×

Exclusive Interview: John Deere Chairman and CEO Robert Lane Speaks with Erin Burnett on "Street Signs" Today at 2 PM ET (Transcript Included)

street_signs_200x107.jpg

WHEN: FRIDAY, SEPTEMBER 7 AT 2:00 PM ET
WHERE: CNBC'S "STREET SIGNS"

The following is the unofficial transcript of a CNBC interview with John Deere Chairman and CEO Robert Lane on CNBC's "Street Signs" today at 2:00 PM ET. All references must be sourced to CNBC.

In the interview with CNBC's Erin Burnett, Lane discusses the strength of the economy in light of today's shocking jobs report, the housing market, the farm sector, global business, and business abroad particularly in China, among other topics.

ERIN: THANKS, AND THE U.S. STOCK MARKET SEEMS TO BE IN TURMOIL, BUT THINGS ARE LOOKING PRETTY DARN GOOD ON THE FARM. LOOK AT DEERE UP MORE THAN 40% SO FAR THIS YEAR AND OUR SPECIAL GUEST ON "STREET SIGNS", CEO AND CHAIRMAN ROBERT LANE. BOB IS WITH US THE ENTIRE HOUR AND COULDN'T BE A MORE FUN HOUR LOOKING AT THE MACHINERY THAT WE HAVE WITH US. BOB, THANKS SO MUCH FOR COMING OUT AND SPENDING SOME TIME WITH US.

BOB: THANKS, ERIN FOR THE INVITATION, GREAT TO BE HERE WITH THE GREAT PRODUCTS.

ERIN: LET'S TALK ABOUT THE ECONOMY, FIRST AND FOREMOST, EVERYONE THOUGHT WE WERE GOING TO HAVE JOBS ADD THIS HAD MORNING AND PEOPLE WERE DEBATING THE STRENGTH OR WEAKNESS OF THE ECONOMY AND THE NUMBER TRULY SHOCKED EVERYBODY. FIRST JOB LOSS IN FOUR YEARS, WHAT'S YOUR VIEW AT JOHN DEERE, ARE WE GOING TO HAVE RECESSION OR IS THIS NUMBER AN ANOMALY.

ROBERT LANE: WHETHER WE'RE GOING TO HAVE A RECESSION OR NOT IS KIND OF ABOVE MY PAY GRADE, BUT I KNOW THERE ARE ASPECTS OF THE ECONOMY THAT ARE UNDER PRESSURE, BUT PERHAPS I COULD BE MOST HELPFUL IN INDICATING CERTAINLY NOT EVERYWHERE. EVEN IN OUR CONSTRUCTION EQUIPMENT DIVISION, NONRESIDENTIAL HOUSING, WE'RE EXPECTING TO BE UP THIS YEAR STILL. THE ECONOMY IN THE U.S. AND THE AG SECTOR IS VERY STRONG, BRAZIL A STRONG, EUROPE IS STRONG, WE EXPECT INCREMENTS IN ALL THESE AREAS.

ERIN: INTERESTING, JOHN CHAMBERS FROM CISCO SAID EARLIER THIS WEEK, THE STRONGEST GLOBAL ECONOMY HE'S SEEN IN HIS LIFETIME, SAYING THE PAST COUPLE MONTHS AND EVERY TIME I SEE HIM I CHECK OUT AND SEE IF IT'S STILL TRUE. DO YOU THINK THAT'S TRUTH FROM WHERE YOU SIT?

LANE: NO QUESTION ABOUT IT, ALL-AROUND, ALL THE CONTINENTS OF THE WORLD, INCLUDING AFRICA WHERE I JUST TRAVELED THROUGH RECENTLY, IT'S GREAT TO SEE, IN ASIA, EUROPE, SOUTH AMERICA, BRAZIL AND ARING TINA AND IN OUR CASE, VERY STRONG, SUGAR CANE, VERY STRONG, IT'S EXCITING TO SEE IT.

