Terex Focused On Fixing Construction Equipment Unit-CEO
By Bob Tita, Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- Terex Corp. (TEX) is focused on restoring profits from
its construction equipment unit after the business attracted little interest
from potential buyers, Chairman and Chief Executive Ron DeFeo said Thursday.
DeFeo said the construction unit includes some of the company's weakest
product lines. The unit's third-quarter sales plunged 56% from a year earlier
and the operating loss reached $59 million.
"That's my biggest drain," DeFeo said during a presentation at a Citi
Investment Research conference broadcast on the Internet. "It's going to be
difficult in 2010 to get the construction business to break even."
DeFeo has been actively shopping parts of the unit in recent months in a bid
to upgrade the performance of the entire company, which also makes tower cranes,
mining equipment and aerial work platforms. But he added he found little
interest in buying from the rest of the equipment industry.
"There are no real strategic alternatives at this moment," he said. "Frankly,
our first priority is to fix it ourselves."
DeFeo said he's trying to lower costs through employee cuts. The unit's most
problematic product line is hydraulic excavators, he said, which are made in
Germany and primarily sell in the European market where demand for construction
machinery has fallen sharply in the past year as commodity prices dropped and
the construction industry cooled.
DeFeo said he's confident some parts of the of construction unit, which
included compact construction machinery, will start to recover next year but
predicted the improvement will be slow.
Terex stock recently traded 0.5% lower at $21.59 a share.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com
(END) Dow Jones Newswires
11-12-091553ET
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