Free Enterprise Action Fund is advised by Action Fund Management, LLC., which receives a fee for its services, and is distributed by BISYS Fund Services Limited Partnership, which is not affiliated with Action Fund Management, LLC.
1. McKitrick, R. What Is the Hockey Stick Debate About? APEC Study Group (April 4, 2005).
2. Singer, F. The Week That Was August 13, 2005. Science and Environmetnal Policy Project.
3. Wigley, T.M.L., 1998. Geophys. Res. Lett., 25, 2285-2288.
4. O'Keefe, W. Candor About Kyoto. Marshall Institute (June 1, 2001).
5. JunkScience.com. http://junkscience.com/MSU_Temps/Kyoto_Count_Up.htm (February 16, 2005).
6. Samuelson RJ. Greenhouse Hypocrisy. Washington Post (June 29, 2005).
# # #