ERIN: SO THE STRONGEST GLOBAL ECONOMY, BUT WHAT ABOUT IN THE U.S.? IT'S INTERESTING, TO DEAL WITH AGRICULTURAL EQUIPMENT AND YOU TALKED ABOUT THE COMMERCIAL SIDE OF THE BUSINESS IN TERMS OF CONSTRUCTION, BUT YOU ALSO HAVE, YOU KNOW, THE JOHN DEERE THAT IS A LOT OF VIEWERS RIGHT NOW, THE GARDEN MOWERS AND LAWN CARE. ARE YOU SEEING A WEAKNESS, A HICCUP IN CONSUMER SPENDING?

LANE: YES, THE MARKETS, THE OVERALL INDUSTRY FOR THAT SMALLER PRODUCT, PEOPLE LIKE TO HAVE LITTLE BMW'S ON THEIR LAWN, GREAT GREEN TRACTORS TO TAKE CARE OF THEIR LAWN OR COMMERCIAL USERS. OUR BUSINESS THOUGH IS LOOKING QUITE STRONG IN THIS BEAT BECAUSE WE HAVE A WHOLE NEW ARRAY OF NEW PRODUCTS, BUT OVERALL, IT IS DOWN.

ERIN: ALL RIGHT. SO, IT'S OVERALL DOWN, AND, BUT THEN YOU SAID, BUT I'VE GOT NEW PRODUCTS, BUT YOU'RE SEEING MORE WEAKNESS THIS TIME OF YEAR THAN YOU WOULD ORDINARILY SEE ON CONSUMER SIDE, RIGHT?

LANE: THAT'S TRUE IN THE INDUSTRY,NOT OURSELVES, ACTUALLY WE'RE UP, BUT IT'S A RESPONSE TO A NEW INNOVATIVE PRODUCT WE'RE BRINGING TO THE MARKET.

ERIN: OKAY, SO GIVEN THAT AND YOU ALSO HAVE THIS CREDIT ARM AND YOU WERE TALKING ABOUT HOW IMPORTANT THAT IS TO JOHN DEERE.

LANE: YES, YES.

ERIN: AND WE'VE OBVIOUSLY SEEN A REMARKABLE CHANGE IN THE CREDIT MARKET.

LANE: YES.

ERIN: HOW HAS THAT AFFECTED YOU?

LANE: JOHN DEERE CREDIT IS IN GREAT SHAPE, VERY STRONG. UR PORTFOLIO REMAINS VERY, VERY PRISTINE. IT'S EXCELLENT WORLDWIDE. ON THE OTHER HAND, SOME OF OUR CUSTOMERS ARE NO DOUBT UNDER A LITTLE BIT MORE STRESS, AFFECTED BY HOUSING, BUT THE OVERALL IMPACT ON OUR BUSINESS IS NONEXISTENT. IT'S A VERY STRONG CONTRIBUTOR TO JOHN DEERE'S EARNINGS AND PROSPECTS LOOK VERY GOOD.

ERIN: AND I KNOW AT JOHN DEERE BECAUSE YOU HAVE THE BUSINESS YOU HAVE INTERNAL FORECAST BECAUSE OF THE HOUSING MARKET AND HOW THINGS ARE GOING. HOW BAD IS THE THE HOUSING MARKET? I MEAN, ARE WE LOOKING AT A RECOVERY IN '08-'09 OR AT THIS POINT WE HAVE NO CLUE HOW BAD IT WILL BE?

LANE: I DON'T THINK WE KNOW EXACTLY WHAT THE FALLOUT OF THESE-- THIS POOR LIQUIDITY IS RIGHT NOW. THERE'S A LOT OF UNCERTAINTY FOR SURE. IN OUR CASE, WHERE WE ARE WORKING IN THE MARKETS NONRESIDENTIAL CONSTRUCTION, THAT IS STAYING STRONG, HOUSING STARTS ARE CERTAINLY DOWN DRAMATICALLY FROM ABOUT 2.1 PROBABLY DOWN TO 1.4, WHICH IS CERTAINLY A FALLOFF, BUT EVEN IN THAT ENVIRONMENT, OUR CONSTRUCTION EQUIPMENT DIVISION IS GOING TO HAVE REALLY EXCELLENT PERFORMANCE UNDER THOSE CONDITIONS, SO IT'S-- IT NEEDS TO BE PUT IN THAT PERSPECTIVE, I WOULD BE REMISS IF I DIDN'T GIVE THAT VERY POSITIVE NEWS.

