CAT Caterpillar Inc

By Andrew Tangel and Bob Tita 

Caterpillar Inc., the world's largest maker of heavy machinery, is optimistic President-elect Donald Trump will increase spending on U.S. infrastructure and reduce corporate tax and regulatory burdens.

"We've got a lot to do at home on building our own infrastructure in this country, and we are excited about some of the things that he has said in this regard," said Kathryn Dickey Karol, Caterpillar's vice president for global government and corporate affairs.

Stocks for major U.S. manufacturers were mixed in morning trading on Wall Street as investors weighed the prospect of Mr. Trump's presidency following Tuesday's election. Caterpillar was up more than 8% to $91.87 at the market open as investors gauged potential for elevated U.S. spending on infrastructure construction in a Trump administration.

But other companies in the sector were lower in trading on uncertainty regarding Trump's pledge to renegotiate trade deals and campaign promises to discourage companies from moving plants overseas. Auto makers Ford Motor Co. and General Motors are trading lower along with General Electric, United Technologies.

Ms. Karol said Peoria, Ill.-based Caterpillar would continue to push for adoption of the Trans-Pacific Partnership during the remaining days of the Obama administration. While Mr. Trump was critical of that trade deal and others, Ms. Karol said the company would continue advocating for lowering trade barriers to expand its sales overseas.

"Caterpillar has always positioned ourselves to support strong trade deals to bring back American competitiveness, level that playing field and provide for growth," she said.

Reaction to the election from industrial companies is likely to be generally muted Wednesday as executives digest the ramifications of the election. Many companies are likely to welcome Trump's promises to lower taxes and reduce business regulations as well as a continuation of business friendly Republican majorities in Congress.

But Trump's nationalistic rhetoric during the campaign will likely unnerve foreign customers of U.S. companies and could undermine overseas growth strategies.

Ms. Karol declined to speculate whether Mr. Trump's trade policies would spark an international backlash and affect Caterpillar's business over the next four years. The company has a sprawling network of overseas facilities in countries including China and Mexico.

"Worried, not worried -- I think we see opportunity to advocate on the benefits of trade with this new administration and Congress," she said. "We're going to be very vocal about that."

Ron DeFeo, chief executive of Pennsylvania-based Kennametal Inc., which makes drilling and cutting heads for oil wells and metal-forming machinery, predicted that U.S. businesses will warm up to Mr. Trump if he is able to generate stronger U.S. economic growth in the coming years.

"I don't think you can begin to address the global problems when your domestic economy is stuck in neutral," he said.

He predicted that Mr. Trump with show a more measured approach to trade policy as president than he showed during the campaign as a candidate.

"A little stiffer hand goes a long way to true-up the [trade] deals that exist, but overreach will scare people," he said.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Bob Tita at robert.tita@wsj.com

(END) Dow Jones Newswires

November 09, 2016 11:07 ET (16:07 GMT)

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