Caterpillar CEO sees better economy ahead

Peoria-based Caterpillar Inc. expects the U.S. economy to experience a "soft landing" in 2008 but likely to regain a growth footing next year, the U.S. manufacturer's top executive said Thursday.

"The combination of what the Fed has done -- a little late maybe, but very aggressively addressing the softening economy -- and what the federal government has just done with the stimulus package kind of assures that we're going to have a soft landing," said Jim Owens, chairman and chief executive of the world's largest maker of construction and mining equipment.

"Whether it's a mild recession or just a significant slowdown is not so important to me," he said. "But the re-acceleration of growth later in the year going into '09, '10, I think, is a likely occurrence now."

Growth abroad will keep Caterpillar on a track to grow profits, Owens said while attending a meeting of the Business Council in Fort Lauderdale, Fla.

"We had a $3.5 billion drop in our North American sales last year and despite that we still had record numbers because of the strength, particularly, in the emerging markets of the world," he said. "So I think that's an important play for U.S. business and it helps the U.S. economy as well."

Owens said Caterpillar planned to invest about $2 billion over the next five years to boost its manufacturing in key markets such as India, China, Russia and parts of South America and the Middle East.

Owens said he worries Americans do not appreciate the value of export trade, noting overall 62 percent of the company's revenue last year was generated outside the U.S.

"There's an understandable apprehension because people don't understand it, but the fact is a lot of American jobs are tied to trade," he said"