Henry Kravis, head of the leveraged buyout firm Kohlberg Kravis Roberts & Co., says the U.S. economy is threatened by "corporate gridlock" and defended leveraged buyouts as making the economy more efficient.

Kravis, in a speech to the Harvard Business School Club of Greater New York, said American corporations should take a long-term view instead of focusing on "immediate profit."Many company officials and economists argue that the short-term focus of U.S. managers has been spurred by a wave of corporate buyouts like the record $25 billion RJR Nabisco Inc. deal, headed by Kravis.

But Kravis defended leveraged buyouts, which his firm pioneered, as a financing technique that enables a company to become more efficient and profitable.

He said the buyouts allow managers to become owners of corporate assets, risking their personal wealth.

Kravis said American businesses must change what he described as "corporate gridlock" threatening the U.S. economy. He said too many corporations force out entrepreneurial individuals and fight against the introduction of new ideas.

"The entrepreneurial energy is not only lacking, it is simply not wanted anymore," he said.

He called for a new attitude on the part of corporations that would make them "highly flexible and able to adapt rapidly to changes in the global marketplace."

Leveraged buyouts are purchases in which public stock is bought out through borrowed money, with the resulting debt paid off out of the company's cash flow and in some cases the sale of assets.

Kravis said frequent criticisms of leveraged buyouts, including allegations that employees lose jobs without reason and that capital expenditures are curtailed, are not supported by the facts. He said some initial layoffs may have occurred because previous managements encouraged unrestrained growth.