CEO Ron DeFeo said Terex, a portfolio of niche construction equipment businesses, will achieve $8 billion in net sales by 2013 with a 12% operating margin. "It's been a roller coaster ride, and it will be a steep climb," he adds, "but we have been there before and we can get there again.

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Terex will be in "recovery mode" in most markets in 2011, DeFeo says, with its crane business lagging, but he expects "nice growth." Part of the growth equation has been expansion in international markets. Developing markets now account for 35% of Terex's total revenue, up from 15% in 2005.

Lead times are already becoming a concern in some places, he said. "We are a bunch of scramblers here, and we are aggessively trying to find solutions. This is the problem with cyclical businesses." Tim Ford, Terex's ariel work platform leader, gave the example that last September, his team doubled production and then doubled it again and then increased further beyond that in an effort to build some inventory in anticipation of expected demand. "But we have not been able to get ahead of the inventory build. The product we built has been sold, which is the good news, but the bad news is that the lead times are spreading. I had two meetings with suppliers this morning. One was to beat back price increases and one was trying to get more components so that we could build more product.," Ford said.

DeFeo also commented on the company's sale of its mining business to Bucyrus International last year for $1.3 billion, where Terex "retained $300 million of that sale in equity." Subsequently, "that little firm in Peroria" is purchasing Bucyrus for $8-plus billion and "the stock that we had valued at $51 now is valued at $92 so our net effect from that mining sales was $1.5 billion." DeFeo calls it, "a positive event for us, and a positive event for Caterpillar and Bucyrus. While we are sad to see that business go, we are proud of what we did to position it from very weak franchises that we acquired to a world class business that is now partnered with Bucyrus and Caterpillar." 

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CEO Ron DeFeo and the Terex leadership team talked to the press at CONEXPO March 23 in Las Vegas.

DeFeo said none of the factories that Terex sources materials from in Japan were badly damaged in the earthquake or tsunami, but he adds that impacts on the supply of certain engines, hydraulic components and tires made there could be "meaningful at different times." Some manufacturers who have factories in the hard-hit area could be more directly impacted, he added, but he also noted the "resilience of the Japanese people."

In DeFeo's opinion, Congress will pass a long-term surface transportation bill this year. The "embarassment factor" will bring the parties together, he believes. The bill is not likely to have an incremental revenue increase, however, he said, because no one will support increasing the gas tax. "You will see the administration and Congress seek alternative taxes, but now that the Republicans control the House, I doubt if that will happen. They will explore taxes on oil, on drilling, on Wall Street—but none of those will happen. So net net, we get a highway bill with the same levels as before and the burden will go back to the states to prioritize their investments."