Q: Any time the government spends a lot of money on anything, including Medicare, corruption and fraud are close behind. There are billions of dollars missing in Iraq. Won't a lot of dishonest people get rich?
A: I'm with you. That's why I would put it in the hands of public/private partnerships with boards of directors, approved projects, rates of returns that are audited. There is always fraud, but I think there is a way of managing it. I accept waiting at LaGuardia Airport 45 minutes on the runway. Everybody accepts it, but there is a huge cost. We tend to accept delays and congestion, but we can control congestion.
Q: What kinds of jobs are created by infrastructure spending? Will they be largely blue collar?
A: It's not just the construction worker digging a hole. That is the tip of the sword. It begins with ideas, and jobs are created in banking, in architecture, at all the suppliers. The conventional wisdom is that for every $1 billion in infrastructure spending, 28,000 jobs are created. More than that, infrastructure unlocks the opportunity to access markets. A new road goes in, and a lot of services crop up. It's axiomatic. When you invest in infrastructure, people and jobs follow.
Q: Remember the Big Dig in Boston, the poster child of infrastructure projects? How do we keep from starting projects that balloon in cost? How do we prevent bridges to nowhere?
A: That's the fear of the American people, that we will do projects for the pride and legacy and not for the economic success. A bridge to nowhere is a bad bridge, and they're all over the place. We must look at the projects and ask, what is the economic return and what is the environmental impact? We've got to be disciplined. Sometimes, you can never imagine the possibilities of something until you begin to unlock them. That spirit is lost in this country. It's not there. I don't want people to think: "We've got infrastructure done. Let's cross it off our list."
Q: With all this infrastructure spending coming down the pike, why has the stock of Terex fallen?
A: Infrastructure spending is good news long-term. But the stimulus bill has been built in for a long time, and the current economic conditions are outweighing it. Globally, we've cut 5,000 of 21,000 jobs. Some more cuts are coming.
Q: What should other companies unrelated to infrastructure projects be doing to position themselves in the next six to 12 months?
A: Manage your business for cash. The predictability of future earnings is hard; survivability is the key. Eliminate waste. Waste comes disguised as productive work.