Manufacturers Mixed on Prospect of a Donald Trump Presidency -- Update
09 November 2016 - 8:37PM
Dow Jones News
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're looking forward to building those bridges -- we're good
at it and we have the right equipment for it," said Kathryn Dickey
Karol, Caterpillar's vice president for global government and
corporate affairs. She said the company was excited about Mr.
Trump's calls for improving the country's transportation
network.
Caterpillar was up more than 7% at $90.70 at the market open and
stocks for major U.S. manufacturers were broadly up across the
board in recent trading as investors weigh the prospect of Mr.
Trump's presidency following Tuesday'selection.
Trading in other companies in the sector were mixed 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 and automotive
component makers were down in recent trading, while General
Electric and United Technologies were higher.
Ms. Karol said Peoria, Ill.-based Caterpillar, which has a
sprawling network of overseas facilities in countries including
China and Mexico, 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.
"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."
Martin Richenhagen, chairman and chief executive of farm
equipment manufacturer Agco Corp., said he is concerned about Mr.
Trump's repeated support for trade protectionism during the
campaign. Georgia-based Agco generates the majority of its sales in
Europe and South America. The company imports farm tractors and
components into the U.S.
"That would be a nightmare if we make life difficult for imports
and exports," said Mr. Richenhagen, who is in Germany this week.
"We need to explain that to him. The Europeans are very
concerned."
Some smaller company leaders said they supported Trump because
of the then-candidate's calls to throw out trade deals that he said
decimated the sector's employment and his support for U.S.
manufacturing.
"People really felt like this is a guy that gives them a voice,"
said Dan Larson, owner of Hydrosolutions of Duluth Inc., a
Minnesota company with 15 employees fabricating metal for the
aviation industry.
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.
Agco's Richenhagen predicted that Republican majorities in the
U.S. House and Senate will be receptive to Mr. Trump's domestic
strategy to revive business investment and economic growth with
lower taxes and less regulation. "Tax reform is easily done now,"
he said.
Ron DeFeo, chief executive of Pennsylvania-based Kennametal
Inc., which makes drilling tools for oil wells and metal-cutting
machines, 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 will 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.
Marvin Cunningham, president of the Long-Stanton Manufacturing
Co. in the Cincinnati area, has about 35 employees and makes
components that wind up in products such as airplane brakes and gas
station pumps, many of which are exported. He fears possible
tariffs in response to Mr. Trump's potential trade policies. "We'll
have a smaller market now," Mr. Cunningham said. "I don't see how
that is good for us."
But referring to Mr. Trump's criticism of companies that move
jobs overseas, he noted that his small company had already shifted
production from China back to the U.S. "Dodged a grenade," Mr.
Cunningham 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 14:22 ET (19:22 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Caterpillar (NYSE:CAT)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Caterpillar (NYSE:CAT)
Historical Stock Chart
Von Jul 2023 bis Jul 2024