Despite Caterpillar’s worst wave of layoffs since the early 1980s, the company’s CEO remains optimistic on the global economy, although there are immediate bumps ahead.
“As we look at 2009, we’re forecasting our sales [revenue] will drop from 51 billion to 40 billion,” said James Owens, the CEO of Caterpillar .
“We’re looking at the ’05-’06 level of sales. I’m still pretty optimistic on the global economy on a long-term basis if we play our cards right through this recession.”
Two keys in the global economic recovery are the United States and China, he said. Their respective stimulus packages could be a significant driver of positive GDP growth and creating demand for commodities, he said. “It’s a virtuous circle, and we need to really nurture it,” he said.
Isolationist economic policy would be disastrous, he said. “We’ve got to keep our markets open if we expect other countries to keep their markets open,” he said.
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Asia, Europe and the United States should participate in each other’s stimulus packages, said Owens.
“This is exactly what happened in the 1930s,” he said. “Politicians got focused on protecting jobs at home and turned inward instead of creating global, healthy economy that everyone can flourish in.”
Stabilizing the financial and credit markets are also imperative in stimulating economic growth, Owens said.
“If credit markets can be reasonably stabilized, and a substantial and sustainable stimulus package put in place in the first half of this year, you’ll start to get some traction by the end of the year, probably out of the third or fourth quarter, that will carry nicely into 2010.”
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