Caterpillar CEO Jim Owens Talks Construction on Bloomberg TV
0 Comments | CEO Wire, Apr 26, 2010
CATERPILLAR CEO JIM OWENS TALKS CONSTRUCTION ON BLOOMBERG TV
APRIL 26, 2010
SPEAKERS: JIM OWENS, CEO, CATERPILLAR
LORI ROTHMAN, BLOOMBERG NEWS
ZAHRA BURTON, BLOOMBERG NEWS
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
13:30
LORI ROTHMAN, BLOOMBERG NEWS: CEO Jim Owens joining us now from Peoria, Illinois, with more on those first quarter earnings and the outlook for his company and the industry.
Welcome to you, Jim. Also, our Zahra Burton has been covering news of Caterpillar’s earnings today, so she’ll join in in the interview as well. So Jim, first let me ask you what factors led you to raise this year’s sales and profit forecast?
JIM OWENS, CEO, CATERPILLAR: Well we’re seeing a pretty good bounce in investor confidence around the world in terms of our customers, particularly those in the emerging market theaters around the world. We’re seeing a very sharp economic recovery from the recession. The global oil and gas and mining industries, which are of course experiencing high commodity prices, and their confidence is coming back. And of course globally credit markets are performing pretty well. So –
ZAHRA BURTON, REPORTER, BLOOMBERG NEWS: Can I just interrupt –
OWENS: A nice bounce of confidence.
BURTON: And can I ask you – you just talked about emerging markets a while ago coming back strongly. And I just wonder, is China trying to cool its economy a concern to you at all?
OWENS: Zahra, it’s not really a concern to me. I just came back from an extended trip in the Asian theater. I spent a few days in India, a week in China, some time in Indonesia and Japan.
And what we’re seeing across these emerging markets, of course the big investments their governments are making in infrastructure and infrastructure improvement coupled with mining activities pretty strong in these countries. And confidence is coming back.
So we’re seeing some pretty robust growth. Yes, China is growing more rapidly this year than is probably sustainable. But they’re taking some steps to dial that down a little bit now. And we’re not too worried about it.
We think they’ve had an extended period of strong growth. It looks likely to continue. And it’s pretty healthy economic growth. And investments in things that will help their long term competitiveness. That’s what’s encouraging.
ROTHMAN: Jim, I’m interested in the financing climate. How much has bank financing helped spur sales for Caterpillar?
OWENS: Well, as you might know, we have our own captive finance company. And I’m very encouraged by the fact that we have good access to credit markets not only here in the United States, but in Australia, in Japan, in Western Europe. And we’re able to borrow now at reasonable spreads again, and pretty attractive rates, quite frankly, for three to five year money. And that positions us to relend that money to our customers and to finance their growth at reasonable –
BURTON: Jim, let me ask you about the small business mom and pop operation. How important is that? Because you just talked about financing, credit markets improving, and that kind of thing. But the small business on the street, they’re talking about difficulty in obtaining financing because borrowing standards have become so strict.
What are you doing to help out that part of your business? And are you seeing that as a problem for your business?
OWENS: Zahra, a great question. Quite frankly, a lot of our customers – the large numbers of our customers are small and medium sized companies. A small contractor who needs to buy a backhoe or an excavator for his next construction project, we’re very enthusiastic about lending to him, working with him.
We loan, as you might know – we’re asset based lenders
peoria