ERIN: RIGHT. AND HOW DO YOU THINK OF THE TWO THINGS. I MEAN, THE U.S. AGRICULTURAL SECTOR IS SO CRUCIAL TO THIS COUNTRY AND A LOT OF PEOPLE MAY NOT REALIZE IT BECAUSE SO MANY PEOPLE LIVE IN CITIES AND SUB DEVELOPMENTS, BUT IF WE WERE TO HAVE A RECESSION LED BY HOUSING WHAT WOULD THE IMPACT OF THAT BE OR AT LEAST YOUR INTERNAL FORECAST OF WHAT THE IMPACT WOULD BE ON THE AGRICULTURAL SECTOR ON PEOPLE WHO FARM AND DEAL WITH ETHANOL JUST AS AN EXAMPLE FOR A LIVING?

LANE: SURE, WELL, AN IMPORTANT POINT IS THE POINT MADE EARLIER ABOUT THE GLOBAL ECONOMY. WE'RE BRINGING 2 BILLION PEOPLE INTO THE WORLD'S ECONOMY THAT WERE NEVER THERE BEFORE. THEY WANT TO EAT WELL JUST LIKE YOU AND ME AND WE'RE GOING TO ADD ANOTHER 2 BILLION PEOPLE IN THE NEXT 20 YEARS TO THE WORLD'S POPULATION, THERE'S A HUGE OPPORTUNITY FOR RURAL AMERICA AND ON TOP OF THAT, THEIR LEGISLATIVE MANDATES AND MAYBE 40-PLUS COUNTRIES FOR BIOENERGY, ALL OF THIS IS VERY POSITIVE AND I WOULD NOT ANTICIPATE ANY DIRECT IMPACT FROM HOUSING ON THE RURAL AG ECONOMY.

ERIN: BOTTOM LINE FOR JOHN DEERE U.S. VERSUS OVERSEAS. WHAT'S BIGGER RIGHT NOW?

LANE: WELL, THEY'RE BOTH, FORTUNATELY, VERY STRONG. BRAZIL AND ARGENTINA ARE COMING BACK STRONG AND EUROPE IS EXPECTED TO BE UP.

CERTAINLY, THE U.S. IS VERY STRONG RIGHT NOW BASED ON THE NUMBERS THAT THE USDA JUST PROVIDED. OUR CUSTOMERS ARE RESPONDING TO THESE KIND OF NEW PRODUCTS WHICH WE WERE SUSPENDING, A RECORD AMOUNT OF R & D AND THEY'RE RESPONDING.

ERIN: ALL RIGHT. WE'RE GOING TO BE ABLE TO TALK A LOT MORE ABOUT THESE AND TALKING TOO, WITH BOB AS WE GO THROUGH THE SHOW ABOUT ALTERNATIVE ENERGY, ABOUT ETHANOL, HOW ALL THAT HAVE IS PLAYING AND OF COURSE, WHAT WE'VE BEEN SEEING IN THE COMMODITY PRICES WHICH IS RECORD PRICES FOR THINGS LIKE GRAIN AND RECORD PRICES FOR THINGS LIKE GRAINS, ACTUALLY, ARE AFFECTING THE PRICE THAT AMERICANS PAY FOR FOOD. AND FOOD IS TWICE AS IMPORTANT TO AMERICANS AS ENERGY. IN TERMS OF HOW MUCH MONEY PEOPLE SPEND. IT'S SHOCKING STATISTICS. IT'S TRUE WHY YOU'LL WANT TO SEE THE NEXT EXCLUSIVE INTERVIEW WITH GENERAL MILLS CEO STEVE SANGER, AFTER THESE MESSAGES. WE WILL BE RIGHT BACK.



About CNBC:
CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.