CHICAGO (Reuters) - The top executive at Caterpillar Inc (CAT.N: Quote, Profile, Research, Stock Buzz), which has acknowledged facing an important decision regarding its on-highway truck engines, said on Tuesday the company has no plans to exit the business.
"We've been giving it a lot of strategic thought," Jim Owens, Caterpillar's chairman and chief executive officer, told the Reuters Manufacturing Summit in Chicago.
"My expectation certainly at the moment is that we will stay in the on-highway truck engine segment. We are working on exactly how we are going to do that."
Asked if a partnership with truck-maker Navistar International Corp NAVZ.PK might be a good fit for Caterpillar's engine unit, Owens said: "A potentially nice fit? Sure." But he quickly added: "Obviously I can't comment. If we had something to announce, we'd announce it."
The North American truck-making industry, which traditionally sourced its engines from independent suppliers like Caterpillar and Cummins Inc (CMI.N: Quote, Profile, Research, Stock Buzz), is rapidly changing as more manufacturers move engine-making in-house. That's thrown a big question mark over Caterpillar's diesel engine business and raised speculation the Peoria, Illinois-based company, best known for its earth-moving equipment, might exit the business altogether.
Owens also said he remains comfortable Caterpillar will meet its $8 to $10 earnings per share target for 2010 and that there was a "high probability" the company would exceed its 2010 revenue and sales target of $50 billion.
He said the company would increase capital spending in 2008 by about 35 percent over 2007's level and that "we'll have to spend at about that level over the next two years."
(For summit blog: summitnotebook.reuters.com/)
(Reporting by James B. Kelleher, editing by Phil Berlowitz)
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