17.09.2009

Terex will decide soon on construction division

Terex chief executive Ronald DeFeo, speaking at a JPMorgan diversified industries conference in New York yesterday said that he intends to decide by early 2010 which lines from the company's construction equipment division will be sold off and which will be retained.

DeFeo said that the current focus is on lowering costs and fixing to determine whether some of the struggling product lines could be retained. But he acknowledged the company's presence in some markets may never be large enough to consistently generate adequate profits.

"We've never really demonstrated the ability to be meaningfully profitable in this business. I'm going to look at it by product type and make some decisions by early 2010."

The Construction equipment division has typically represented around 25 percent of Terex's total revenues but not been a significant contributor to profitability. DeFeo added that its construction business is "probably not that attractive to anybody unless it's connected to a company with large market presence elsewhere that is looking to expand into Europe.”

Defeo initially raised the prospect of exiting the general construction/earthmoving business back in February when he said: “My job over the next nine months is to fix, merge or sell”. Click here to see original report

Defeo also said that Fantuzzi, the recently acquired port equipment business will be renamed Terex Port Equipment.