Terex CEO wary of rehiring despite rebound

CHICAGO (Reuters) - The top executive of Terex Corp (TEX.N), a U.S.-based maker of construction, quarrying and shipping machinery that laid off 35 percent of its global workforce in the recent downturn, said on Tuesday that while his company is seeing encouraging signs of a rebound in demand for heavy machinery "we're trying not to hire anyone back."

Speaking at the Reuters Manufacturing and Transportation Summit in Chicago, Ron DeFeo, the company's chairman and chief executive, said that while Terex is "hiring a few people selectively ... it is important, in our view, to manage this process carefully."

Terex, which went into the downturn with 24,000 employees, currently has about 16,000 people on its payrolls. "I have nothing against adding workers," he said. "I just want to make sure we don't add them in anticipation, we add them as a result of real pressure to increase production."

Its reluctance to rehire many of the workers is hardly unique in the industrial sector and represents one of the many challenges the United States faces as it seeks to put millions of unemployed workers back to work.

Manufacturing generates less than 12 percent of U.S. economic output and accounts for less than 9 percent of the jobs in the country. Yet it accounted for more than 26 percent of the 8.4 million layoffs in the downturn, according to the U.S. Department of Labor.

But as manufacturers like Terex see their order books growing again for the first time in nearly two years, the last thing they seem interested in doing is rehiring those workers.

"It can also be very tempting to add back a significant amount of workforce thinking that the current improvement in production is going to last forever," DeFeo said, "and it may not."

DeFeo said that while he was confident the current recovery was sustainable, "to think that things will automatically be great again is a misunderstanding of the kind of business we are in and the complexity of the businesses we're in."

He said that after Terex's business was down for several years, 2011 and 2012 "will be very strong years, relative to 2008 and 2009. That I am pretty confident of."

DeFeo said his biggest concern as he surveys the next 36 to 48 months was spiraling debt levels in the United States and other developed countries. "If we don't deal with the debt and think we can push this off to future generations, we will step on the throat of future expansion. It is a real limiter," he said.

DeFeo, an outspoken critic of the U.S. government's relatively small investment in infrastructure during the downturn, expressed continued frustration with the unwillingness of U.S. lawmakers to get behind a full, multiyear reauthorization of the expired highway bill.

"It's being delayed, it's being politicized, our roads and bridges are crumbling," he said. "Manufacturing is not supported in this country like it is in China, in Japan, in other places -- even in Europe.

"I really want to see America focus on building things, and doing those things where value is added and created by the ingenuity of the people ... as opposed to be focused on how can we move capital around."

(Reporting by James B. Kelleher, editing by Matthew Lewis)