Don’t expect a manufacturing sector recovery until at least the first half of 2010, Illinois Tool Works CEO David Speer told Mad Money Thursday.
With the trouble in housing and autos, appliance markets struggling, the overall industrial industry at 30+-year lows and Europe doing even worse, it will be “some time before… we’re going to clear the tunnel,” Speer said.
But that doesn’t mean ITW can’t be owned, the CEO pointed out. This company has a history of performing well during downturns and emerging later as a stronger competitor. Speer said his focus would remain the same: introducing new products, increasing market share and acquiring other companies all as a way to accelerate growth and provide long-term cash flow once the recession has past.
Illinois Tool Works should benefit from Obama’s stimulus plan, too, as long as it contains the infrastructure spending Wall Street’s expecting. ITW supplies the commercial construction industry, industrial-packaging businesses and other key markets that stand to gain the most. Though, again, Speer said the actual effects of the stimulus probably won’t show up until 2010 or even 2011, but they should have a “reasonably significant impact” at that time.
Cramer put ITW in the same category as Eaton and Caterpillar , as quintessential American manufacturing companies that should be bought right here.
Jim's charitable trust owns Eaton.
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