Snap-on Plots Long Term Regardless of 'Cliff': CEO
Despite the uncertainty surrounding the "fiscal cliff," Snap-on continues to invest in its business for the long-term, CEO Nicholas Pinchuk told CNBC's "Street Signs" on Thursday.
"If we go over the fiscal cliff it can't be good," Pinchuk said, speaking about the looming tax hikes and spending cuts that will hit the economy at the end of the year. "That just ratchets up uncertainty."
The CEO of the high-end tool manufacturer said that getting a deal done would help improve investor psychology.
If tax increases are part of a deal, however, it probably wouldn't affect a Snap-on customer base that consists of primarily mechanics, the CEO said.
In the auto repair industry, cars have gotten older every year since 1980 and every time the fuel economy requirements go up new technology is required, Pinchuk said. "So our customers have to retool to deal with this and this makes for good business," he added.
The company also continues to invest in areas that will benefit its business in the long run.
Snap-on is expanding in emerging markets, and "making sure we roll the Snap-On brand out of the garage to other industries" like aerospace and oil and gas, Pinchuk said.
Within emerging markets, Snap-on is focused on China, India and Indonesia.
"China's the biggest air conditioning market and the biggest car market in the world but the repair market is just starting," he said. "That's why in the last four or five years we've put 1,500 people, five factories and a new design center to get ready for that wave that's just building."
Pinchuk said if we keep investing in those areas "it'll work pretty well."
