{"id":408225,"date":"2010-03-09T14:20:55","date_gmt":"2010-03-09T19:20:55","guid":{"rendered":"http:\/\/blogs.wsj.com\/economics\/2010\/03\/09\/caterpillar-ceo-sees-stronger-rebound-boosting-sales\/"},"modified":"2010-03-09T14:20:55","modified_gmt":"2010-03-09T19:20:55","slug":"caterpillar-ceo-sees-stronger-rebound-boosting-sales","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/408225","title":{"rendered":"Caterpillar CEO Sees Stronger Rebound Boosting Sales"},"content":{"rendered":"

Sales at Caterpillar<\/strong> Inc. are expected to rise 10%-25% this year on inventory restocking and a stronger global rebound than was initially expected, James W. Owens<\/strong>, the company\u0092s chairman and chief executive, said on Tuesday.<\/p>\n\n\n\n\n
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Caterpillar expects sales to rise on a better-than-expected global rebound. (Associated Press)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Yet Mr. Owens, who will be retiring as CEO in June, cautioned the outlook remains uncertain and assigned a 25% chance to a \u0093Great Recession\u0094-type of event in which Caterpillar\u0092s sales, which were $32.4 billion in 2009, increase to just $35 billion by 2012.<\/p>\n

The company\u0092s current \u0093base case\u0094 scenario is for sales to reach $55 to $60 billion by 2012, said Mr. Owens, speaking before a lunchtime crowd at a conference held by the National Association for Business Economics<\/strong> in Arlington, Va. \u0093We have to be really nimble,\u0094 he said.<\/p>\n

Asked about price pressures, Mr. Owens said he expects them to be minimal. In 2009, the company\u0092s total material costs declined on a world-wide basis, and he said he expects that to happen again this year.<\/p>\n

\u0093We\u0092re not seeing a lot of risk of inflation,\u0094 said Mr. Owens, an economist by training who has served as Caterpillar\u0092s chief executive since 2004.<\/p>\n

Avoiding deflation, a situation in which prices and wages enter a downward spiral, \u0093is critically important,\u0094 said Mr. Owens. \u0093Modern industrial economies don\u0092t know how to deal with deflation\u0085 I think the Fed gets that.\u0094<\/p>\n

The biggest force driving the company\u0092s sales increase this year is the inventory cycle, he said. Caterpillar reduced nearly $3 billion in dealer inventory last year, and the absence of a similar decline this year \u0093means a big pop in sales.\u0094 Mr. Owens had high praise for the Federal Reserve<\/strong>\u0092s actions during the credit crisis under Chairman Ben Bernanke<\/strong>. \u0093I don\u0092t think I could be more complimentary of what the Federal Reserve has done, in particular seeing us through this horrific recession,\u0094 he said. \u0093The decisions\u0085 may not have been perfect but I think they have served us extraordinarily well in preventing an outright depression.\u0094<\/p>\n

He said he wished more of the roughly $800 billion stimulus package had been directed at infrastructure investment, which the U.S. sorely needs, but said he supported the stimulus package overall and such criticisms were largely just \u0093picking at the margins.\u0094<\/p>\n

He also underscored the need for keeping corporate taxes low so the U.S. can retain multinational firms, and going forward with free-trade agreements that promote exports and create U.S. jobs.<\/p>\n

Caterpillar, the world\u0092s largest manufacturer of construction and mining equipment known for its signature yellow machinery, also has been diversifying from a manufacturing to service-oriented company.<\/p>\n

Its service businesses accounted for nearly 50% of the company\u0092s sales in 2009, Mr. Owens said, thanks to divisions in financial services, renting and leasing, refurbishing of used or broken equipment, and recent acquisitions such as Progress Rail, which provides world-wide maintenance of railroads.<\/p>\n

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Sales at Caterpillar Inc. are expected to rise 10%-25% this year on inventory restocking and a stronger global rebound than was initially expected, James W. Owens, the company\u0092s chairman and chief executive, said on Tuesday. Caterpillar expects sales to rise on a better-than-expected global rebound. (Associated Press) Yet Mr. Owens, who will be retiring as […]<\/p>\n","protected":false},"author":850,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-408225","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/408225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/850"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=408225"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/408225\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=408225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=408225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=408225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}