Caterpillar Chairman and CEO Douglas R. Oberhelman says he is “very guardedly optimistic” about 2014 in the U.S. and abroad.
“But compared to last year, maybe slightly less guarded,” Oberhelman told the media during the CONEXPO-CON/AGG exhibition, held earlier this month in Las Vegas. After what Cat saw in 2013, he added, “we are keeping all eyes on every cost and every growth piece."
Oberhelman offered the following thoughts on Caterpillar's global markets and future strategy.
• U.S. and North America: The market is showing the best growth signs that Cat has seen in March in four years, Oberhelman said. The upbeat housing market and the early resolution to the debt-ceiling debate contributed to the positive energy.
• Europe: This region is doing better “but coming from a very deep hole,” said Oberhelman. Northern Europe is faring better than southern Europe, and Eastern Europe has had few hiccups. Most of the bad news in Europe is over, he said. He added that he wouldn’t expect a great boom coming out of Europe this year, but he doesn’t see any major road bumps, either.
• Middle East: Oberhelman said the region is doing well. Oil prices have held up, which benefits business across the region.
• Africa: This region also is doing well, Oberhelman said. Africa is showing signs of faster growth than other developing economies. Africa could be, for a while, one of the fastest growth areas as it builds infrastructure, Oberhelman predicted. It’s a relatively small piece of Caterpillar's business, but Oberhelman said the news is mostly good there.
•China: The region is recovering after a fairly rigid downturn in the past couple of years; however, Oberhelman said he would not expect a return to the boom years. Beijing is dealing with economic challenges, but there is not a big cliff there to worry about, he added.
•Australia: The region is suffering anemic growth due to a soft mining business, Oberhelman noted. The government is talking about new policy that could result in positive growth.
•Indonesia: An anemic mining economy also is holding down this region.
•South America: According to Oberhelman, this region is holding up well. Cat has a “tremendous business” in Brazil, he said. The South American mining and resource industries have fared better than elsewhere in the world, Oberhelman noted.
“Overall, it’s a fairly mixed bag, with North America leading the way with a slightly stronger growth prospect than we have seen,” Oberhelman said. He added that he is hearing the same from Cat customers everywhere in the world. “U.S. customers are more optimistic than they have been for a while,” he said.
At CONEXPO, Oberhelman also talked about the engineering resources that will be freed up now that the equipment sector has completed the 15-year, multibillion-dollar journey to Tier 4 from Tier 1 federal emissions compliance in the U.S.
“But today, we have a smoke-less, smell-less diesel engine that’s as efficient as it has ever been. I’m excited about the future. There are really fun things that we want to do," he said.
Steve Wunning, Cat group president, elaborated on the technology strategy, saying, “We’ve identified some long-lead-time [five to seven years out] technology themes that we want to develop—the areas where we are going to place our bets.” He added, “These are things like power density, autonomous vehicles, prognostics, diagnostics, LNG fuels and alternative fuels. The investments that we make today will mean how competitive we will be tomorrow.”